E I DU PONT DE NEMOURS AND CO WILMINGTON, Del., Jan. 27, 2015 /PRNewswire/ -- DuPont today announced fourth quarter 2014 operating earnings of $0.71 per share compared to $0.59 per share in the prior year. GAAP(1) earnings from continuing operations were $668 million or $0.73 per share, versus $183 million or $0.19 per share last year. Fourth quarter results reflect a 20-percent increase in operating earnings per share year-over-year realized from a number of company actions, including strategic portfolio initiatives, continued productivity improvements related to the company's operational redesign, reductions in performance-based compensation, and share repurchases.
For the full year 2014, DuPont delivered operating earnings of $4.01 per share compared to $3.88 per share in the prior year. GAAP(1) earnings from continuing operations were $3.90 per share, versus $3.04 per share last year.
Volume, margins and earnings grew in the majority of segments, despite significant market and macroeconomic challenges, including a weaker Ag economy, a stronger dollar and a difficult market pricing environment.
"Our 2014 results demonstrate continued progress on our strategic plan to deliver higher growth and higher value, including ongoing portfolio refinement through several strategic portfolio actions and steady progress on the planned Chemours separation, substantial cost reductions from our operational redesign and productivity initiatives, and the continued return of capital to our shareholders through $2 billion of share repurchases and an increase in the common stock dividend of 4 percent," Kullman said.
"Rapid progress in our redesign initiative has enabled us to achieve a $1 billion run-rate target by year end 2015, well ahead of schedule, and we have identified at least $300 million of additional opportunities to streamline our operations and reduce costs. This initiative remains a priority and we expect to see further results over time," Kullman added. "In 2015, we remain focused on generating superior returns for our shareholders, including through return of capital from the expected Chemours dividend, while positioning DuPont for our next stage of growth."
(1)Generally Accepted
Accounting Principles (GAAP)
Company Increases Cost Reduction Commitment and Outlines Expectations for Return of Capital From Chemours One-Time Dividend
The company has increased its cost reduction commitment from its operational redesign by approximately $300 million to at least $1.3 billion of total expected savings by 2017. Additionally, by the end of 2015, the company now expects annual run-rate savings of approximately $1 billion, significantly ahead of its previously announced schedule.
In addition the company said it expects to return all or substantially all of the one-time dividend proceeds from Chemours to DuPont shareholders via share repurchases over the 12 to 18 months following the separation of Chemours. Based on the target BB credit rating of Chemours, this amount is anticipated to be approximately $4 billion, pending the final credit ratings and underlying business conditions for Chemours.
Fourth Quarter Highlights
-- Sales were $7.4 billion versus $7.7 billion in the same period last
year, down 5 percent primarily due to portfolio changes and negative
currency impacts.
-- Volume grew in all segments except for Electronics & Communications.
-- Segment operating earnings were $1,014 million, reflecting disciplined
execution despite macroeconomic headwinds, including a weaker Ag economy
and the impact from a stronger U.S. dollar.
-- Cost reductions from operational redesign contributed $0.05 per share to
operating earnings in the quarter.
Full Year Highlights
-- Sales were $34.7 billion versus $35.7 billion last year, down 3 percent
due to weakness in Ag markets, portfolio changes and negative currency
impacts. A 1-percent increase in volume was offset by price.
-- Segment operating earnings of $6.0 billion increased 1 percent versus
$5.9 billion last year as the negative impact of portfolio changes and
currency were more than offset by continued productivity improvements,
lower performance-based compensation and gains from business
divestitures.
-- Continued to execute on our plan to deliver higher growth and higher
value for our shareholders:
-- Cost reductions from operational redesign contributed $0.07 per
share to operating earnings in 2014;
-- Completed 10 strategic portfolio actions during the year;
-- Completed a $2 billion share buyback; and
-- Increased the common stock dividend 4 percent in July 2014.
-- The Chemours separation remains on track, as highlighted by the initial
Form 10 filing on December 18.
Global Consolidated Net Sales - 4th Quarter
Fourth quarter 2014 net sales of $7.4 billion decreased 5 percent versus last year, reflecting a 4-percent impact from portfolio changes, 1-percent lower local selling prices and a 3-percent negative currency impact, partially offset by 3-percent higher volume. The table below shows fourth quarter regional sales and variances versus fourth quarter 2013.
Three Months Ended
December 31, 2014 Percent Change Due to:
----------------- ----------------------
% Local Currency Portfolio /
$ Change Price Effect Volume Other
--- ------ ----- ------ ------ -----
(Dollars in
millions)
U.S. & Canada $2,580 (3) (3) - 6 (6)
EMEA * 1,672 (5) 2 (6) 3 (4)
Asia Pacific 1,910 (4) (2) (2) 2 (2)
Latin America 1,216 (10) (3) (5) (1) (1)
-----
Total Consolidated
Sales $7,378 (5) (1) (3) 3 (4)
* Europe, Middle East & Africa
Segment Sales - 4th Quarter
The table below shows fourth quarter 2014 segment sales with related variances versus the fourth quarter 2013.
