E I DU PONT DE NEMOURS AND CO WILMINGTON, Del., Jan. 26, 2016 /PRNewswire/ --
Fourth-Quarter Highlights
-- Fourth-quarter operating earnings per share were $0.27, in line with
expectations, versus $0.57 in prior year. GAAP(1) (losses) earnings per
share were ($0.26) versus $0.63 in prior year.
-- Excluding currency, sales declined 1 percent. Currency negatively
impacted sales by an additional 8 percent.
-- Segment pre-tax operating earnings of $553 million included $170
million, or $0.17 per share, of negative impact from currency. Growth in
Industrial Biosciences and Nutrition & Health was more than offset by
declines in Agriculture, Performance Materials, Safety & Protection and
Electronics & Communications.
-- Cost reductions from operational redesign contributed an incremental
$0.10 per share to fourth-quarter operating earnings.
-- Actions underway for 2016 global cost savings and restructuring plan,
expected to reduce operating costs(2) by about $1.0 billion on run-rate
basis by end of 2016, which represents about $730 million in cost
reductions in 2016 versus prior year.
-- Completed $2 billion accelerated share repurchase program; announces
first quarter dividend of $0.38 per share.
Full-Year Highlights
-- Reported full-year operating earnings per share of $2.77 versus $3.36 in
prior year. Operating earnings, excluding negative currency impact of
$0.71 per share, increased 4 percent. GAAP(1) earnings per share were
$2.09 versus $3.39 in prior year.
-- Excluding currency and portfolio, sales declined 3 percent. Currency and
portfolio negatively impacted sales by an additional 7 percent and 2
percent, respectively.
-- Segment pre-tax operating earnings of $4.2 billion included
approximately $785 million of negative impact from currency. Operating
margins expanded in each segment, except Agriculture, on cost reductions
and productivity.
-- Cost reductions from 2014 operational redesign are essentially complete
and contributed an incremental $0.40 per share to full-year operating
earnings.
DuPont (NYSE: DD), a science company that brings world-class, innovative products, materials, and services to the global marketplace, today announced fourth-quarter 2015 operating earnings of $0.27 per share compared with $0.57 per share in the prior year. GAAP(1) (losses) earnings were ($0.26) per share, compared with $0.63 per share in the prior year. Refer to Schedule B for details of significant items.
For the full-year 2015, DuPont delivered operating earnings of $2.77 per share, compared with $3.36 per share in the prior year. GAAP(1) earnings were $2.09 per share, compared with $3.39 per share in the prior year.
Fourth-quarter sales were $5.3 billion, down 9 percent versus prior year due to negative impacts from currency (8 percent) and volume (1 percent). Full-year sales were $25.1 billion, down 12 percent versus prior year due to negative impacts from currency (7 percent), portfolio (2 percent) and volume (3 percent).
DuPont's board of directors approved a first-quarter dividend of 38 cents per share, the 446(th) consecutive quarterly dividend since the company's first dividend in the fourth quarter of 1904. The first-quarter dividend of 38 cents per share of common stock is payable on March 14, 2016, to stockholders of record at the close of business on Feb. 12, 2016. Regular quarterly dividends of $1.125 per share on the $4.50 series preferred stock and $0.875 cents per share on the $3.50 series preferred stock also were declared, both payable on April 25, 2016, to stockholders of record as of April 8, 2016.
On Dec. 11, 2015, DuPont and The Dow Chemical Company announced that their boards of directors unanimously approved a definitive agreement under which the companies will combine in an all-stock merger of equals. The combined company will be named DowDuPont. The merger is expected to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals, and approval by both Dow and DuPont shareholders. The parties intend to subsequently pursue a separation of DowDuPont into three independent, publicly traded companies through tax-free spin-offs. These separations would occur as soon as feasible, subject to regulatory and board approval.
"We are making progress on key initiatives, including further improving our cost structure and restructuring our organization to enhance our competitiveness," said Ed Breen, Chair and CEO of DuPont. "In this pivotal year for DuPont we have three priorities: deliver operating earnings growth while positioning our businesses to compete successfully over the long term; continue to improve our capital allocation and working capital performance; and complete the proposed merger of equals with Dow. Our merger process is on track. We are meeting key milestones and have begun our planning to create three strong, highly focused, independent businesses in agriculture, material science and specialty products."
