WILMINGTON, Del., Oct. 29, 2020 /PRNewswire/ -- DuPont (NYSE:
DD) today announced financial results for the third quarter
2020.
"Our team remains committed to emphasizing the safety and
well-being of our employees, prioritizing the needs of our
customers, and executing on a playbook that enables us to quickly
respond to the changing environment" said Ed Breen, DuPont Executive Chairman and Chief
Executive Officer. "This commitment is evident in the results we
announced today. We delivered strong performance demonstrating the
value our market-leading innovation and technology provides in key
end-markets such as semiconductors, smartphones, water filtration,
probiotics, and personal protective equipment. The actions we have
taken to right-size our cost structure and generate significant
cash flow are delivering results today and we intend to maintain
this momentum as we move forward."
"In September, we completed the sale of our trichlorosilane
business and our stake in the Hemlock Semiconductor joint venture
and earlier this month we signed an agreement to sell the
Biomaterials business," Breen continued. "Execution of these
Non-Core divestitures and the continued progress towards the
anticipated closing of the Nutrition & Biosciences
transaction(1) in the first quarter 2021 exemplify our
commitment to create both market-leading businesses and value for
our shareholders."
Third Quarter 2020 Results
Net sales totaled $5.1 billion,
down 6 percent versus the year-ago period on both an as reported
and organic basis. Growth in Electronics & Imaging was more
than offset by sales declines in the other segments primarily due
to the impact of the global pandemic.
On a regional basis, organic sales increased 3 percent in
Asia Pacific versus the year-ago
period while the U.S. and Canada
declined 10 percent, EMEA declined 15 percent, and Latin America declined 3 percent.
China sales in our core segments
improved 14 percent versus the third quarter 2019 and
10 percent sequentially from second quarter
2020.
GAAP EPS from continuing operations totaled $(0.11) on a GAAP loss from continuing operations
of $(72) million, versus GAAP EPS
from continuing operations of $0.49
on GAAP income from continuing operations of $372 million in the year-ago period. This decline
is mostly attributable to non-cash impairment charges associated
with Non-Core businesses, higher merger-related amortization
expense and lower segment results, partially offset by gains
associated with divestitures of Non-Core businesses.
Operating EBITDA(2) was $1.3
billion, down 7 percent versus operating
EBITDA(2) in the prior year. The impact of lower demand,
cost associated with idled facilities, and portfolio changes more
than offset manufacturing productivity gains, approximately
$150 million of non-manufacturing
cost savings and strong demand in semiconductors, smartphones,
water, Tyvek® protective garments, and health & wellness.
Adjusted EPS(2) decreased 8 percent to $0.88, compared with adjusted EPS(2)
in the year-ago period of $0.96,
primarily driven by lower segment results and a higher base tax
rate partially offset by declines in interest expense, foreign
exchange losses, and share count. A continued focus on cost control
enabled operating EBITDA declines in-line with the decline in net
sales on a percentage basis.
Operating cash flow of $1.3
billion included improvements in working capital of more
than $300 million in the quarter
which was driven by lower inventories. Capital expenditures of
approximately $200 million resulted
in free cash flow(2) of $1.1
billion. The sale of the trichlorosilane business and the
Hemlock Semiconductor joint venture provided $550 million of additional pre-tax cash proceeds
in the quarter. Proceeds from these sales as well as organic
cashflow generation enabled a reduction in commercial paper
balances to less than $400 million as
of September 30, 2020; a reduction of
$1.2 billion in the quarter.
(1)
|
Closing of
transaction with IFF is subject to regulatory approval and
customary closing conditions.
|
(2)
|
Adjusted EPS,
operating EBITDA and free cash flow are non-GAAP measures. See page
7 for further discussion. Reconciliation to the most directly
comparable GAAP measure, including details of significant items
begins on page 13 of this communication.
|
Third Quarter 2020 Segment Highlights
Electronics & Imaging
Electronics & Imaging
reported a record quarter with net sales of $1.0 billion, up 7 percent from the year-ago
period. Organic sales were up 8 percent driven by a 9 percent
growth in volume offset by a 1 percent decline in price. Currency
was neutral and portfolio was a 1 percent headwind.
Sales gains were led by Semiconductor Technologies as new
technology ramps across logic and foundry delivered high-single
digit organic growth versus the year-ago period. Interconnect
Solutions organic sales also increased high-single digits, despite
an overall decline in the global smartphone market, driven by
higher material content in premium, next-generation smartphones.
Within Image Solutions, mid single-digit organic growth was led by
strength in OLEDs for displays and ink for the consumer segment,
partially offset by weakness in flexographic plates and textile
inks.
Operating EBITDA for the segment was $357
million, an increase of 12 percent from operating EBITDA of
$320 million in the year-ago period,
driven primarily by strong volume growth and continued productivity
actions.
Nutrition & Biosciences
Nutrition &
Biosciences reported net sales of $1.5
billion, down 4 percent from the year-ago period on both an
as reported and organic basis driven by lower volumes. Price,
currency and portfolio impacts were each neutral versus third
quarter 2019.
Within Health & Biosciences, double-digit growth in both
probiotics and home and personal care markets was more than offset
by continued weakness in biorefinery and microbial control. Pricing
gains in Food & Beverage were more than offset by weaker demand
primarily in emulsifiers, sweeteners, and cellulosics driven by
declines in food service and lower consumer demand for mints and
chewing gums in travel and convenience stores. Pharma Solutions
sales were flat with the prior year.
Operating EBITDA for the segment was $379
million, an increase of 7 percent from operating EBITDA of
$354 million in the year-ago period.
Continued productivity actions and favorable product mix more than
offset the impact of lower volumes leading to a 260 basis point
improvement in operating EBITDA margins versus the year-ago
period.
Transportation & Industrial
Transportation &
Industrial reported net sales of $1.0
billion, down 14 percent from the year-ago period. Organic
sales were down 14 percent with volume down 9 percent and price
lower by 5 percent. Currency and portfolio impacts were both
neutral versus third quarter 2019.
Volume declined 9 percent due to lower auto builds. Although a
significant improvement versus second quarter performance the
global auto market continues its recovery from steep declines in
the first half of the year. The impact of COVID-19 on other key
industrial markets, in addition to automotive, contributed to
volume declines across Mobility Solutions, Industrial &
Consumer, and Healthcare & Specialty. Strong demand for
differentiated, high performance seals in semiconductor
manufacturing lifted Kalrez® revenues high-teens percent.