Three Months Ended Percent Change
December 31, 2014 Due to:
----------------- -------
USD Portfolio /
$ % Change Price Volume Other
--- -------- ----- ------ -----
(Dollars in millions)
Agriculture $1,732 (4) (8) 5 (1)
Electronics & Communications 573 (11) (6) (5) -
Industrial Biosciences 322 (1) (3) 2 -
Nutrition & Health 843 (3) (4) 1 -
Performance Chemicals 1,564 (6) (4) 3 (5)
Performance Materials 1,461 (4) - 4 (8)
Safety & Protection 943 (3) (1) 3 (5)
Other 1
---
Total segment sales 7,439
Elimination of transfers (61)
Consolidated net sales $7,378
------
Operating Earnings - 4th Quarter
Change vs. 2013
---------------
(Dollars in millions) 4Q14 4Q13 $ %
---- ---- --- ---
Agriculture $129 $88 $41 47%
Electronics &
Communications 97 93 4 4%
Industrial Biosciences 49 40 9 23%
Nutrition & Health 82 81 1 1%
Performance Chemicals
(1) 228 230 (2) -1%
Performance Materials
(1) 332 294 38 13%
Safety & Protection 209 209 - 0%
Other (112) (96) (16) -17%
---- --- ---
Total segment operating
earnings (2) 1,014 939 75 8%
Exchange gains (losses)
(3) 122 (73) 195
Corporate expenses (144) (191) 47
Interest expense (87) (108) 21
--- ---- ---
Operating earnings
before income taxes 905 567 338 60%
Provision for income
taxes on operating
earnings (256) (9) (247)
Net income attributable
to noncontrolling
interests - - -
Operating earnings $649 $558 $91 16%
==== ==== ===
Operating earnings per
share $0.71 $0.59 $0.12 20%
===== ===== =====
(1) Prior period reflects the reclassifications of the Viton(R) fluoroelastomer product line from Performance Materials to Performance Chemicals.
(2) See Schedules B and C for listing of significant items and their impact by segment.
(3) See Schedule D for additional information on exchange gains and losses.
Global Consolidated Net Sales - Full Year
Full-year 2014 net sales of $34.7 billion decreased 3 percent versus last year, reflecting a 2-percent impact from portfolio changes, 1-percent lower local selling prices and a 1-percent negative currency impact, partially offset by 1-percent higher volume. The table below shows full-year regional sales and variances versus full year 2013.
12 Months Ended
December 31, 2014 Percent Change Due to:
----------------- ----------------------
% Local Currency Portfolio /
$ Change Price Effect Volume Other
--- ------ ----- ------ ------ -----
(Dollars in millions)
U.S. & Canada $14,054 (5) (1) - (1) (3)
EMEA * 8,483 1 - - 2 (1)
Asia Pacific 7,703 (1) (2) (2) 4 (1)
Latin America 4,483 (6) (1) (3) (1) (1)
-----
Total Consolidated Sales $34,723 (3) (1) (1) 1 (2)
* Europe, Middle East & Africa
Segment Sales - Full Year
The table below shows full-year 2014 segment sales with related variances versus the prior year.
12 Months Ended Percent Change
December 31, 2014 Due to:
----------------- -------
USD Portfolio /
$ % Change Price Volume Other
--- -------- ----- ------ -----
(Dollars in millions)
Agriculture $11,304 (4) (1) (3) -
Electronics &
Communications 2,393 (6) (8) 2 -
Industrial Biosciences 1,258 3 1 2 -
Nutrition & Health 3,529 2 (1) 3 -
Performance Chemicals 6,497 (6) (4) 2 (4)
Performance Materials 6,129 (2) - 2 (4)
Safety & Protection 3,896 - (1) 3 (2)
Other 5
---
Total segment sales 35,011
Elimination of transfers (288)
Consolidated net sales $34,723
-------
Operating Earnings - Full Year
Change vs. 2013
---------------
(Dollars in millions) FY 2014 FY 2013 $ %
------- ------- --- ---
Agriculture $2,352 $2,483 $(131) -5%
Electronics &
Communications 355 334 21 6%
Industrial Biosciences 211 169 42 25%
Nutrition & Health 380 299 81 27%
Performance Chemicals
(1) 934 1,015 (81) -8%
Performance Materials
(1) 1,298 1,280 18 1%
Safety & Protection 794 690 104 15%
Other (369) (345) (24) -7%
---- ---- ---
Total segment operating
earnings (2) 5,955 5,925 30 1%
Exchange gains
(losses)(2), (3) 193 (128) 321
Corporate expenses (702) (762) 60
Interest expense (377) (448) 71
---- ---- ---
Operating earnings
before income taxes 5,069 4,587 482 11%
Provision for income
taxes on operating
earnings (1,355) (941) (414)
Net income attributable
to noncontrolling
interests 11 14 (3)
Operating earnings $3,703 $3,632 $71 2%
====== ====== ===
Operating earnings per
share $4.01 $3.88 $0.13 3%
===== ===== =====
(1) Prior period reflects the reclassifications of the Viton(R) fluoroelastomer product line from Performance Materials to Performance Chemicals.