Global Consolidated Net Sales - 4th Quarter and Full Year
---------------------------------------------------------
December 31, 2015 Percent Change Due to:
----------------- ----------------------
% Local Price and Portfolio /
$ Change
--- ------
Product Mix Currency Volume Other
----------- -------- ------ -----
(Dollars in millions)
U.S. & Canada $1,884 (4) (2) - (1) (1)
EMEA * 1,193 (16) (1) (12) (2) (1)
Asia Pacific 1,417 (5) (3) (4) - 2
Latin America 805 (18) 5 (23) - -
---
Total Consolidated Net Sales $5,299 (9) - (8) (1) -
* Europe, Middle East & Africa
Twelve Months Ended
December 31, 2015 Percent Change Due to:
----------------- ----------------------
% Local Price and Portfolio /
$ Change
--- ------
Product Mix Currency Volume Other
----------- -------- ------ -----
(Dollars in millions)
U.S. & Canada $10,755 (6) (2) (1) (2) (1)
EMEA * 6,043 (17) 2 (15) (2) (2)
Asia Pacific 5,617 (9) (2) (3) (2) (2)
Latin America 2,715 (23) 2 (15) (9) (1)
-----
Total Consolidated Net Sales $25,130 (12) - (7) (3) (2)
* Europe, Middle East & Africa
Segment Net Sales - 4th Quarter and Full Year
---------------------------------------------
Three Months Ended
December 31, 2015 Percent Change Due to:
----------------- ----------------------
Local Price and Portfolio /
$ % Change
--- --------
Product Mix Currency Volume Other
----------- -------- ------ -----
(Dollars in millions)
Agriculture $1,550 (11) 6 (16) - (1)
Electronics & Communications 493 (14) (4) (2) (8) -
Industrial Biosciences 301 (6) (1) (5) - -
Nutrition & Health 807 (4) - (8) 4 -
Performance Materials 1,284 (11) (6) (5) (1) 1
Safety & Protection 864 (8) (1) (3) (4) -
Other -
---
Consolidated Net Sales 5,299 (9) - (8) (1) -
Twelve Months Ended
December 31, 2015 Percent Change Due to:
----------------- ----------------------
Local Price and Portfolio /
$ % Change Product Mix Currency Volume Other
--- -------- ----------- -------- ------ -----
(Dollars in millions)
Agriculture $9,798 (13) 3 (9) (6) (1)
Electronics & Communications 2,070 (13) (4) (2) (7) -
Industrial Biosciences 1,171 (6) (3) (6) 3 -
Nutrition & Health 3,256 (8) - (9) 2 (1)
Performance Materials 5,305 (12) (4) (6) 1 (3)
Safety & Protection 3,527 (9) - (4) (1) (4)
Other 3
---
Consolidated Net Sales 25,130 (12) - (7) (3) (2)
Operating Earnings - 4th Quarter and Full Year
----------------------------------------------
Change vs. 2014
---------------
(Dollars in millions) 4Q15 4Q14 $ %
---- ---- --- ---
Agriculture $(54) $134 $(188) -140%
Electronics & Communications 87 92 (5) -5%
Industrial Biosciences 55 44 11 25%
Nutrition & Health 85 79 6 8%
Performance Materials 281 326 (45) -14%
Safety & Protection 182 205 (23) -11%
Other (83) (92) 9 10%
--- --- ---
Total segment operating earnings (1) 553 788 (235) -30%
Exchange gains (losses) (2) (24) 152 (176) nm
Corporate expenses (1) (160) (134) (26) 19%
Interest expense (82) (87) 5 -6%
--- --- ---
Operating earnings before income taxes 287 719 (432) -60%
Provision for income taxes on operating earnings (51) (200) 149
Less: Net (loss) attributable to noncontrolling interests (3) - (3)
Operating earnings $239 $519 $(280) -54%
==== ==== =====
Operating earnings per share $0.27 $0.57 $(0.30) -53%
===== ===== ======
Change vs. 2014
---------------
(Dollars in millions) YTD 2015 YTD 2014 $ %
-------- -------- --- ---
Agriculture $1,646 $2,352 $(706) -30%
Electronics &
Communications 359 336 23 7%
Industrial Biosciences 203 192 11 6%
Nutrition & Health 373 369 4 1%
Performance Materials 1,216 1,267 (51) -4%
Safety & Protection 704 772 (68) -9%
Other (258) (256) (2) -1%
---- ---- ---
Total segment operating
earnings (1) 4,243 5,032 (789) -16%
Exchange gains (losses)
(1), (2) 93 254 (161) nm
Corporate expenses (1) (573) (677) 104 -15%
Interest expense(1) (322) (377) 55 -15%
---- ---- ---
Operating earnings
before income taxes 3,441 4,232 (791) -19%
Provision for income
taxes on operating
earnings (932) (1,112) 180
Less: Net income
attributable to
noncontrolling
interests 6 10 (4)
Operating earnings $2,503 $3,110 $(607) -20%
====== ====== =====
Operating earnings per
share $2.77 $3.36 $(0.59) -18%
===== ===== ======
(1) See Schedules B and C for listing of significant items and their impact by segment.