Operating EBITDA for the segment was $242
million, a decrease of 21 percent from operating EBITDA of
$306 million in the year-ago period,
as savings from productivity actions were more than offset by
volume declines, lower price, and the impact of temporarily idled
facilities.
Safety & Construction
Safety & Construction
reported net sales of $1.2 billion,
down 6 percent from the year-ago period. Organic sales were down 9
percent with a 1 percent price improvement offset by a 10 percent
decline in volume. Acquisitions in the Water Solutions business
increased reported sales by 3 percent. Currency was neutral.
Continued broad-based demand across Water Solutions was more
than offset by declines in both Safety Solutions and Shelter
Solutions. Within Safety Solutions, demand for Tyvek® protective
garments remained strong but was more than offset by soft demand
for aramid fibers across aerospace, oil & gas and select
industrial markets as a result of COVID-19. Similarly, within
Shelter Solutions, growth in residential construction and retail
channels for do-it-yourself applications was more than offset by
weak commercial construction.
Operating EBITDA for the segment totaled $324 million, a decrease of 8 percent from
operating EBITDA of $352 million in
the year-ago period. Continued productivity actions as well as
favorable product mix was more than offset by lower volumes and the
impact of temporarily idled facilities.
Non-Core
Non-Core reported net sales of $331 million, down 23 percent from the year-ago
period. Organic sales were down 13 percent driven by 18 percent
volume declines and offset by 5 percent pricing gains. The
September 2019 divestiture of the
DuPont Sustainable Solutions business and the September 2020 divestiture of the trichlorosilane
business reduced sales by 10 percent. Currency was neutral.
Operating EBITDA for the segment was $14
million, a decrease of 85 percent from operating EBITDA of
$94 million in the year-ago period.
The absence of a prior year gain on the sale of DuPont Sustainable
Solutions, lower volumes and the impact of the trichlorosilane and
Hemlock Semiconductor divestitures in September 2020 more than offset cost
productivity.
Outlook
"With a continued focus on execution, we anticipate a fourth
quarter underscored by additional cash generation and operating
leverage across our core segments driven by additional cost
savings," said Lori Koch, Chief
Financial Officer of DuPont. "We expect to deliver full-year 2020
adjusted EPS(2) in the range of $3.17 to $3.21 on
net sales of $20.1 billion to
$20.2 billion."
Conference Call
The Company will host a live webcast
of its third quarter earnings conference call with investors to
discuss its results and business outlook today at 8:00 a.m. ET. The slide presentation that
accompanies the conference call will be posted on the DuPont's
Investor Relations Events and Presentations page. A replay of the
webcast also will be available on the DuPont's Investor Relations
Events and Presentations page following the live event.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials, ingredients and solutions
that help transform industries and everyday life. Our employees
apply diverse science and expertise to help customers advance their
best ideas and deliver essential innovations in key markets
including electronics, transportation, construction, water, health
and wellness, food and worker safety. More information about the
company, its businesses and solutions can be found at
www.dupont.com. Investors can access information included on the
Investor Relations section of the website at
www.investors.dupont.com.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
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").
On December 15, 2019, DuPont and IFF announced they had
entered definitive agreements to combine DuPont's Nutrition &
Biosciences business with IFF in a transaction that would result in
IFF issuing shares to DuPont shareholders, pending customary
closing conditions and regulatory approvals.
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. 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) the parties'
ability to meet expectations regarding the timing, completion and
accounting and tax treatments of the proposed transaction with IFF;
changes in relevant tax and other laws, (ii) failure to obtain
necessary regulatory approvals, anticipated tax treatment or any
required financing or to satisfy any of the other conditions to the
proposed transaction with IFF, (iii) the possibility that
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies that could impact the value, timing or
pursuit of the proposed transaction with IFF, (iv) risks and costs
and pursuit and/or implementation of the separation of the N&B
Business, including timing anticipated to complete the separation,
any changes to the configuration of businesses included in the
separation if implemented, (v) risks and costs related to the Dow
Distribution and the Corteva Distribution (together, the
"Distributions") including (a) with respect to achieving all
expected benefits from the Distributions; (b) 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; (c) indemnification of certain legacy
liabilities of E. I. du Pont de Nemours and Company ("Historical
EID") in connection with the Corteva Distribution; and (d)
potential liability arising from fraudulent conveyance and similar
laws in connection with the Distributions; (vi) failure to
effectively manage acquisitions, divestitures, alliances, joint
ventures and other portfolio changes, including meeting conditions
under the Letter Agreement entered in connection with the Corteva
Distribution, related to the transfer of certain levels of assets
and businesses; (vii) uncertainty as to the long-term value of
DuPont common stock; (viii) potential inability or reduced access
to the capital markets or increased cost of borrowings, including
as a result of a credit rating downgrade (ix) risks and
uncertainties related to the novel coronavirus (COVID-19) and the
responses thereto (such as voluntary and in some cases, mandatory
quarantines as well as shut downs and other restrictions on travel
and commercial, social and other activities) on DuPont's
business, results of operations, access to sources of liquidity and
financial condition which depend on highly uncertain and
unpredictable future developments, including, but not limited to,
the duration and spread of the COVID-19 outbreak, its severity, the
actions to contain the virus or treat its impact, and how quickly
and to what extent normal economic and operating conditions resume.
and (x) other risks to DuPont's business, operations and results of
operations including from: failure to develop and market new
products and optimally manage product life cycles; ability, cost
and impact on business operations, including the supply chain, of
responding to changes in market acceptance, rules, regulations and
policies and failure to respond to such changes; outcome of
significant litigation, environmental matters and other commitments
and contingencies; failure to appropriately manage process safety
and product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange
rates; changes in political conditions, including tariffs, trade
disputes and retaliatory actions; impairment of goodwill or
intangible assets; the availability of and fluctuations in the cost
of energy and raw materials; business or supply disruption,
including in connection with the Distributions; ability to
effectively manage costs as the company's portfolio evolves;
security threats, such as acts of sabotage, terrorism or war,
global health concerns and pandemics, natural disasters and weather
events and patterns which could or could continue to result in a
significant operational event for DuPont, adversely impact demand
or production; ability to discover, develop and protect new
technologies and to protect and enforce DuPont's intellectual
property rights; unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or
outbreak of war or hostilities, as well as management's response to
any of the aforementioned factors. These risks are and will be more
fully discussed in DuPont's current, quarterly and annual reports
and other filings made with the U.S. Securities and Exchange
Commission, in each case, as may be amended from time to time in
future filings with the SEC. While the list of factors presented
here is considered representative, no such list should be
considered a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on DuPont's
consolidated financial condition, results of operations, credit
rating or liquidity. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. DuPont assumes no obligation to publicly provide
revisions or updates to any forward-looking statements whether as a
result of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. A detailed discussion of some of the
significant risks and uncertainties which may cause results and
events to differ materially from such forward-looking statements is
included in the section titled "Risk Factors" (Part I, Item 1A) of
DuPont's 2019 Annual Report on Form 10-K and as updated by DuPont's
subsequent periodic and current reports filed with the SEC.