(2) See Schedules B and C for listing of significant items and their impact by segment.
(3) See Schedule D for additional information on exchange gains and losses.
The following is a summary of business results for each of the company's reportable segments comparing fourth quarter with the prior year, unless otherwise noted. References to selling price are on a U.S. dollar basis, including the impact of currency.
Fourth quarter results included about $175 million of year-over-year lower performance-based compensation. The impact by segment is as follows: Agriculture - $90 million, Electronics & Communications - $10 million, Industrial Biosciences - $5 million, Nutrition & Health - $10 million, Performance Chemicals - $30 million, Performance Materials - $15 million, and Safety & Protection - $15 million.
Full year results included a year-over-year benefit of about $200 million due to lower performance-based compensation, of which $110 million impacted Agriculture.
Agriculture - Operating earnings of $129 million increased $41 million, or 47 percent. Lower corn seed sales in Brazil and a negative currency impact were more than offset by lower costs, gains from the sale of businesses of $36 million and the timing of seed shipments.
Full year 2014 operating earnings of $2.4 billion decreased $0.1 billion, or 5 percent, on lower corn seed volumes and the negative impact of currency, partially offset by higher crop protection volumes, higher local seed prices, and lower costs, including seed inputs.
Electronics & Communications - Operating earnings of $97 million increased $4 million, or 4 percent, as lower costs and productivity improvements were offset by lower Solamet(®) paste volumes due to the impact of competitive pressures.
Full year 2014 operating earnings of $355 million increased $21 million, or 6 percent, on volume growth and productivity gains, partially offset by the absence of $20 million in OLED licensing income realized during 2013.
Industrial Biosciences - Operating earnings of $49 million increased $9 million, or 23 percent, primarily from improved product mix, lower costs and productivity improvements.
Full year 2014 operating earnings of $211 million increased $42 million, or 25 percent, on increased enzyme demand, principally for ethanol production, and productivity improvements.
Nutrition & Health - Operating earnings of $82 million were essentially flat with prior year as the negative impact of currency and product mix were offset by higher volumes, a gain on termination of a distribution agreement of $18 million, and lower costs.
Full year 2014 operating earnings of $380 million increased $81 million, or 27 percent, from improved product mix, volume growth, productivity and a gain on termination of a distribution agreement of $18 million, partially offset by the negative impact of currency.
Performance Chemicals - Operating earnings of $228 million decreased $2 million as lower prices for titanium dioxide and fluoroproducts were essentially offset by volume increases, lower costs, and a gain from the sale of a business of $23 million.
Full year 2014 operating earnings of $934 million decreased $81 million, or 8 percent, as lower prices for refrigerants, titanium dioxide, and fluoroproducts were partially offset by volume increases, lower costs, and a gain from the sale of a business of $23 million.
Performance Materials - Operating earnings of $332 million increased $38 million, or 13 percent, due primarily to increased ethylene and performance polymer volumes, productivity improvements, and lower costs.
Full year 2014 operating earnings of $1.3 billion were essentially equal to prior year, as increased automotive demand was offset by the impact of the sale of GLS/Vinyls.
Safety & Protection - Operating earnings of $209 million were flat with prior year as lower local prices, currency, and portfolio changes associated with the sale of Sontara(®) were offset by increased demand for Nomex(®) thermal resistant products, Kevlar(®) high strength materials and Tyvek(®) protective material, and lower costs.
Full year 2014 operating earnings of $794 million increased $104 million, or 15 percent, from higher volumes driven by increased demand for Nomex(®) and Kevlar(®), productivity improvements, and lower product costs, partially offset by lower sales from clean technologies offerings, a negative currency impact, and portfolio changes.
Additional information is available on the DuPont Investor Center website at http://www.investors.dupont.com.
Outlook
The company expects 2015 operating earnings of $4.00 to $4.20 per share, including the full-year outlook for the Performance Chemicals segment. This estimate includes an approximately $0.60 per share negative currency impact due to the recent strengthening of the dollar based upon an average basket of exchange rates for our business at January 23. The currency impact is expected to be most significant in the first half of the year due to the seasonality of operating earnings from Agriculture in the northern hemisphere. In 2015, the company anticipates that the increase in the base tax rate from prior year will be about a $0.15 per share headwind. The company also expects that the operational redesign will deliver savings of about $0.35 per share in 2015.
The 2015 outlook does not reflect the planned separation of the Performance Chemicals segment or the impact of the expected return of capital related to the separation.
DuPont will hold a conference call and webcast on Tuesday, January 27, 2015, at 9:00 AM EDT to discuss this news release. The webcast and additional presentation materials can be accessed by visiting the company's investor website (Events & Presentations) at www.investors.dupont.com. A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 38251527#. For additional information see the investor center at http://www.dupont.com.