(2) 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.
Agriculture - An operating loss of $54 million resulted in $188 million lower operating earnings as increases in local price and cost reductions and continued productivity improvements were more than offset by a $139 million negative currency impact and about a $30 million negative impact from the continued shutdown of the LaPorte manufacturing facility. Prior year results benefitted from a timing impact from performance-based compensation adjustments and $36 million in gains from portfolio actions. Excluding the impact of currency, the segment would have reported operating earnings of $85 million.
Electronics & Communications - Operating earnings of $87 million decreased $5 million, or 5 percent, as cost reductions and continued productivity improvements were more than offset by competitive pressures impacting Solamet® paste. Excluding the impact of currency, operating earnings would have decreased by about 10 percent.
Industrial Biosciences - Operating earnings of $55 million increased $11 million, or 25 percent, as benefits from cost reductions and continued productivity improvements were partially offset by a $2 million negative impact from currency and slightly lower pricing. Operating margins improved 450 basis points. Excluding the impact of currency, operating earnings would have increased 30 percent.
Nutrition & Health - Operating earnings of $85 million increased $6 million, or 8 percent, as cost reductions, continued productivity improvements and broad-based volume growth led by probiotics, cultures, and ingredient systems, more than offset the absence of an $18 million gain on termination of a distribution agreement in the prior year and a $12 million negative currency impact. Excluding the impact of currency, operating earnings would have increased by about 23 percent.
Performance Materials - Operating earnings of $281 million decreased $45 million, or 14 percent. Cost reductions, continued productivity improvements and increased demand for Performance Polymers in global automotive markets, were more than offset by lower ethylene price and volume and $19 million of negative currency impact. Operating earnings included a $33 million benefit from the sale of a business and tax benefits associated with a manufacturing site. Excluding the impact of currency, operating earnings would have decreased by about 8 percent.
Safety & Protection - Operating earnings of $182 million decreased $23 million, or 11 percent. Cost reductions and productivity improvements were more than offset by lower demand and a $2 million negative currency impact. Volume declines in Nomex® thermal-resistant fiber, Kevlar® high-strength material and Sustainable Solutions offerings were driven by weakness in the oil and gas industry and in military spending. Excluding the impact of currency, operating earnings would have decreased by about 10 percent.
2016 Outlook
Current difficult global economic conditions in agriculture and slower growth in emerging markets are expected to continue, challenging the company's sales growth in 2016. The company expects 2016 operating earnings of $2.95 to $3.10 per share, including an expected benefit of $0.64 per share from the 2016 global cost savings and restructuring plan. The increase in the expected benefit results from identification of additional savings that will be delivered from the existing plans, including previously announced employee reduction estimates. The benefit from the 2016 global cost savings and restructuring plan will be weighted toward the second half of 2016 as specific actions continue to be implemented in the first and second quarters. 2016 operating earnings also includes approximately $0.30 per share of estimated negative currency impact due to the continued strengthening of the U.S. dollar, pressuring both the top and bottom line. A higher base tax rate, reflecting the expected geographic mix of earnings, is expected to negatively impact operating earnings by $0.05 - $0.10 per share. The currency impact is expected to be most significant in the first half of the year due to a further weakening of the U.S dollar. Given the seasonality of the company's operating earnings from Agriculture in the northern hemisphere, the company anticipates approximately two-thirds of the expected currency impact to occur in the first half of 2016. Excluding the impact of currency, the guidance for full-year operating earnings per share, including expected benefits from cost savings and share repurchases, represents a 17-23 percent increase year over year.
DuPont will hold a conference call and webcast on Tuesday, Jan. 26, 2016, at 8:00 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 9594983#. 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.
About DuPont
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.