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 "DWDP Merger"). Prior to the DWDP 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
DWDP Merger and as a result, Historical EID's assets and
liabilities were reflected at fair value as of the close of the
DWDP 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").
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").
Following the Corteva Distribution, DuPont holds the specialty
products business as continuing operations. The results of
operations of DuPont for the 2019 interim periods presented
reflect the historical financial results of Dow and Corteva as
discontinued operations, as applicable. The cash flows related to
Dow and Corteva have not been segregated and are included in the
interim Consolidated Statements of Cash Flows for the applicable
periods.
The unaudited pro forma Consolidated Statements of Operations
(discussed in the following section) 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.
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
Financial Statements and accompanying notes, adjusted to give
effect to certain events directly attributable to the Distributions
and Financings (as defined below). In contemplation of the
Distributions and to achieve the respective credit profiles of each
of DuPont, Dow, and Corteva, in the fourth quarter of 2018,
DowDuPont consummated a public underwritten offer of eight series
of senior unsecured notes (the "2018 Senior Notes") in the
aggregate principal amount of $12.7 billion and entered into a term loan
agreement consisting of two term loan facilities (the "Term Loan
Facilities") in the aggregate principal amount of $3.0 billion. In May
2019, the funds from the Term Loan Facilities were drawn,
along with the issuance of approximately $1.4 billion in commercial paper (the
"Funding CP Issuance" together with the 2018 Senior Notes and Term
Loan Facilities, the "Financings"). The net proceeds from the
Financings together with cash from operations were used to fund
cash contributions to Dow and Corteva, and DowDuPont's $3.0 billion share repurchase program which was
completed in the first quarter of 2019 (the "Share Repurchase
Program").
The pro forma financial statements were prepared in accordance
with Article 11 of Regulation S-X. The historical consolidated
financial information has been adjusted to give effect to pro forma
events that are (1) directly attributable to the Distributions and
the Financings (collectively the "Transactions"), (2) factually
supportable and (3) with respect to the Consolidated Statements of
Operations, expected to have a continuing impact on the results.
The unaudited pro forma Statements of Operations for the nine
months ended September 30, 2019 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 or nine months ended September 30, 2020 and for the three months ended
September 30, 2019.
Restructuring or integration activities or other costs following
the Distributions that may be incurred to achieve cost or growth
synergies of DuPont are not reflected. The pro forma financial
statements provide shareholders with summary financial information
and historical data that is on a basis consistent with how DuPont
reports current financial information.
The pro forma financial statements are presented for
informational purposes only, and do not purport to represent what
DuPont's results of operations or financial position would have
been had the Transactions occurred on the dates indicated, nor do
they purport to project the results of operations or financial
position for any future period or as of any future date.
Non-GAAP Financial Measures
This earnings release includes information that does not conform
to accounting principles generally accepted in the United States of America ("U.S. GAAP") and
are considered non-GAAP measures. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company, including allocating resources. DuPont's management
believes these non-GAAP financial measures are useful to investors
because they provide additional information related to the ongoing
performance of DuPont to offer a more meaningful comparison related
to future results of operations. These non-GAAP financial measures
supplement disclosures prepared in accordance with U.S. GAAP, and
should not be viewed as an alternative to U.S. GAAP. Furthermore,
such non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Reconciliations for these
non-GAAP measures to U.S. GAAP are provided in the Selected
Financial Information and Non-GAAP Measures starting on page 13 and
on the Investors section of the Company's website. Non-GAAP
measures included in this release are defined below. The Company
has not provided forward-looking U.S. GAAP financial measures or a
reconciliation of forward-looking non-GAAP financial measures to
the most comparable U.S. GAAP financial measures on a
forward-looking basis because the Company is unable to predict with
reasonable certainty the ultimate outcome of certain future events.
These events include, among others, the impact of portfolio
changes, including asset sales, mergers, acquisitions, and
divestitures; contingent liabilities related to litigation,
environmental and indemnifications matters; impairments and
discrete tax items. These items are uncertain, depend on various
factors, and could have a material impact on U.S. GAAP results for
the guidance period.
Pro forma adjusted earnings per common share from continuing
operations - diluted ("Pro forma adjusted EPS"), 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 DWDP Merger, after-tax impact
of non-operating pension / other post employment benefits ("OPEB")
benefits / charges and the after-tax impact of costs historically
allocated to the materials science and agriculture businesses that
did not meet the criteria to be recorded as discontinued
operations. Adjusted earnings per common share from continuing
operations - diluted ("Adjusted EPS"), 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 DWDP Merger and the after-tax impact of non-operating
pension / OPEB benefits / charges. Although amortization of
Historical EID intangibles acquired as part of the DWDP Merger is
excluded from these non-GAAP measures, management believes it is
important for investors to understand that such intangible assets
contribute to revenue generation. Amortization of intangible assets
that relate to past acquisitions will recur in future periods until
such intangible assets have been fully amortized. Any future
acquisitions may result in amortization of additional intangible
assets. Management estimates amortization expense in 2020
associated with intangibles acquired as part of the DWDP Merger to
be approximately $1.9 billion on a
pre-tax basis, or approximately $2.00
per share.
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 adjusted to
exclude significant items. Operating EBITDA, is defined as earnings
(i.e. income (loss) from continuing operations before income taxes)
before interest, depreciation, amortization, non-operating pension
/ OPEB benefits / charges, and foreign exchange gains / losses,
adjusted to exclude significant items. Operating EBITDA margin is
calculated as operating EBITDA divided by net sales.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance. Management
estimates these integration and separation costs in 2020 to be
approximately $600 million -
$650 million on a pre-tax basis, or
approximately $0.60 - $0.70 per share.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
Free cash flow is defined as cash provided by/used for operating
activities less capital expenditures. As a result, free cash flow
represents cash that is available to the Company, after investing
in its asset base, to fund obligations using the Company's primary
source of liquidity, cash provided by operating activities.