Use of Non-GAAP Measures
Management believes that certain non-GAAP measurements are meaningful to investors because they provide insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules A, C and D.
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.
Forward-Looking Statements: This news release contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "believes," "intends," "estimates," "anticipates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; ability to protect and enforce the company's intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses and successful completion of the proposed spinoff of the Performance Chemicals segment including ability to fully realize the expected benefits of the proposed spinoff. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
DuPont intends to file a proxy statement with the U.S. Securities and Exchange Commission (the "SEC") with respect to the 2015 Annual Meeting. DUPONT STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT, THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
DuPont, its directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from DuPont stockholders in connection with the matters to be considered at DuPont's 2015 Annual Meeting. Information about DuPont's directors and executive officers is available in DuPont's proxy statement, dated March 14, 2014, for its 2014 Annual Meeting. To the extent holdings of DuPont's securities by such directors or executive officers have changed since the amounts printed in the 2014 proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with DuPont's 2015 Annual Meeting. Stockholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by DuPont with the SEC free of charge at the SEC's website at www.sec.gov. Copies will also be available free of charge at DuPont's website at www.dupont.com or by contacting DuPont Investor Relations at (302) 774-4994.
E.I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)
SCHEDULE A
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Net sales $7,378 $7,747 $34,723 $35,734
Other income, net (a) 541 89 1,323 410
--- --- ----- ---
Total 7,919 7,836 36,046 36,144
Cost of goods sold 4,823 5,132 21,703 22,547
Other operating charges (a) 158 460 1,067 1,560
Selling, general and administrative expenses 1,164 1,350 5,344 5,833
Research and development expense 490 550 2,067 2,153
Interest expense 87 108 377 448
Employee separation / asset related charges, net (a) 234 114 497 114
--- --- --- ---
Total 6,956 7,714 31,055 32,655
Income from continuing operations before income taxes 963 122 4,991 3,489
Provision for (benefit from) income taxes on continuing operations (a) 295 (61) 1,370 626
--- --- ----- ---
Income from continuing operations after income taxes 668 183 3,621 2,863
Income from discontinued operations after taxes 15 2 15 1,999
--- --- --- -----
Net income 683 185 3,636 4,862
Less: Net income attributable to noncontrolling interests - - 11 14
--- --- --- ---
Net income attributable to DuPont $683 $185 $3,625 $4,848
==== ==== ====== ======
Basic earnings per share of common stock (b):
Basic earnings per share of common stock from continuing operations $0.73 $0.19 $3.94 $3.07
Basic earnings per share of common stock from discontinued operations 0.02 - 0.02 2.16
---- --- ---- ----
Basic earnings per share of common stock $0.75 $0.20 $3.95 $5.22
===== ===== ===== =====
Diluted earnings per share of common stock (b):
Diluted earnings per share of common stock from continuing operations $0.73 $0.19 $3.90 $3.04
Diluted earnings per share of common stock from discontinued operations 0.02 - 0.02 2.14
---- --- ---- ----
Diluted earnings per share of common stock $0.74 $0.20 $3.92 $5.18
===== ===== ===== =====
Dividends per share of common stock $0.47 $0.45 $1.84 $1.78
Average number of shares outstanding used in earnings per share (EPS) calculation:
Basic 906,339,000 927,279,000 914,752,000 925,984,000
Diluted 913,650,000 934,949,000 921,873,000 933,147,000
(a) See Schedule B for detail of significant items.
(b) The sum of the individual earnings per share amounts may not equal the total due to rounding.
Reconciliation of Non-GAAP Measures
-----------------------------------
Summary of Earnings Comparison
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2014 2013 % 2014 2013 %
Change Change
Income from continuing operations after income taxes (GAAP) $668 $183 265% $3,621 $2,863 26%
Less: Significant items charge (benefit) included in income from continuing 39 (294) (9) (423)
operations after income taxes (per Schedule B)
Non-operating pension/OPEB costs included in income from continuing (20) (81) (84) (360)
operations after income taxes
Net income attributable to noncontrolling interest - - 11 14
Operating earnings (Non-GAAP) $649 $558 16% $3,703 $3,632 2%
==== ==== ====== ======
EPS from continuing operations attributable to DuPont (GAAP) $0.73 $0.19 284% $3.90 $3.04 28%
Significant items charge (benefit) included in EPS (per Schedule B) 0.04 (0.31) (0.01) (0.45)
Non-operating pension/OPEB costs included in EPS (0.02) (0.09) (0.10) (0.39)
----- -----
Operating EPS (Non-GAAP) $0.71 $0.59 20% $4.01 $3.88 3%
===== ===== ===== =====
E.I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
December 31, December 31,
2014 2013
---- ----
Assets
Current assets
Cash and cash equivalents $6,910 $8,941
Marketable securities 124 145
Accounts and notes receivable, net 6,005 6,047
Inventories 7,841 8,042
Prepaid expenses 279 206
Deferred income taxes 589 775
Assets held for sale - 228
Total current assets 21,748 24,384