Forward-Looking Statements: This document 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 strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, and timing of, as well as expected benefits, including synergies, from proposed merger with The Dow Chemical Company and intended post-merger separations, 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; ability to respond to market acceptance, rules, regulations and policies affecting products based on biotechnology and, in general, for products for the agriculture industry; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; 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, natural disasters and weather events and patterns which could affect demand as well as availability of products for the agriculture industry; 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 risks related to the agreement entered on December 11, 2015, with The Dow Chemical Company pursuant to which the companies have agreed to effect an all-stock merger of equals, including the completion of the proposed transaction on anticipated terms and timing, the ability to fully and timely realize the expected benefits of the proposed transaction and risks related to the intended business separations contemplated to occur after the completion of the proposed transaction. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
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,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Net sales $5,299 $5,849 $25,130 $28,406
Cost of goods sold 3,409 3,673 15,112 17,023
Other operating charges (1) 46 36 459 645
Selling, general and administrative expenses (1) 1,075 1,058 4,615 4,891
Research and development expense 483 467 1,898 1,958
Other income, net (1) (145) (528) (697) (1,277)
Interest expense (1) 82 87 342 377
Employee separation / asset related charges, net (1) 770 232 810 476
--- --- --- ---
(Loss) Income from continuing operations before income taxes (421) 824 2,591 4,313
(Benefit from) Provision for income taxes on continuing operations (1) (190) 247 696 1,168
---- --- --- -----
(Loss) Income from continuing operations after income taxes (231) 577 1,895 3,145
(Loss) Income from discontinued operations after income taxes (25) 106 64 491
Net (loss) income (256) 683 1,959 3,636
Less: Net (loss) income attributable to noncontrolling interests (3) - 6 11
--- --- --- ---
Net (loss) income attributable to DuPont $(253) $683 $1,953 $3,625
===== ==== ====== ======
Basic (loss) earnings per share of common stock:
Basic (loss) earnings per share of common stock from continuing operations $(0.26) $0.63 $2.10 $3.42
Basic (loss) earnings per share of common stock from discontinued operations (0.03) 0.12 0.07 0.54
Basic (loss) earnings per share of common stock $(0.29) $0.75 $2.17 $3.95
Diluted (loss) earnings per share of common stock:
Diluted (loss) earnings per share of common stock from continuing operations $(0.26) $0.63 $2.09 $3.39
Diluted (loss) earnings per share of common stock from discontinued operations (0.03) 0.12 0.07 0.53
Diluted (loss) earnings per share of common stock (2) $(0.29) $0.74 $2.16 $3.92
Dividends per share of common stock $0.38 $0.47 $1.72 $1.84
===== ===== ===== =====
Average number of shares outstanding used in earnings (loss) per share (EPS) calculation:
Basic 876,500,000 906,339,000 893,992,000 914,752,000
Diluted 881,727,000 913,650,000 899,527,000 921,873,000
Reconciliation of Non-GAAP Measures
-----------------------------------
Summary of Earnings Comparison
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2015 2014 % Change 2015 2014 % Change
---- ---- -------- ---- ---- --------
(Loss) Income from continuing operations after income taxes (GAAP) $(231) $577 (140)% $1,895 $3,145 (40)%
Less: Significant items (charge) benefit included in income from continuing operations after income taxes (per Schedule B) (411) 79 (348) 112
Non-operating pension/OPEB costs included in income from continuing operations after income taxes (3) (56) (21) (266) (87)
Net (loss) income attributable to noncontrolling interest from continuing operations (3) - 6 10
---
Operating earnings (Non-GAAP) $239 $519 (54)% $2,503 $3,110 (20)%
==== ==== ====== ======
(Loss) Earnings per share from continuing operations (GAAP) $(0.26) $0.63 (141)% $2.09 $3.39 (38)%
Less: Significant items (charge) benefit included in EPS (per Schedule B) (0.47) 0.09 (0.39) 0.12
Non-operating pension/OPEB costs included in EPS (3) (0.06) (0.03) (0.29) (0.09)
----- -----
Operating EPS (Non-GAAP) $0.27 $0.57 (53)% $2.77 $3.36 (18)%
===== ===== ===== =====
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,
2015 2014
---- ----
Assets
Current assets
Cash and cash equivalents $5,300 $6,910
Marketable securities 906 124
Accounts and notes
receivable, net 4,643 5,238
Inventories 6,140 6,787
Prepaid expenses 248 264
Deferred income taxes 518 532
Assets of discontinued
operations - 6,227
Total current assets 17,755 26,082
Property, plant and
equipment, net of
accumulated depreciation 9,784 10,008
(December 31, 2015 -
$14,346; December 31,
2014 -$13,765)
Goodwill 4,248 4,332
Other intangible assets 4,144 4,569
Investment in affiliates 688 762
Deferred income taxes 3,431 3,734
Other assets 1,116 1,003
----- -----
Total $41,166 $50,490
======= =======
Liabilities and Equity
Current liabilities
Accounts payable $3,398 $3,786
Short-term borrowings
and capital lease
obligations 1,165 1,422
Income taxes 210 534
Other accrued liabilities 5,580 5,596
Liabilities of
discontinued operations - 2,467
--- -----