Management believes free cash flow, even though it may be defined
differently from other companies, is useful to investors, analysts
and others to evaluate the Company's cash flow and financial
performance, and it is an integral measure used in the Company's
financial planning process.
DuPont de Nemours,
Inc.
Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
2020
|
2019
|
2020
|
2019
|
Net sales
|
$
|
5,096
|
|
$
|
5,426
|
|
$
|
15,145
|
|
$
|
16,308
|
|
Cost of
sales
|
3,392
|
|
3,531
|
|
10,001
|
|
10,648
|
|
Research and
development expenses
|
199
|
|
225
|
|
644
|
|
724
|
|
Selling, general and
administrative expenses
|
524
|
|
645
|
|
1,698
|
|
2,013
|
|
Amortization of
intangibles
|
530
|
|
247
|
|
1,591
|
|
755
|
|
Restructuring and
asset related charges - net
|
384
|
|
82
|
|
807
|
|
290
|
|
Goodwill impairment
charges
|
183
|
|
—
|
|
3,214
|
|
1,175
|
|
Integration and
separation costs
|
127
|
|
191
|
|
469
|
|
1,149
|
|
Equity in earnings of
nonconsolidated affiliates
|
30
|
|
43
|
|
172
|
|
132
|
|
Sundry income
(expense) - net
|
430
|
|
79
|
|
627
|
|
144
|
|
Interest
expense
|
197
|
|
177
|
|
573
|
|
493
|
|
Income (loss) from
continuing operations before income taxes
|
20
|
|
450
|
|
(3,053)
|
|
(663)
|
|
Provision for income
taxes on continuing operations
|
92
|
|
78
|
|
100
|
|
142
|
|
(Loss) income from
continuing operations, net of tax
|
(72)
|
|
372
|
|
(3,153)
|
|
(805)
|
|
Income from
discontinued operations, net of tax
|
—
|
|
5
|
|
—
|
|
1,217
|
|
Net (loss)
income
|
(72)
|
|
377
|
|
(3,153)
|
|
412
|
|
Net income
attributable to noncontrolling interests
|
7
|
|
5
|
|
20
|
|
90
|
|
Net (loss) income
available for DuPont common stockholders
|
$
|
(79)
|
|
$
|
372
|
|
$
|
(3,173)
|
|
$
|
322
|
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
(Loss) Earnings per
common share from continuing operations - basic
|
$
|
(0.11)
|
|
$
|
0.49
|
|
$
|
(4.31)
|
|
$
|
(1.10)
|
|
Earnings per common
share from discontinued operations - basic
|
—
|
|
0.01
|
|
—
|
|
1.53
|
|
(Loss) Earnings per
common share - basic
|
$
|
(0.11)
|
|
$
|
0.50
|
|
$
|
(4.31)
|
|
$
|
0.43
|
|
(Loss) Earnings per
common share from continuing operations - diluted
|
$
|
(0.11)
|
|
$
|
0.49
|
|
$
|
(4.31)
|
|
$
|
(1.10)
|
|
Earnings per common
share from discontinued operations - diluted
|
—
|
|
0.01
|
|
—
|
|
1.53
|
|
(Loss) Earnings per
common share - diluted
|
$
|
(0.11)
|
|
$
|
0.50
|
|
$
|
(4.31)
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
|
734.4
|
|
|
745.5
|
|
|
735.8
|
|
|
748.2
|
|
Weighted-average
common shares outstanding - diluted
|
|
734.4
|
|
|
747.7
|
|
|
735.8
|
|
|
748.2
|
|
DuPont de Nemours,
Inc.
Consolidated Balance Sheets
|
|
In millions, except
share and per share amounts (Unaudited)
|
September 30,
2020
|
December 31,
2019
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
|
4,008
|
|
$
|
1,540
|
|
Accounts and notes
receivable - net
|
3,623
|
|
3,802
|
|
Inventories
|
3,902
|
|
4,319
|
|
Other current
assets
|
238
|
|
338
|
|
Assets held for
sale
|
835
|
|
—
|
|
Total current
assets
|
12,606
|
|
9,999
|
|
Investments
|
|
|
Investments in
nonconsolidated affiliates
|
951
|
|
1,204
|
|
Other
investments
|
24
|
|
24
|
|
Noncurrent
receivables
|
147
|
|
32
|
|
Total
investments
|
1,122
|
|
1,260
|
|
Property, plant and
equipment - net of accumulated depreciation (September 30, 2020 -
$5,757; December 31, 2019 - $4,969)
|
9,686
|
|
10,143
|
|
Other
Assets
|
|
|
Goodwill
|
29,690
|
|
33,151
|
|
Other intangible
assets
|
11,528
|
|
13,593
|
|
Restricted
cash
|
6,206
|
|
—
|
|
Deferred income tax
assets
|
237
|
|
189
|
|
Deferred charges and
other assets
|
1,066
|
|
1,014
|
|
Total other
assets
|
48,727
|
|
47,947
|
|
Total
Assets
|
$
|
72,141
|
|
$
|
69,349
|
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term borrowings
and finance lease obligations
|
$
|
2,394
|
|
$
|
3,830
|
|
Accounts
payable
|
2,685
|
|
2,934
|
|
Income taxes
payable
|
414
|
|
240
|
|
Accrued and other
current liabilities
|
1,364
|
|
1,342
|
|
Liabilities related to
assets held for sale
|
127
|
|
—
|
|
Total current
liabilities
|
6,984
|
|
8,346
|
|
Long-Term
Debt
|
21,802
|
|
13,617
|
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
3,011
|
|
3,467
|
|
Pension and other post
employment benefits - noncurrent
|
1,193
|
|
1,172
|
|
Other noncurrent
obligations
|
1,033
|
|
1,191
|
|
Total other noncurrent liabilities
|
5,237
|
|
5,830
|
|
Total
Liabilities
|
$
|
34,023
|
|
$
|
27,793
|
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value each;
issued 2020: 733,845,391 shares; 2019: 738,564,728
shares)
|
7
|
|
7
|
|
Additional paid-in
capital
|
50,219
|
|
50,796
|
|
(Accumulated deficit)
Retained earnings
|
(11,808)
|
|
(8,400)
|
|
Accumulated other
comprehensive loss
|
(859)
|
|
(1,416)
|
|
Total DuPont
stockholders' equity
|
37,559
|
|
40,987
|
|
Noncontrolling
interests
|
559
|
|
569
|
|
Total
equity
|
38,118
|
|
41,556
|
|
Total Liabilities and
Equity
|
$
|
72,141
|
|
$
|
69,349
|
|
DuPont de Nemours,
Inc.