Property, plant and equipment, net of accumulated depreciation 13,386 12,993
(December 31, 2014- $19,942; December 31, 2013 - $19,438)
Goodwill 4,529 4,713
Other intangible assets 4,580 5,096
Investment in affiliates 886 1,011
Deferred income taxes 3,651 2,353
Other assets 1,096 949
----- ---
Total $49,876 $51,499
======= =======
Liabilities and Equity
Current liabilities
Accounts payable $4,822 $5,180
Short-term borrowings and capital lease obligations 1,423 1,721
Income taxes 547 247
Other accrued liabilities 5,848 6,219
----- -----
Total current liabilities 12,640 13,367
Long-term borrowings and capital lease obligations 9,271 10,741
Other liabilities 13,819 10,179
Deferred income taxes 768 926
--- ---
Total liabilities 36,498 35,213
------ ------
Commitments and contingent liabilities
Stockholders' equity
Preferred stock 237 237
Common stock, $0.30 par value; 1,800,000,000 shares authorized; 298 304
Issued at December 31, 2014 - 992,020,000; December 31, 2013 - 1,014,027,000
Additional paid-in capital 11,174 11,072
Reinvested earnings 17,045 16,784
Accumulated other comprehensive loss (8,707) (5,441)
Common stock held in treasury, at cost (87,041,000 shares at December 31, 2014 and December 31, 2013) (6,727) (6,727)
------ ------
Total DuPont stockholders' equity 13,320 16,229
------ ------
Noncontrolling interests 58 57
--- ---
Total equity 13,378 16,286
Total $49,876 $51,499
======= =======
E.I. du Pont de Nemours and Company
Condensed Consolidated Statement of Cash Flows
(Dollars in millions)
SCHEDULE A (continued)
Twelve Months Ended
December 31,
------------
2014 2013
---- ----
Total Company
Net income $3,636 $4,862
Adjustments to
reconcile net income
to cash used for
operating activities:
Depreciation 1,254 1,280
Amortization of
intangible assets 363 323
Net periodic pension
benefit cost 406 953
Contributions to
pension plans (311) (313)
Gain on sales of
businesses (726) (2,687)
Other operating
activities -net 362 177
Change in operating
assets and
liabilities -net (1,272) (1,416)
------ ------
Cash provided by
operating activities 3,712 3,179
Investing activities
Purchases of property,
plant and equipment (2,020) (1,882)
Investments in
affiliates (42) (58)
Payments for
businesses -net of
cash acquired - (133)
Proceeds from sales of
businesses -net 1,058 4,841
Proceeds from sales of
assets -net 34 142
Net decrease
(increase) in short-
term financial
instruments 14 (45)
Foreign currency
exchange contract
settlements 430 40
Other investing
activities -net 189 40
--- ---
Cash (used for)
provided by investing
activities (337) 2,945
Financing activities
Dividends paid to
stockholders (1,696) (1,661)
Net (decrease)
increase in
borrowings (1,701) 717
Repurchase of common
stock (2,000) (1,000)
Proceeds from exercise
of stock options 327 536
Payments for
noncontrolling
interest - (65)
Other financing
activities -net (4) (1)
--- ---
Cash used for
financing activities (5,074) (1,474)
Effect of exchange
rate changes on cash (332) (88)
---- ---
(Decrease) increase in
cash and cash
equivalents (2,031) 4,562
Cash and cash
equivalents at
beginning of period 8,941 4,379
----- -----
Cash and cash
equivalents at end of
period $6,910 $8,941
====== ======
Reconciliation of Non-
GAAP Measure
----------------------
Calculation of Free
Cash Flow -Total
Company
Twelve Months Ended
December 31,
------------
2014 2013
---- ----
Cash provided by
operating activities $3,712 $3,179
Purchases of property,
plant and equipment (2,020) (1,882)
Free cash flow $1,692 $1,297
====== ======
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)
SCHEDULE B
SIGNIFICANT ITEMS FROM CONTINUING OPERATIONS
Pre-tax After-tax ($ Per Share)
------- --------- ------------
2014 2013 2014 2013 2014 2013
---- ---- ---- ---- ---- ----
1st Quarter
-----------
Separation transaction costs (a) $(16) $ - $(12) $ - $(0.01) $ -
Customer claims charge (e) - (35) - (22) - (0.02)
Income tax items (f) - - - 42 - 0.04
1st Quarter - Total $(16) $(35) $(12) $20 $(0.01) $0.02
==== ==== ==== === ====== =====
2nd Quarter
-----------
Separation transaction costs (a) $(35) $ - $(26) $ - $(0.03) $ -
Gain on sale of business (b) 391 - 273 - 0.30 -
Restructuring charge (c) (263) - (182) - (0.20) -
Venezuela devaluation (d) (58) - (57) - (0.06) -
Customer claims charge (e) - (80) - (51) - (0.05)
Income tax items (g) - (11) - (27) - (0.03)
2nd Quarter - Total $35 $(91) $8 $(78) $0.01 $(0.08)
=== ==== === ==== ===== ======
3rd Quarter
-----------
Separation transaction costs (a) $(61) $ - $(44) $ - $(0.05) $ -
Customer claims charge (e) - (40) - (24) - (0.03)
Litigation settlement (h) - (72) - (47) - (0.05)
3rd Quarter - Total $(61) $(112) $(44) $(71) $(0.05) $(0.08)
==== ===== ==== ==== ====== ======
4th Quarter
-----------
Separation transaction costs (a) $(63) $ - $(49) $ - $(0.05) $ -
Customer claims recovery (charge) (e) 210 (197) 134 (129) 0.14 (0.13)
Gain on sale of business (b) 240 - 154 - 0.17 -
Restructuring charge/adjustments (c) (299) (124) (200) (165) (0.22) (0.18)
4th Quarter - Total $88 $(321) $39 $(294) $0.04 $(0.31)
=== ===== === ===== ===== ======
Full Year - Total (i) $46 $(559) $(9) $(423) $(0.01) $(0.45)
=== ===== === ===== ====== ======
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing
Operations
(Dollars in millions, except per share amounts)
SCHEDULE B (continued)
(a) Fourth, third, second and first
quarter 2014 included a charge of
$(63), $(61), $(35) and $(16),
respectively, recorded in other
operating charges associated with
transaction costs related to the
separation of the Performance
Chemicals segment.