Total current liabilities 10,353 13,805
Long-term borrowings and
capital lease
obligations 7,642 9,233
Other liabilities 12,591 13,615
Deferred income taxes 380 459
--- ---
Total liabilities 30,966 37,112
------ ------
Commitments and
contingent liabilities
Stockholders' equity
Preferred stock 237 237
Common stock, $0.30 par
value; 1,800,000,000
shares authorized; 288 298
Issued at December 31,
2015 -958,388,000;
December 31, 2014 -
992,020,000
Additional paid-in
capital 11,081 11,174
Reinvested earnings 14,510 16,894
Accumulated other
comprehensive loss (9,396) (8,556)
Common stock held in
treasury, at cost
(87,041,000 shares at
December 31, 2015 and
December 31, 2014) (6,727) (6,727)
------ ------
Total DuPont
stockholders' equity 9,993 13,320
----- ------
Noncontrolling interests 207 58
--- ---
Total equity 10,200 13,378
Total $41,166 $50,490
======= =======
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,
------------
2015 2014
---- ----
Total Company
Net income $1,959 $3,636
Adjustments to reconcile net income to
cash used for operating activities:
Depreciation 1,104 1,254
Amortization of
intangible assets 362 363
Net periodic pension
benefit cost 591 406
Contributions to
pension plans (308) (311)
Gain on sale of
businesses (59) (726)
Other operating
activities -net 253 366
Change in operating
assets and
liabilities -net (1,586) (1,276)
------ ------
Cash provided by
operating activities 2,316 3,712
Investing activities
Purchases of property,
plant and equipment (1,629) (2,020)
Investments in
affiliates (76) (42)
Payments for
businesses -net of
cash acquired (152) -
Proceeds from sales of
businesses -net 139 1,058
Proceeds from sales of
assets -net 17 34
Net (increase)
decrease in short-
term financial
instruments (776) 14
Foreign currency
exchange contract
settlements 615 430
Other investing
activities -net 34 189
--- ---
Cash used for
investing activities (1,828) (337)
Financing activities
Dividends paid to
stockholders (1,546) (1,696)
Net increase
(decrease) in
borrowings 2,141 (1,701)
Prepayments /
repurchase of common
stock (2,353) (2,000)
Proceeds from exercise
of stock options 274 327
Payment for
noncontrolling
interests (1) -
Cash transferred to
Chemours at spin-off (250) -
Other financing
activities -net (88) (4)
--- ---
Cash used for
financing activities (1,823) (5,074)
Effect of exchange
rate changes on cash (275) (332)
---- ----
Decrease in cash and
cash equivalents (1,610) (2,031)
Cash and cash
equivalents at
beginning of period 6,910 8,941
----- -----
Cash and cash
equivalents at end of
period $5,300 $6,910
====== ======
Reconciliation of Non-GAAP Measure
----------------------------------
Calculation of Free Cash Flow
Twelve Months Ended
December 31,
------------
2015 2014
---- ----
Cash provided by
operating activities $2,316 $3,712
Purchases of property,
plant and equipment (1,629) (2,020)
------
Free cash flow $687 $1,692
==== ======
(1) See Schedule B for detail of significant items.
(2) The sum of the individual earnings per share amounts from continuing operations and discontinued
operations may not equal the total company earnings per share amounts due to rounding.
(3) Year to date December 31, 2015 includes a $23 after-tax exchange loss on foreign pension balances.
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)
SCHEDULE B
SIGNIFICANT ITEMS
Pre-tax After-tax ($ Per Share)
------- --------- ------------
2015 2014 2015 2014 2015 2014
---- ---- ---- ---- ---- ----
1st Quarter
-----------
Separation transaction costs (1) $(12) $(3) $(11) $(2) $(0.01) $ -
Customer claims recovery (4) 35 - 22 - 0.02 -
Asset impairment charge (5) (37) - (30) - (0.03) -
Ukraine devaluation (6) (40) - (38) - (0.04) -
1st Quarter - Total $(54) $(3) $(57) $(2) $(0.06) $ -
==== === ==== === ====== === ===
2nd Quarter
-----------
Separation transaction costs (1) $(25) $(4) $(38) $(4) $(0.04) $(0.01)
Restructuring charges, net (2) (2) (244) (2) (168) - (0.18)
Litigation settlement (3) 112 - 72 - 0.08 -
Venezuela devaluation(7) - (58) - (57) - (0.06)
Gain on sale of business (8) - 391 - 273 - 0.30
2nd Quarter - Total $85 $85 $32 $44 $0.04 $0.05
=== === === === ===== =====
3rd Quarter
-----------
Separation transaction costs (1) $(9) $(10) $(6) $(9) $(0.01) $(0.01)
Customer claims recovery (4) 147 - 94 - 0.11 -
3rd Quarter - Total $138 $(10) $88 $(9) $0.10 $(0.01)
==== ==== === === ===== ======
4th Quarter
-----------
Merger related costs(9) $(10) - $(7) - $(0.01) -
Separation transaction costs (1) $ - $(16) $ - $(10) $ - $(0.01)
Restructuring charges, net (2) $(775) (297) $(508) (199) $(0.58) (0.21)
Litigation settlement (3) $33 - $21 - $0.02 -
Customer claims adjustment/
recovery (4) $130 210 $83 134 $0.10 0.14
Gain on sale of business (8) $ - 240 $ - 154 $ - 0.17
4th Quarter - Total $(622) $137 $(411) $79 $(0.47) $0.09
===== ==== ===== === ====== =====
Year-to-date Total(10) $(453) $209 $(348) $112 $(0.39) $0.12
===== ==== ===== ==== ====== =====
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)
(1) Third quarter and first quarter 2015
included charges of $(9) and $(12),
respectively, recorded in other operating
charges associated with transaction costs
related to the separation of the
Performance Chemicals segment. Second
quarter 2015 included charges of $(25)
associated with transaction costs related
to the separation of the Performance
Chemicals segment consisting of $(5)
recorded in other operating charges and
$(20) recorded in interest expense. Second
quarter 2015 also includes a tax charge of
$(17) due to a state tax rate change
associated with the separation.