Consolidated Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Nine Months
Ended
September 30,
|
2020
|
2019
|
Operating
Activities
|
|
|
Net (loss)
income
|
$
|
(3,153)
|
|
$
|
412
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
2,326
|
|
2,662
|
|
Credit for deferred
income tax and other tax related items
|
(481)
|
|
(658)
|
|
Earnings of
nonconsolidated affiliates (in excess of) less than dividends
received
|
(120)
|
|
700
|
|
Net periodic pension
benefit cost (credit)
|
30
|
|
(58)
|
|
Pension
contributions
|
(77)
|
|
(485)
|
|
Net gain on sales of
assets, businesses and investments
|
(612)
|
|
(119)
|
|
Restructuring and
asset related charges - net
|
807
|
|
564
|
|
Goodwill impairment
charges
|
3,214
|
|
1,175
|
|
Amortization of
merger-related inventory step-up
|
—
|
|
253
|
|
Other net
loss
|
127
|
|
326
|
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
133
|
|
(2,418)
|
|
Inventories
|
312
|
|
339
|
|
Accounts
payable
|
43
|
|
(805)
|
|
Other assets and
liabilities, net
|
245
|
|
(1,057)
|
|
Cash provided by
operating activities
|
2,794
|
|
831
|
|
Investing
Activities
|
|
|
Capital
expenditures
|
(922)
|
|
(2,091)
|
|
Investment in gas
field developments
|
—
|
|
(25)
|
|
Proceeds from sales of
property, businesses, and ownership interests in nonconsolidated
affiliates, net of cash divested
|
1,008
|
|
259
|
|
Acquisitions of
property and businesses, net of cash acquired
|
(73)
|
|
(9)
|
|
Purchases of
investments
|
(1)
|
|
(195)
|
|
Proceeds from sales
and maturities of investments
|
1
|
|
233
|
|
Other investing
activities, net
|
22
|
|
21
|
|
Cash provided by (used
for) investing activities
|
35
|
|
(1,807)
|
|
Financing
Activities
|
|
|
Changes in short-term
notes payable
|
(1,439)
|
|
2,876
|
|
Proceeds from issuance
of long-term debt
|
8,275
|
|
4,005
|
|
Payments on long-term
debt
|
(29)
|
|
(6,899)
|
|
Purchases of common
stock
|
(232)
|
|
(2,040)
|
|
Proceeds from issuance
of Company stock
|
34
|
|
76
|
|
Employee taxes paid
for share-based payment arrangements
|
(14)
|
|
(83)
|
|
Distributions to
noncontrolling interests
|
(48)
|
|
(18)
|
|
Dividends paid to
stockholders
|
(662)
|
|
(1,389)
|
|
Cash held by Dow and
Corteva at the respective Distributions
|
—
|
|
(7,315)
|
|
Debt extinguishment
costs
|
—
|
|
(104)
|
|
Other financing
activities, net
|
(55)
|
|
(6)
|
|
Cash provided by (used
for) financing activities
|
5,830
|
|
(10,897)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
4
|
|
(2)
|
|
Increase
(Decrease) in cash, cash equivalents and restricted
cash
|
8,663
|
|
(11,875)
|
|
Cash, cash equivalents
and restricted cash from continuing operations, beginning of
period
|
1,577
|
|
8,591
|
|
Cash, cash equivalents
and restricted cash from discontinued operations, beginning of
period
|
—
|
|
5,431
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
1,577
|
|
14,022
|
|
Cash, cash equivalents
and restricted cash from continuing operations, end of
period
|
10,240
|
|
2,147
|
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
—
|
|
—
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
10,240
|
|
$
|
2,147
|
|
DuPont de Nemours,
Inc.
Pro Forma Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Nine Months
Ended
|
September 30,
2020
|
September 30,
2019
|
As
Reported
|
Pro Forma
1
|
Net sales
|
$
|
15,145
|
|
$
|
16,308
|
|
Cost of
sales
|
10,001
|
|
10,670
|
|
Research and
development expenses
|
644
|
|
724
|
|
Selling, general and
administrative expenses
|
1,698
|
|
2,013
|
|
Amortization of
intangibles
|
1,591
|
|
755
|
|
Restructuring and
asset related charges - net
|
807
|
|
290
|
|
Goodwill impairment
charges
|
3,214
|
|
1,175
|
|
Integration and
separation costs
|
469
|
|
976
|
|
Equity in earnings of
nonconsolidated affiliates
|
172
|
|
132
|
|
Sundry income
(expense) - net
|
627
|
|
144
|
|
Interest
expense
|
573
|
|
522
|
|
Loss from continuing
operations before income taxes
|
(3,053)
|
|
(541)
|
|
Provision for income
taxes on continuing operations
|
100
|
|
172
|
|
Loss from continuing
operations, net of tax
|
(3,153)
|
|
(713)
|
|
Net income
attributable to noncontrolling interests from continuing
operations
|
20
|
|
18
|
|
Net loss from
continuing operations available for DuPont common
stockholders
|
$
|
(3,173)
|
|
$
|
(731)
|
|
|
|
|
Per common share
data:
|
|
|
Loss per common share
from continuing operations - basic
|
$
|
(4.31)
|
|
$
|
(0.98)
|
|
Loss per common share
from continuing operations - diluted
|
$
|
(4.31)
|
|
$
|
(0.98)
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
735.8
|
|
748.2
|
|
Weighted-average
common shares outstanding - diluted
|
735.8
|
|
748.2
|
|
1. Refer to page 17
for additional detail on the pro forma adjustments included in the
pro forma Consolidated Statements of Operations.
|
DuPont de Nemours,
Inc.
