DuPont Reports Third Quarter 2022 Results

November 08, 2022

Announces Approval of $5.0 Billion Share Repurchase Authorization

Third Quarter 2022 Highlights

  • 3Q Net Sales of $3.3 billion increased 4%; organic sales increased 11% versus year-ago period
  • 3Q GAAP Income from continuing operations of $359 million; operating EBITDA of $856 million increased 5% versus year-ago period
  • Operating EBITDA margin increased 30 basis points year-over-year
  • 3Q GAAP EPS from continuing operations of $0.69; adjusted EPS of $0.82 increased 4% versus year-ago period; higher tax rate was a $0.05 headwind versus previously issued guidance
  • ~$415 million of capital returned to shareholders through share repurchases and dividends

Transaction and Capital Allocation Updates

  • M&M Divestiture to Celanese closed on November 1 with gross cash received of $11.0 billion
  • Rogers Corporation transaction terminated on November 1 due to lack of receipt of regulatory clearance
  • Announces Board approval of new $5.0 billion share repurchase program with intended $3.25 billion accelerated share repurchase program to be executed imminently
  • Announces intent to retire $2.5 billion of Senior Notes due in November 2023 as part of balanced capital allocation framework

WILMINGTON, Del., Nov. 8, 2022 /PRNewswire/ -- DuPont (NYSE: DD) today announced financial results(1) for the third quarter of 2022.

"Despite a continued challenging macro environment marked by substantial cost inflation, we delivered better than expected top-line and bottom-line financial performance through disciplined operational execution including necessary targeted pricing actions," said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. "Underlying demand during the quarter remained strong in most of our key end-markets notably semiconductor, water and general industrial. Looking ahead, we remain focused on solid execution and operating discipline to maintain strong financial performance in a global environment facing continued uncertainties."

"Last week's closing of the M&M divestiture to Celanese was a milestone event for DuPont, advancing our strategy to concentrate the Company's portfolio in more stable, higher-growth and higher-margin businesses," Breen continued. "With the M&M sale now complete, we are returning substantial excess capital to shareholders while also further strengthening our balance sheet to maintain financial flexibility. Our announcement today of a new $5.0 billion share repurchase program and our intent to retire $2.5 billion in long-term debt highlight our commitment to a balanced capital allocation approach focused on shareholder value creation."

Third Quarter 2022 Results (1)  


Dollars in millions, unless noted

3Q'22

3Q'21

Change

vs. 3Q'21

Organic Sales (2)

vs. 3Q'21

Net sales

$3,317

$3,199

4 %

11 %

GAAP Income from continuing operations

$359

$259

39 %


Operating EBITDA(2)

$856

$817

5 %


Operating EBITDA(2) margin %

25.8 %

25.5 %

30 bps


GAAP EPS from continuing operations

$0.69

$0.48

44 %


Adjusted EPS(2)

$0.82

$0.79

4 %


Net sales

  • Net sales increased 4% on organic sales(2) growth of 11%; currency and portfolio resulted in headwinds of 4% and 3%, respectively.
  • Organic sales(2) growth of 11% consisted of an 8% increase in price and a 3% increase in volume.
    • Price increase reflects actions taken to offset continued broad-based cost inflation.
    • Volume increase reflects continued strong demand in semiconductor, water and industrial end-markets, muted primarily by lower volumes from protective garments within Safety Solutions and softness in smartphones and personal computing globally within Interconnect Solutions.
  • 15% organic sales(2) growth in Water & Protection; 7% organic sales(2) growth in Electronics & Industrial; 25% organic sales(2) growth in retained businesses reported in Corporate & Other, which predominantly consists of the auto adhesives portfolio.
  • Organic sales(2) growth in all regions globally, including 19% in U.S. & Canada, 7% in Asia Pacific and 6% in EMEA.

GAAP Income/GAAP EPS from continuing operations

  • GAAP income/GAAP EPS from continuing operations increased due primarily to a one-time credit related to the CARES Act which is reflected as a significant item, higher segment earnings and lower integration costs partially offset by a higher tax rate.

Operating EBITDA(2)

  • Operating EBITDA(2) increased on volume gains as pricing actions were offset by higher input costs resulting from inflation.

Adjusted EPS(2)

  • Adjusted EPS increased due to higher segment earnings and a lower share count partially offset by a higher tax rate.

Operating cash flow

  • Operating cash flow in the quarter of $419 million, capital expenditures of $172 million and an adjustment of $115 million for a tax prepayment related to the M&M Divestiture resulted in free cash flow(2) of $362 million. Free cash flow conversion(2) during the quarter was 73%.

Third Quarter 2022 Segment Highlights 


Electronics & Industrial 


Dollars in millions, unless noted

3Q'22

3Q'21

Change

vs. 3Q'21

Organic Sales(2)

vs. 3Q'21

Net sales

$1,511

$1,467

3 %

7 %

Operating EBITDA

$473

$475

- %


Operating EBITDA margin %

31.3 %

32.4 %

(110) bps


Net sales

  • Net sales increased 3% as organic sales(2) growth of 7% was partially offset by a 4% currency headwind.
  • Organic sales(2) growth of 7% driven by a 4% increase in volume and a 3% increase in price.
    • Semiconductor Technologies sales up mid-teens on an organic(2) basis as strong demand continued, led by the on-going transition to more advanced node technologies and strong fab utilization, along with growth in 5G communications and data centers.
    • Industrial Solutions sales up high single-digits on an organic(2) basis, reflecting ongoing demand strength for Kalrez® and Vespel® products, OLED materials and for applications in healthcare markets such as biopharma tubing.
    • Interconnect Solutions sales down mid single-digits on an organic(2) basis due to volume declines. Softness in smartphones and personal computing globally more than offset strong demand for Kapton® film in industrial end-markets and for applications requiring electromagnetic shielding and thermal management.