Fourth, third, second and first quarter 2014
included charges of $(16), $(10), $(4) and
$(3), respectively, recorded in other
operating charges associated with
transaction costs related to the separation
of the Performance Chemicals segment.
(2) Fourth quarter 2015 included a $(798)
restructuring charge consisting of $(793)
recorded in employee separation/asset
related charges, net and $(5) recorded in
other income, net associated with
structural actions across all businesses
and staff functions globally to operate
more efficiently by further consolidating
businesses and aligning staff functions
more closely with them. The charge included
$(656) of severance and related benefit
costs, $(109) of asset related charges, and
$(33) of contract termination costs. Pre-
tax charges by segment are: Agriculture -
$(161), Electronics & Communications -
$(93), Industrial Biosciences - $(51),
Nutrition & Health - $(47), Performance
Materials - $(61), Safety & Protection -
$(53), Other - $(2), and Corporate
expenses - $(330).
Fourth and Second quarter 2015 included a
$23 and $(2) restructuring benefit (charge)
recorded in employee separation/asset
related charges, net, respectively,
associated with the 2014 restructuring
program. These adjustments were primarily
due to the identification of additional
projects in certain segments, offset by
lower than estimated individual severance
costs and workforce reductions achieved
through non-severance programs. The net
reduction impacted segment earnings as
follows: Agriculture - $(3), Electronics &
Communications - $15, Industrial
Biosciences - $(1), Nutrition & Health -
$(3), Performance Materials - $(1), Safety
& Protection $4, Other - $(1), and
Corporate expenses - $11.
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 and second quarter 2014 included
$(297) and $(244) restructuring charges,
respectively. The charges include $(301)
of severance and related benefit costs,
$(17) of other non-personnel charges, and
$(223) of asset related charges, including
$(65) of charges associated with the
restructuring actions of a joint venture.
The fourth quarter charge consisted of
$(232) recorded in employee separation/
asset related charges, net, and $(65)
recorded in other income, net. The second
quarter charge was recored to employee
separation/asset related charges, net.
Fourth quarter 2014 pre-tax charges by
segment were: Agriculture - $(87),
Electronics & Communications - $(16),
Industrial Biosciences - $(11), Nutrition
& Health - $(7), Performance Materials -
$(70), Safety & Protection - $(21), Other
- $(8), and Corporate expenses - $(77).
Second quarter pre-tax charges by segment
are: Agriculture - $(47), Electronics &
Communications - $(68), Industrial
Biosciences - $(2), Nutrition & Health -
$(8), Performance Materials - $(29),
Safety & Protection - $(31), Other -
$(2), and Corporate expenses - $(57).
(3) Fourth quarter and second quarter 2015
included gains of $33 and $112,
respectively, net of legal expenses,
recorded in other income, net related to
the company's settlement of a legal claim.
This matter relates to the Safety &
Protection segment.
(4) Fourth quarter 2015 included a benefit of
$130 in other operating charges for
reduction in accrual for customer claims
related to the use of the Agriculture
segment's Imprelis(R) herbicide. At
December 31, 2015, the company had an
accrual balance of $41 which represents the
company's best estimate associated with
resolving the remaining claims for this
matter.
The company recorded net insurance
recoveries of $147 and $35 in other
operating charges in the third and first
quarter 2015, respectively, and $210 in the
fourth quarter of 2014 for recovery of
costs for customer claims related to the
use of the Imprelis(R) herbicide.