Net Sales by Segment and Geographic Region
|
|
Net Sales by
Segment and Geographic Region
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2020
|
Sep 30,
2019
|
Sep 30,
2020
|
Sep 30,
2019
|
Electronics &
Imaging
|
$
|
1,004
|
|
$
|
934
|
|
$
|
2,793
|
|
$
|
2,617
|
|
Nutrition &
Biosciences
|
1,467
|
|
1,525
|
|
4,557
|
|
4,618
|
|
Transportation &
Industrial
|
1,045
|
|
1,209
|
|
3,021
|
|
3,795
|
|
Safety &
Construction
|
1,249
|
|
1,327
|
|
3,769
|
|
3,951
|
|
Non-Core
|
331
|
|
431
|
|
1,005
|
|
1,327
|
|
Total
|
$
|
5,096
|
|
$
|
5,426
|
|
$
|
15,145
|
|
$
|
16,308
|
|
U.S. &
Canada
|
$
|
1,620
|
|
$
|
1,822
|
|
$
|
4,875
|
|
$
|
5,424
|
|
EMEA
1
|
1,069
|
|
1,227
|
|
3,405
|
|
3,898
|
|
Asia
Pacific
|
2,120
|
|
2,057
|
|
6,045
|
|
6,036
|
|
Latin
America
|
287
|
|
320
|
|
820
|
|
950
|
|
Total
|
$
|
5,096
|
|
$
|
5,426
|
|
$
|
15,145
|
|
$
|
16,308
|
|
Net Sales Variance
by Segment and Geographic Region
|
Three Months Ended
September 30, 2020
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Imaging
|
(1)
|
%
|
9
|
%
|
8
|
%
|
—
|
%
|
(1)
|
%
|
7
|
%
|
|
Nutrition &
Biosciences
|
—
|
|
(4)
|
|
(4)
|
|
—
|
|
—
|
|
(4)
|
|
|
Transportation &
Industrial
|
(5)
|
|
(9)
|
|
(14)
|
|
—
|
|
—
|
|
(14)
|
|
|
Safety &
Construction
|
1
|
|
(10)
|
|
(9)
|
|
—
|
|
3
|
|
(6)
|
|
|
Non-Core
|
5
|
|
(18)
|
|
(13)
|
|
—
|
|
(10)
|
|
(23)
|
|
|
Total
|
—
|
%
|
(6)
|
%
|
(6)
|
%
|
—
|
%
|
—
|
%
|
(6)
|
%
|
|
U.S. &
Canada
|
(1)
|
%
|
(9)
|
%
|
(10)
|
%
|
—
|
%
|
(1)
|
%
|
(11)
|
%
|
|
EMEA
1
|
(1)
|
|
(14)
|
|
(15)
|
|
2
|
|
—
|
|
(13)
|
|
|
Asia
Pacific
|
(1)
|
|
4
|
|
3
|
|
—
|
|
—
|
|
3
|
|
|
Latin
America
|
5
|
|
(8)
|
|
(3)
|
|
(6)
|
|
(1)
|
|
(10)
|
|
|
Total
|
—
|
%
|
(6)
|
%
|
(6)
|
%
|
—
|
%
|
—
|
%
|
(6)
|
%
|
|
Net Sales Variance
by Segment and Geographic Region
|
Nine Months Ended
September 30, 2020
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Imaging
|
(1)
|
%
|
8
|
%
|
7
|
%
|
—
|
%
|
—
|
%
|
7
|
%
|
|
Nutrition &
Biosciences
|
1
|
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
|
Transportation &
Industrial
|
(5)
|
|
(15)
|
|
(20)
|
|
—
|
|
—
|
|
(20)
|
|
|
Safety &
Construction
|
2
|
|
(8)
|
|
(6)
|
|
(1)
|
|
2
|
|
(5)
|
|
|
Non-Core
|
3
|
|
(17)
|
|
(14)
|
|
(1)
|
|
(9)
|
|
(24)
|
|
|
Total
|
—
|
%
|
(6)
|
%
|
(6)
|
%
|
(1)
|
%
|
—
|
%
|
(7)
|
%
|
|
U.S. &
Canada
|
(1)
|
%
|
(9)
|
%
|
(10)
|
%
|
—
|
%
|
—
|
%
|
(10)
|
%
|
|
EMEA
1
|
—
|
|
(12)
|
|
(12)
|
|
(1)
|
|
—
|
|
(13)
|
|
|
Asia
Pacific
|
(1)
|
|
2
|
|
1
|
|
(1)
|
|
—
|
|
—
|
|
|
Latin
America
|
3
|
|
(11)
|
|
(8)
|
|
(5)
|
|
(1)
|
|
(14)
|
|
|
Total
|
—
|
%
|
(6)
|
%
|
(6)
|
%
|
(1)
|
%
|
—
|
%
|
(7)
|
%
|
|
1. Europe, Middle
East and Africa.
|
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Operating
EBITDA by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
Sep 30,
2020
|
Sep 30,
2019
|
Sep 30,
2020
|
Sep 30,
2019
|
In millions
(Unaudited)
|
As
Reported
|
As
Reported
|
As
Reported
|
Pro
Forma
|
Electronics &
Imaging
|
$
|
357
|
|
$
|
320
|
|
$
|
887
|
|
$
|
854
|
|
Nutrition &
Biosciences
|
379
|
|
354
|
|
1,182
|
|
1,089
|
|
Transportation &
Industrial
|
242
|
|
306
|
|
599
|
|
1,036
|
|
Safety &
Construction
|
324
|
|
352
|
|
1,041
|
|
1,108
|
|
Non-Core
|
14
|
|
94
|
|
149
|
|
296
|
|
Corporate
|
(16)
|
|
(25)
|
|
(102)
|
|
(130)
|
|
Total
|
$
|
1,300
|
|
$
|
1,401
|
|
$
|
3,756
|
|
$
|
4,253
|
|
|
|
|
|
|
Equity in Earnings
of Nonconsolidated Affiliates
|
Three Months
Ended
|
Nine Months
Ended
|
|
Sep 30,
2020
|
Sep 30,
2019
|
Sep 30,
2020
|
Sep 30,
2019
|
In millions
(Unaudited)
|
As
Reported
|
As
Reported
|
As
Reported
|
Pro
Forma
|
Equity earnings
(GAAP)
|
$
|
30
|
|
$
|
43
|
|
$
|
172
|
|
$
|
132
|
|
Significant items
included in equity earnings 1
|
—
|
|
1
|
|
—
|
|
3
|
|
Equity earnings
included in operating EBITDA (non-GAAP)
|
$
|
30
|
|
$
|
44
|
|
$
|
172
|
|
$
|
135
|
|
|
|
|
|
|
Equity earnings
included in operating EBITDA by segment
|
|
|
|
Electronics &
Imaging
|
$
|
8
|
|
$
|
10
|
|
$
|
27
|
|
$
|
18
|
|
Nutrition &
Biosciences
|
1
|
|
—
|
|
2
|
|
—
|
|
Transportation &
Industrial
|
1
|
|
1
|
|
3
|
|
3
|
|
Safety &
Construction
|
7
|
|
7
|
|
19
|
|
22
|
|
Non-Core
|
13
|
|
26
|
|
121
|
|
92
|
|
Total equity earnings
included in operating EBITDA (non-GAAP)
|
$
|
30
|
|
$
|
44
|
|
$
|
172
|
|
$
|
135
|
|
1. Reflects
restructuring charges related to a joint venture in the Non-Core
segment.