(b) Fourth quarter 2014 included a gain of
$240 recorded in other income, net
associated with the sale of copper
fungicides and land management
businesses, both within the
Agriculture segment. Second quarter
2014 included a gain of $391 recorded
in other income, net associated with
the sale of Glass Laminating
Solutions/Vinyls in the Performance
Materials segment.
(c) As a result of the company's plan to
reduce residual costs associated with
the separation of the Performance
Chemicals segment and to improve
productivity across all businesses
and functions, fourth quarter 2014
included a $(299) restructuring
charge consisting of $(234) recorded
in employee separation/asset related
charges, net, and $(65) recorded in
other income, net. The charges
include $(153) of severance and
related benefit costs, $(14) of other
non-personnel charges, and $(132) of
asset related charges, including
$(65) of charges associated with the
restructuring actions of a joint
venture. Pre-tax charges by segment
are: Agriculture - $(87),
Electronics & Communications -
$(16), Industrial Biosciences -
$(11), Nutrition & Health - $(7),
Performance Chemicals - $(2),
Performance Materials - $(70),
Safety & Protection - $(21), Other -
$(20), and Corporate expenses -
$(65).
Similarly, second quarter 2014
included a $(263) restructuring
charge recorded in employee
separation/asset related charges,
net, consisting of $(166) of
severance and related benefit costs,
$(94) of asset related charges, and
$(3) of other non-personnel charges.
Pre-tax charges by segment are:
Agriculture - $(47), Electronics &
Communications - $(68), Industrial
Biosciences - $(2), Nutrition &
Health - $(8), Performance Chemicals
- $(19), Performance Materials -
$(29), Safety & Protection - $(31),
Other - $(2), and Corporate expenses
- $(57).
Fourth quarter 2013 included an
impairment charge of $(129) recorded
in employee separation/asset related
charges, net related to an asset
grouping within the Electronics &
Communications segment. The fourth
quarter 2013 charge was the result of
strategic decisions related to the
thin film photovoltaic market.
Fourth quarter 2013 also included a
net $5 restructuring adjustment
consisting of a $24 benefit
associated with prior year
restructuring programs and a $(19)
charge associated with restructuring
actions related to a joint venture.
The majority of the $24 net reduction
recorded in employee separation/
asset related charges, net was due to
the achievement of work force
reductions through non-severance
programs associated with the 2012
restructuring program. The charge of
$(19) included $(9) recorded in
employee separation/asset related
charges, net and $(10) recorded in
other income, net and was the result
of restructuring actions related to a
joint venture within the Performance
Materials segment. Pre-tax amounts
by segment were: Agriculture-$1,
Electronics & Communication-$(2),
Industrial Biosciences-$1, Nutrition
& Health-$6, Performance Chemicals-
$(2), Performance Materials-$(16),
Safety & Protection-$4, Other-$5
and Corporate-$8.
(d) Second quarter 2014 included a charge
of $(58) recorded in other income,
net associated with remeasuring the
company's Venezuelan net monetary
assets from the official exchange
rate to the SICAD II exchange system.
(e) The company recorded insurance
recoveries of $210 in other operating
charges, in fourth quarter of 2014 in
the Agriculture segment, for recovery
of costs for customer claims related
to the use of the Imprelis(R)
herbicide. The company had accruals
of $261 related to these customer
claims and insurance receivables of
$35 at December 31, 2014. The company
has submitted and will continue to
submit requests for payment to its
insurance carriers for costs
associated with this matter. To date,
the company has recognized and
received $283 of insurance recoveries
from its insurance carriers and
continues to seek recovery although
the timing and outcome remain
uncertain.