(5) During first quarter of 2015, a $(37) pre-
tax impairment charge was recorded in
employee separation /asset related
charges, net for a cost basis investment
within the Other segment. The assessment
resulted from the venture's revised
operating plan reflecting underperformance
of its European wheat based ethanol
facility and deteriorating European ethanol
market conditions. One of the primary
investors has communicated they would not
fund the revised operating plan of the
investee. As a result, the carrying value
of our 6% equity investment in this venture
exceeds its fair value.
(6) First quarter 2015 included a charge of
$(40) in other income, net associated with
remeasuring the company's Ukrainian hryvnia
net monetary assets. Ukraine's central bank
adopted a decision to no longer set the
indicative hryvnia exchange rate. The
hryvnia became a free-floating exchange
rate and lost approximately a third of its
value through the quarter.
(7) 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.
(8) 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.
(9) Fourth quarter 2015 included charges of
$(10) recorded in selling, general and
administrative expenses related to
transaction costs associated with the
planned merger with the Dow Chemical
Company announced on December 11, 2015.
(10) 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 NET SALES 2015 2014 2015 2014
----------------- ---- ---- ---- ----
Agriculture $1,550 $1,732 $9,798 $11,296
Electronics & Communications 493 571 2,070 2,381
Industrial Biosciences 301 319 1,171 1,244
Nutrition & Health 807 843 3,256 3,529
Performance Materials 1,284 1,441 5,305 6,059
Safety & Protection 864 942 3,527 3,892
Other - 1 3 5
--- ---
Consolidated net sales $5,299 $5,849 $25,130 $28,406
====== ====== ======= =======
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
SEGMENT OPERATING EARNINGS 2015 2014 2015 2014
-------------------------- ---- ---- ---- ----
Agriculture $(54) $134 $1,646 $2,352
Electronics & Communications 87 92 359 336
Industrial Biosciences 55 44 203 192
Nutrition & Health 85 79 373 369
Performance Materials 281 326 1,216 1,267
Safety & Protection 182 205 704 772
Other (83) (92) (258) (256)
--- --- ---- ----
Total segment operating earnings 553 788 4,243 5,032
Corporate expenses (160) (134) (573) (677)
Interest expense (82) (87) (322) (377)
--- --- ---- ----
Operating earnings before income taxes and exchange
gains (losses) 311 567 3,348 3,978
Net exchange gains (losses) (1) (24) 152 93 254
--- --- ---
Operating earnings before income taxes (Non-GAAP) $287 $719 $3,441 $4,232
Non-operating pension/OPEB costs (86) (32) (397) (128)
Total significant items before income taxes (622) 137 (453) 209
(Loss) Income from continuing operations before
income taxes $(421) $824 $2,591 $4,313
===== ==== ====== ======
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2) 2015 2014 2015 2014
----------------------------------------- ---- ---- ---- ----
Agriculture $(30) $363 $148 $316
Electronics & Communications (89) (16) (78) (84)
Industrial Biosciences (51) (11) (52) (13)
Nutrition & Health (46) (7) (50) (15)
Performance Materials (60) (70) (62) 292
Safety & Protection (17) (21) 96 (52)
Other - (8) (40) (10)
--- --- --- ---
Total significant items by segment (293) 230 (38) 434
Corporate expenses (329) (93) (355) (167)
Interest expense - - (20) -
Net exchange gains (losses) - - (40) (58)
--- --- --- ---
Total significant items before income taxes $(622) $137 $(453) $209
===== ==== ===== ====
E.I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C (continued)
Reconciliation of Segment Operating Earnings excluding the impact of currency (Non-GAAP)
---------------------------------------------------------------------------------------
Segment operating earnings excluding the impact of currency assumes current operating earnings results using foreign currency exchange rates in effect for the comparable prior-year period.
Three Months
Ended Three Months Ended
December 31,
2014 December 31, 2015
Segment Segment Impact of Segment
Operating Operating Currency Operating
Earnings Earnings Earnings
Excluding
Currency % Change
---------- ---------- --------- --------- --------
Agriculture $134 $(54) $(139) $85 (37)%
Electronics & Communications 92 87 4 83 (10)
Industrial Biosciences 44 55 (2) 57 30
Nutrition & Health 79 85 (12) 97 23
Performance Materials 326 281 (19) 300 (8)
Safety & Protection 205 182 (2) 184 (10)
Other (92) (83) - (83) 10
--- --- ---
Total segment operating earnings $788 $553 $(170) $723 (8)%
==== ==== ===== ==== ===
(1) See Schedule D for additional information on exchange gains and losses. Year to date December 31, 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes the impact of a $23 exchange loss on non-operating pension.