|
|
|
|
|
|
|
|
Reconciliation of
"Income (Loss) from continuing operations, net of tax" to
"Operating EBITDA"
|
Three Months
Ended
|
Nine Months
Ended
|
Sep 30,
2020
|
Sep 30,
2019
|
Sep 30,
2020
|
Sep 30,
2019
|
In millions
(Unaudited)
|
As
Reported
|
As
Reported
|
As
Reported
|
Pro
Forma
|
Loss (income) from
continuing operations, net of tax (GAAP)
|
$
|
(72)
|
|
$
|
372
|
|
$
|
(3,153)
|
|
$
|
(713)
|
|
+ Provision for income
taxes on continuing operations
|
92
|
|
78
|
|
100
|
|
172
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
20
|
|
$
|
450
|
|
$
|
(3,053)
|
|
$
|
(541)
|
|
+ Depreciation and
amortization
|
780
|
|
499
|
|
2,326
|
|
1,533
|
|
- Interest
income 1
|
3
|
|
1
|
|
7
|
|
50
|
|
+ Interest expense
2
|
165
|
|
177
|
|
519
|
|
522
|
|
- Non-operating
pension/OPEB benefit 1
|
5
|
|
21
|
|
24
|
|
60
|
|
- Foreign
exchange losses, net 1
|
(10)
|
|
(23)
|
|
(41)
|
|
(101)
|
|
+ Costs historically
allocated to the materials science and agriculture businesses
3
|
—
|
|
—
|
|
—
|
|
256
|
|
- Significant
items
|
(333)
|
|
(274)
|
|
(3,954)
|
|
(2,492)
|
|
Operating EBITDA
(non-GAAP)
|
$
|
1,300
|
|
$
|
1,401
|
|
$
|
3,756
|
|
$
|
4,253
|
|
1. Included in
"Sundry income (expense) - net."
2. The three
and nine months ended September 30, 2020 excludes N&B financing
fee amortization. Refer to pages 14 and 15 for details of
significant items.
3. 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.
|
Reconciliation of
"Cash provided by operating activities" to Free Cash
Flow
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
In millions
(Unaudited)
|
Sep 30,
2020
|
Sep 30,
2019
|
Sep 30,
2020
|
Sep 30,
2019
|
|
Cash provided by
operating activities (GAAP) 1
|
$
|
1,274
|
|
$
|
882
|
|
$
|
2,794
|
|
$
|
831
|
|
|
Capital
expenditures
|
(203)
|
|
(291)
|
|
(922)
|
|
(2,091)
|
|
|
Free cash flow
(non-GAAP)
|
$
|
1,071
|
|
$
|
591
|
|
$
|
1,872
|
|
$
|
(1,260)
|
|
|
1. Refer to the
Consolidated Statement of Cash Flows included in the schedules
above for major GAAP cash flow categories as well as further detail
relating to the changes in "Cash provided by operating activities"
for the nine month periods noted. In addition, 2019 includes cash
activity related to Dow and Corteva prior to the
Distributions.
|
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2020
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
20
|
|
$
|
(79)
|
|
$
|
(0.11)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(127)
|
|
(97)
|
|
(0.13)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(14)
|
|
(12)
|
|
(0.02)
|
|
Restructuring and
asset related charges - net
|
Goodwill impairment
charges 6
|
(183)
|
|
(183)
|
|
(0.25)
|
|
Goodwill impairment
charges
|
Asset impairment
charges 7
|
(370)
|
|
(281)
|
|
(0.38)
|
|
Restructuring and
asset related charges - net
|
Gain on divestitures
8
|
393
|
|
232
|
|
0.32
|
|
Sundry income
(expense) - net
|
N&B financing
activities - net 9
|
(32)
|
|
(24)
|
|
(0.04)
|
|
Interest expense;
Sundry income (expense) - net
|
Income tax related
item
|
—
|
|
6
|
|
0.01
|
|
Provision for income
taxes on continuing operations
|
Total significant
items
|
$
|
(333)
|
|
$
|
(359)
|
|
$
|
(0.49)
|
|
|
Less: Merger-related
amortization of intangibles
|
(482)
|
|
(369)
|
|
(0.50)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
5
|
|
4
|
|
—
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
$
|
830
|
|
$
|
645
|
|
$
|
0.88
|
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
450
|
|
$
|
367
|
|
$
|
0.49
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(191)
|
|
(147)
|
|
(0.19)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(83)
|
|
(65)
|
|
(0.09)
|
|
Restructuring and
asset related charges - net; Equity in earnings of nonconsolidated
affiliates
|
Total significant
items
|
$
|
(274)
|
|
$
|
(212)
|
|
$
|
(0.28)
|
|
|
Less: Merger-related
amortization of intangibles
|
(199)
|
|
(155)
|
|
(0.21)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
21
|
|
18
|
|
0.02
|
|
Sundry income
(expense) - net
|
Adjusted pro forma
results (non-GAAP)
|
$
|
902
|
|
$
|
716
|
|
$
|
0.96
|
|
|
1. Income
(loss) from continuing operations before income taxes.
2. Net income
(loss) 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
and beginning in the fourth quarter of 2019, the intended
separation of the Nutrition & Biosciences business.
5.
Includes Board approved restructuring plans and other asset related
charges.
6.
Reflects non-cash, goodwill impairment charges related to the
Non-Core segment.
7.
Reflects impairment charges related to long-lived asset groups
within the Non-Core segment.
8.
Reflects the net benefit related to the sale of the trichlorosilane
business ("TCS") and equity stake in Hemlock Semiconductor JV
(collectively, "TCS/Hemlock"), which includes a settlement of a
supply agreement dispute, within the Non-Core segment.
9.
Includes interest expense, net and financing fee amortization
related to committed financing incurred in connection with the
intended separation of the N&B Business.