Fourth, third, second and first
quarter 2013 included charges of
$(197), $(40), $(80) and $(35),
respectively, recorded in other
operating charges in the Agriculture
segment associated with resolving
claims related to the use of the
Imprelis(R) herbicide.
(f) First quarter 2013 included a net tax
benefit of $42 consisting of a $68
benefit for the 2013 extension of
certain U.S business tax provisions
offset by a $(26) charge related to
the global distribution of
Performance Coatings cash proceeds.
(g) Second quarter 2013 includes a charge
of $(11) in other income, net related
to interest on a prior year tax
position. Second quarter 2013 also
includes a charge of $(49) associated
with a change in accrual for a prior
year tax position offset by a $33
benefit for an enacted tax law
change.
(h) Third quarter 2013 included a charge
of $(72) recorded in other operating
charges related to the company's
settlement of titanium dioxide
antitrust litigation. This matter
relates to the Performance Chemicals
segment.
(i) Earnings per share for the year may
not equal the sum of quarterly
earnings per share due to the changes
in average share calculations.
E.I. du Pont de Nemours and Company
Consolidated Segment Information(Dollars in millions)
SCHEDULE C
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
SEGMENT SALES (1) 2014 2013 2014 2013
---------------- ---- ---- ---- ----
Agriculture $1,732 $1,806 $11,304 $11,739
Electronics &
Communications 573 642 2,393 2,549
Industrial Biosciences 322 326 1,258 1,224
Nutrition & Health 843 872 3,529 3,473
Performance Chemicals
(2) 1,564 1,671 6,497 6,932
Performance Materials
(2) 1,461 1,521 6,129 6,239
Safety & Protection 943 975 3,896 3,884
Other 1 1 5 6
Total Segment sales 7,439 7,814 35,011 36,046
Elimination of transfers (61) (67) (288) (312)
Consolidated net sales $7,378 $7,747 $34,723 $35,734
====== ====== ======= =======
(1) Segment sales include transfers.
(2) Prior periods reflect the reclassifications of the Viton(R) product line from Performance Materials to Performance
Chemicals.
E.I. du Pont de Nemours and Company
Consolidated Segment Information(Dollars in millions)
SCHEDULE C (continued)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
INCOME FROM CONTINUING OPERATIONS (GAAP) 2014 2013 2014 2013
--------------------------------------- ---- ---- ---- ----
Agriculture $492 $(108) $2,668 $2,132
Electronics & Communications 81 (38) 271 203
Industrial Biosciences 38 41 198 170
Nutrition & Health 75 87 365 305
Performance Chemicals (1) 226 228 913 941
Performance Materials (1) 262 278 1,590 1,264
Safety & Protection 188 213 742 694
Other (132) (91) (391) (340)
---- --- ---- ----
Total Segment PTOI 1,230 610 6,356 5,369
Corporate expenses (272) (183) (999) (765)
Interest expense (87) (108) (377) (448)
Non-operating pension/OPEB costs (30) (124) (124) (539)
Net exchange gains (losses) (2) 122 (73) 135 (128)
--- --- --- ----
Income before income taxes from continuing operations $963 $122 $4,991 $3,489
==== ==== ====== ======
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (3) 2014 2013 2014 2013
----------------------------------------- ---- ---- ---- ----
Agriculture $363 $(196) $316 $(351)
Electronics & Communications (16) (131) (84) (131)
Industrial Biosciences (11) 1 (13) 1
Nutrition & Health (7) 6 (15) 6
Performance Chemicals (1) (2) (2) (21) (74)
Performance Materials (1) (70) (16) 292 (16)
Safety & Protection (21) 4 (52) 4
Other (20) 5 (22) 5
--- --- --- ---
Total significant items by segment 216 (329) 401 (556)
Corporate expenses (128) 8 (297) (3)
Net exchange gains (losses) (2) - - (58) -
--- --- --- ---
Total significant items before income taxes $88 $(321) $46 $(559)
=== ===== === =====
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
OPERATING EARNINGS (NON-GAAP) 2014 2013 2014 2013
---------------------------- ---- ---- ---- ----
Agriculture $129 $88 $2,352 $2,483
Electronics & Communications 97 93 355 334
Industrial Biosciences 49 40 211 169
Nutrition & Health 82 81 380 299
Performance Chemicals (1) 228 230 934 1,015
Performance Materials (1) 332 294 1,298 1,280
Safety & Protection 209 209 794 690
Other (112) (96) (369) (345)
---- --- ---- ----
Total segment operating earnings 1,014 939 5,955 5,925
Corporate expenses (144) (191) (702) (762)
Interest expense (87) (108) (377) (448)
--- ---- ---- ----
Operating earnings before income taxes and exchange gains (losses) 783 640 4,876 4,715
Net exchange gains (losses) (2) 122 (73) 193 (128)
--- ----
Operating earnings before income taxes $905 $567 $5,069 $4,587
==== ==== ====== ======
(1) Prior periods reflect the reclassifications of the Viton(R) product line from Performance Materials to Performance Chemicals.