(2) 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,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Loss) Income from continuing operations before income taxes $(421) $824 $2,591 $4,313
Add: Significant items charge (benefit) before income taxes 622 (137) 453 (209)
Add: Non-operating pension/OPEB costs (1) 86 32 397 128
--- --- --- ---
Operating earnings before income taxes $287 $719 $3,441 $4,232
Less: Net (loss) income attributable to noncontrolling interests from continuing
operations (3) - 6 10
Add: Interest expense 82 87 322 377
--- --- --- ---
Adjusted EBIT from operating earnings 372 806 3,757 4,599
Add: Depreciation and amortization 303 316 1,338 1,366
--- --- ----- -----
Adjusted EBITDA from operating earnings $675 $1,122 $5,095 $5,965
==== ====== ====== ======
Reconciliation of Operating Earnings Per Share (EPS) Outlook
The reconciliation below represents the company's outlook on an operating earnings basis, defined as income from continuing operations excluding significant items and non-operating pension/OPEB costs. The 2016 Operating EPS excludes merger related costs.
Year Ended December 31,
-----------------------
2016 Outlook 2015 Actual
------------ -----------
Operating EPS (Non-GAAP) $ 2.95 - 3.10 $2.77
Significant items
-----------------
Separation transaction costs - (0.06)
Merger related costs - (0.01)
Gain on sale of business - -
Restructuring charge, net - (0.58)
Venezuela devaluation - -
Customer claims recovery - 0.23
Litigation settlement - 0.10
Asset impairment charge - (0.03)
Ukraine devaluation - (0.04)
Non-operating pension/OPEB costs - estimate(2) (0.15) (0.29)
EPS from continuing operations (GAAP) $ 2.80 - 2.95 $2.09
-------------- -----
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 (3)
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,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Subsidiary Monetary Position Gain (Loss)
---------------------------------------
Pre-tax exchange losses $(23) $(168) $(320) $(353)
Local tax expenses (44) (75) (70) (208)
--- --- --- ----
Net after-tax impact from subsidiary exchange losses $(67) $(243) $(390) $(561)
==== ===== ===== =====
Hedging Program Gain (Loss)
--------------------------
Pre-tax exchange (losses) gains $(1) $320 $413 $607
Tax expenses - (112) (150) (212)
--- ---- ---- ----
Net after-tax impact from hedging program exchange (losses) gains $(1) $208 $263 $395
=== ==== ==== ====
Total Exchange Gain (Loss)
-------------------------
Pre-tax exchange (losses) gains (4) $(24) $152 $93 $254
Tax expenses (44) (187) (220) (420)
--- ---- ---- ----
Net after-tax exchange losses $(68) $(35) $(127) $(166)
==== ==== ===== =====
As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)."
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,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Loss) Income from continuing operations before income taxes $(421) $824 $2,591 $4,313
Add: Significant items - charge (benefit) (3) 622 (137) 453 (209)
Non-operating pension/OPEB costs (1) 86 32 397 128
Less: Net exchange (losses) gains (4) (24) 152 93 254
--- --- --- ---
Income from continuing operations before income taxes, significant items, $311 $567 $3,348 $3,978
exchange gains (losses), and non-operating pension/OPEB costs
(Benefit) Provision for income taxes on continuing operations $(190) $247 $696 $1,168
Add: Tax benefits (expenses) on significant items 211 (58) 105 (97)
Tax benefits on non-operating pension/OPEB costs 30 11 131 41
Tax expenses on exchange gains/losses (44) (187) (220) (420)
--- ---- ---- ----
Provision for income taxes on continuing earnings, excluding exchange gains (losses) $7 $13 $712 $692
=== === ==== ====
Effective income tax rate 45.1% 30.0% 26.9% 27.1%
Significant items effect and non-operating pension/OPEB costs effect (27.3)% (2.2)% 0.2% (0.8)%
------ ----- --- -----
Tax rate, from continuing operations before significant items and non-operating pension/OPEB costs 17.8% 27.8% 27.1% 26.3%
Exchange gains (losses) effect (15.5)% (25.5)% (5.8)% (8.9)%
------ ------ ----- -----
Base income tax rate from continuing operations 2.3% 2.3% 21.3% 17.4%
=== === ==== ====
(1) Year to date December 31, 2015, non-operating pension/OPEB costs includes a $23 exchange loss on foreign pension balances.
(2) The 2016 estimate for non-operating pension/OPEB costs does not include expected settlement losses and curtailment gains as a result of actions associated with the 2016 global cost savings and restructuring plan.
.
(3) See Schedule B for detail of significant items.
(4) Year to date December 31, 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes a $23 exchange loss on non-operating pension.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dupont-reports-4q-and-full-year-operating-eps-of-027-and-277-300209515.html
SOURCE DuPont