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2020
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
(3,053)
|
|
$
|
(3,173)
|
|
$
|
(4.31)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(469)
|
|
(363)
|
|
(0.49)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(146)
|
|
(113)
|
|
(0.15)
|
|
Restructuring and
asset related charges - net
|
Goodwill impairment
charges 6
|
(3,214)
|
|
(3,214)
|
|
(4.37)
|
|
Goodwill impairment
charges
|
Asset impairment
charges 7
|
(661)
|
|
(503)
|
|
(0.68)
|
|
Restructuring and
asset related charges - net
|
Gain on divestitures
8
|
590
|
|
334
|
|
0.45
|
|
Sundry income
(expense) - net
|
N&B financing
activities - net 9
|
(54)
|
|
(41)
|
|
(0.06)
|
|
Interest expense;
Sundry income (expense) - net
|
Income tax related
item
|
—
|
|
34
|
|
0.05
|
|
Provision for income
taxes on continuing operations
|
Total significant
items
|
$
|
(3,954)
|
|
$
|
(3,866)
|
|
$
|
(5.25)
|
|
|
Less: Merger-related
amortization of intangibles
|
(1,438)
|
|
(1,101)
|
|
(1.49)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
24
|
|
18
|
|
0.02
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
2,315
|
|
1,776
|
|
$
|
2.41
|
|
|
Significant Items
Impacting Pro Forma Results for the Nine Months Ended September 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
(541)
|
|
$
|
(731)
|
|
$
|
(0.98)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(976)
|
|
(747)
|
|
(1.00)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(230)
|
|
(178)
|
|
(0.24)
|
|
Restructuring and
asset related charges - net; Equity in earnings of nonconsolidated
affiliates
|
Goodwill impairment
charges 10
|
(1,175)
|
|
(1,173)
|
|
(1.57)
|
|
Goodwill impairment
charges
|
Asset impairment
charges 11
|
(63)
|
|
(47)
|
|
(0.06)
|
|
Restructuring and
asset related charges - net
|
Income tax related
item
|
(48)
|
|
(105)
|
|
(0.14)
|
|
Sundry income
(expense) - net; Provision for income taxes on continuing
operations
|
Total significant
items
|
$
|
(2,492)
|
|
$
|
(2,250)
|
|
$
|
(3.01)
|
|
|
Less: Merger-related
amortization of intangibles
|
(598)
|
|
(469)
|
|
(0.63)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
60
|
|
55
|
|
0.07
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials science and agriculture
businesses 12
|
(256)
|
|
(197)
|
|
(0.26)
|
|
Cost of sales;
Research and development expense; Selling, general and
administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
2,745
|
|
$
|
2,130
|
|
$
|
2.85
|
|
|
1. Income
(loss) from continuing operations before income taxes.
2. Net income
(loss) 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, the
Distributions and, beginning in the fourth quarter of 2019, the
intended separation of the Nutrition & Biosciences
business.
5. Includes
Board approved restructuring plans and other asset related
charges.
6. Reflects
non-cash goodwill impairment charges recorded as follows: $533
million charge recorded in the first quarter 2020 related to the
Non-Core segment; a $2,498 million charge recorded in the second
quarter 2020 related to the Transportation & Industrial
segment, and $183 million in charges recorded in the third quarter
of 2020 related to the Non-Core segment.
7. Reflects a
$270 million pre-tax impairment charge recorded in first quarter
2020 related to a long-lived asset group within the Non-Core
segment, a $21 million pre-tax impairment charge recorded in the
second quarter 2020 related to other intangible assets within the
Transportation & Industrial segment, and $370 million in
pre-tax impairment charges recorded in third quarter 2020 related
to long-lived asset groups and other intangible assets within the
Non-Core segment.
8. Reflects a
gain on the first quarter 2020 sale of the Company's Compound
Semiconductor Solutions business within the Electronics &
Imaging segment and a net benefit related to the third quarter 2020
sale of TCS/Hemlock, which includes a settlement of a supply
contract dispute, within the Non-Core segment.
9. Includes
interest expense, net and financing fee amortization related to
committed financing in connection with the intended separation of
the N&B Business.
10. Reflects goodwill
impairment charges related to the Nutrition & Biosciences and
Non-Core segments.
11. Reflects an
impairment charge related to an equity method investment within the
Nutrition & Biosciences segment.
12. 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.
Supplemental Unaudited Pro Forma Combined Financial
Information
|
|
Unaudited Pro
Forma Combined Statement of Income
|
Nine Months Ended
September 30, 2019
|
In millions, except
per share amounts
|
DuPont
1
|
Pro Forma
Adjustments2
|
Pro
Forma
|
Net sales
|
$
|
16,308
|
|
$
|
—
|
|
$
|
16,308
|
|
Cost of
sales
|
10,648
|
|
22
|
|
10,670
|
|
Research and
development expenses
|
724
|
|
—
|
|
724
|
|
Selling, general and
administrative expenses
|
2,013
|
|
—
|
|
2,013
|
|
Amortization of
intangibles
|
755
|
|
—
|
|
755
|
|
Restructuring and
asset related charges - net
|
290
|
|
—
|
|
290
|
|
Goodwill impairment
charges
|
1,175
|
|
—
|
|
1,175
|
|
Integration and
separation costs
|
1,149
|
|
(173)
|
|
976
|
|
Equity in earnings of
nonconsolidated affiliates
|
132
|
|
—
|
|
132
|
|
Sundry income
(expense) - net
|
144
|
|
—
|
|
144
|
|
Interest
expense
|
493
|
|
29
|
|
522
|
|
Loss from continuing
operations before income taxes
|
(663)
|
|
122
|
|
(541)
|
|
Provision for income
taxes on continuing operations
|
142
|
|
30
|
|
172
|
|
Loss from continuing
operations, net of tax
|
(805)
|
|
92
|
|
(713)
|
|
Net income
attributable to noncontrolling interests from continuing
operations
|
18
|
|
—
|
|
18
|
|
Net loss from
continuing operations attributable to DuPont
|
$
|
(823)
|
|
$
|
92
|
|
$
|
(731)
|
|
|
|
|
|
Per common share
data:
|
|
|
|
Loss per common share
from continuing operations - basic
|
$
|
(1.10)
|
|
|
$
|
(0.98)
|
|
Loss per common share
from continuing operations - diluted
|
$
|
(1.10)
|
|
|
$
|
(0.98)
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
748.2
|
|
|
748.2
|
|
Weighted-average
common shares outstanding - diluted
|
748.2
|
|
|
748.2
|
|
1. See the historical
U.S. GAAP 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