(2) See Schedule D for additional information on exchange gains and losses.
(3) See Schedule B for detail of significant items.
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D
Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Income from continuing operations before income taxes $963 $122 $4,991 $3,489
Add: Significant items before income taxes (88) 321 (46) 559
Add: Non-operating pension/OPEB costs 30 124 124 539
--- --- --- ---
Operating earnings before income taxes $905 $567 $5,069 $4,587
Less: Net income attributable to noncontrolling interests - - 11 14
Add: Interest expense 87 108 377 448
--- --- --- ---
Adjusted EBIT from operating earnings 992 675 5,435 5,021
Add: Depreciation and amortization 379 387 1,617 1,603
--- --- ----- -----
Adjusted EBITDA from operating earnings $1,371 $1,062 $7,052 $6,624
====== ====== ====== ======
Reconciliation of Operating Earnings Per Share (EPS) Outlook
The reconciliation below represents the company's outlook on an operating earnings basis, defined as earnings from continuing operations excluding significant items and non-operating pension/OPEB costs.
Year Ended December 31,
-----------------------
2015 Outlook 2014 Actual
------------ -----------
Operating EPS (Non-GAAP) $4.00-$4.20 $4.01
Significant items
-----------------
Separation transaction costs (0.30) (0.14)
Gain on sale of business 0.47
Restructuring charge (0.42)
Venezuela devaluation (0.06)
Tax items -
Customer claims recovery 0.14
Restructuring charge/adjustments -
Litigation settlement -
Asset impairment charge -
Non-operating pension/OPEB costs - estimate (0.21) (0.10)
EPS from continuing operations (GAAP) $3.49-$3.69 $3.90
----------- -----
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D (continued)
Exchange Gains/Losses on Operating Earnings(1)
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the
effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other income, net and the related tax impact is recorded in provision for (benefit from) income taxes on the Consolidated Income Statements.
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Subsidiary/Affiliate Monetary Position Gain (Loss)
--------------------------------------------------
Pre-tax exchange losses (includes equity affiliates) $(198) $(42) $(414) $(163)
Local tax (expenses) benefits (73) 22 (205) 54
--- --- ---- ---
Net after-tax impact from subsidiary exchange losses $(271) $(20) $(619) $(109)
===== ==== ===== =====
Hedging Program Gain (Loss)
--------------------------
Pre-tax exchange gains (losses) $320 $(31) $607 $35
Tax (expenses) benefits (112) 12 (212) (12)
---- --- ---- ---
Net after-tax impact from hedging program exchange gains (losses) $208 $(19) $395 $23
==== ==== ==== ===
Total Exchange Gain (Loss)
-------------------------
Pre-tax exchange gains (losses) $122 $(73) $193 $(128)
Tax (expenses) benefits (185) 34 (417) 42
---- --- ---- ---
Net after-tax exchange losses (2) $(63) $(39) $(224) $(86)
==== ==== ===== ====
As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary/Affiliate Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)."
(1) See Schedule B for detail of significant items.
(2) The above net after-tax exchange losses excludes losses attributable to discontinued operations of $(5) for the twelve months ended December 31, 2013.
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), as defined above, significant items and non-operating pension/OPEB costs.
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Income from continuing operations before income taxes $963 $122 $4,991 $3,489
Add: Significant items - (benefit) charge (1) (88) 321 (46) 559
Non-operating pension/OPEB costs 30 124 124 539
Less: Net exchange gains (losses) 122 (73) 193 (128)
--- --- --- ----
Income from continuing operations before income taxes, significant items,
exchange gains (losses), and non-operating pension/OPEB costs $783 $640 $4,876 $4,715
==== ==== ====== ======
Provision for (benefit from) income taxes on continuing operations $295 $(61) $1,370 $626
Add: Tax (expenses) benefits on significant items (49) 27 (55) 136
Tax benefits (expenses) on non-operating pension/OPEB costs 10 43 40 179
Tax (expenses) benefits on exchange gains/losses (185) 34 (417) 42
---- --- ---- ---
Provision for income taxes on operating earnings, excluding exchange gains (losses) $71 $43 $938 $983
=== === ==== ====
Effective income tax rate 30.6% (50.0)% 27.4% 17.9%
Significant items effect and non-operating pension/OPEB costs effect (2.3)% 51.6% (0.7)% 2.6%
----- ---- ----- ---
Tax rate, from continuing operations, before significant items and non-operating pension/OPEB costs 28.3% 1.6% 26.7% 20.5%
Exchange gains (losses) effect (19.2)% 5.1% (7.5)% 0.3%
------ --- ----- ---
Base income tax rate from continuing operations 9.1% 6.7% 19.2% 20.8%
=== === ==== ====
(1) See Schedule B for detail of significant items.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dupont-reports-4q-and-full-year-2014-operating-eps-of-071-and-401-4q-and-full-year-eps-in-line-with-company-expectations-despite-macroeconomic-headwinds-300025987.html
SOURCE DuPont