Operating EBITDA

  • Operating EBITDA was relatively flat as volume gains in Semiconductor Technologies and Industrial Solutions were offset by lower volumes and weaker product mix in Interconnect Solutions, as well as lower equity earnings.

Water & Protection 


Dollars in millions, unless noted

3Q'22

3Q'21

Change

vs. 3Q'21

Organic Sales(2)

vs. 3Q'21

Net sales

$1,534

$1,397

10 %

15 %

Operating EBITDA

382

353

8 %


Operating EBITDA margin %

24.9 %

25.3 %

(40) bps


Net sales

  • Net sales increased 10% as organic sales(2) growth of 15% was partially offset by a 5% currency headwind.
  • Organic sales(2) growth of 15% reflects a 13% increase in price and a 2% increase in volume. The increase in price reflects broad-based actions taken across the segment to offset continued cost inflation.
    • Shelter Solutions sales up high-teens on an organic(2) basis driven by pricing gains, coupled with continued demand strength in North America commercial construction.
    • Water Solutions sales up mid-teens on an organic(2) basis on strong global demand across all water technologies, as well as pricing gains.
    • Safety Solutions sales up low double-digits on an organic(2) basis as pricing actions were slightly offset by lower volumes driven by Tyvek® garments.

Operating EBITDA

  • Increase in operating EBITDA driven by pricing actions and volume gains which more than offset higher product costs driven by inflationary pressure, weaker product mix and currency headwinds.

Outlook 


Dollars in millions, unless noted


Full Year 2022E

Net sales


~$13,000

Operating EBITDA(2)


~$3,250

Adjusted EPS(2)


~$3.30

"As demonstrated by our third quarter results, demand across most of our key end-markets remained strong in the period and our teams continued to successfully execute in a challenging macro environment marked by inflation and foreign currency headwinds," said Lori Koch, Chief Financial Officer of DuPont. "For the fourth quarter, we expect demand to remain strong in most end-markets, notably water, industrial and auto adhesives, but do anticipate continued softness in consumer electronics globally and some expected slowing in customer semiconductor fab production rates. Further, we plan to reduce our production rates to realign working capital in anticipation of a more normal supply chain environment. Lastly, we expect incremental currency headwinds to further impact both top and bottom-line results."

"As we look to close out the year, our expectation for full year organic sales growth of high-single digits remains unchanged," Koch continued. "Our updated full year adjusted EPS guidance is inclusive of a $0.09 headwind resulting from an increase in the anticipated tax rate for the full year 2022, offset by an assumed lower share count resulting from planned share repurchases and net interest benefits expected to be realized related to cash proceeds received from the M&M transaction."

Capital Allocation Update

On November 7, 2022, DuPont's Board of Directors approved a new share repurchase program authorizing the repurchase and retirement of up to $5 billion of common stock. This new repurchase authorization is in addition to the $250 million remaining under the Company's existing share repurchase program which was approved in February 2022. The Company intends to enter accelerated share repurchase agreements ("ASR Agreements") imminently, for the repurchase of an aggregate of approximately $3.25 billion of common stock with $250 million of such repurchases under the existing program and the remaining $3 billion under the new program. Any additional repurchases under the new share repurchase program will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off the market, which may include additional accelerated share repurchase agreements. The timing and number of shares to be repurchased will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements. The new repurchase program terminates on June 30, 2024, unless extended or shortened by the Board of Directors.

Reflecting DuPont's commitment to a balanced capital allocation framework, the Company announced its intent to retire $2.5 billion of Senior Notes due in November 2023 during the fourth quarter of 2022. This will enable approximately $100 million of annual interest savings. Additionally in the fourth quarter, the Company plans to reduce its commercial paper balance to zero. As of September 30, 2022, the Company had $1.3 billion of commercial paper outstanding.

The new share repurchase program and the intended de-levering actions demonstrate the Company's continued commitment to return value to shareholders and in maintaining a strong balance sheet within the framework of its balanced capital allocation policy. In addition, the Company's M&A focus remains on bolt-on targets that fit within its key growth pillars and are aligned with secular trends.  

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 beginning 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 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, healthcare 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 investors.dupont.com.

DuPont™ and all products, unless otherwise noted, denoted with TM, SMor ® are trademarks, service marks or registered trademarks of affiliates of DuPont de Nemours, Inc.

Overview

On February 17, 2022, DuPont announced that it has entered into definitive agreements to divest a majority of its historic Mobility & Materials segment, excluding certain Advanced Solutions and Performance Resins businesses, to Celanese Corporation ("Celanese"), (the "M&M Divestiture"). On November 1, 2022, DuPont completed the previously announced M&M Divestiture. The Company also announced on February 18, 2022, that its Board of Directors has approved the divestiture of the Delrin® acetal homopolymer (H-POM) business. In addition to the entry into definitive agreements, the Company anticipates that the closing of the sale of Delrin® would be subject to regulatory approvals and other customary closing conditions, (the "Delrin® Divestiture" and together with the M&M Divestiture, the "M&M Divestitures").

As of March 31, 2022, the results of operations and the assets and liabilities of the businesses in scope for the M&M Divestitures are presented as discontinued operations for all periods presented. The cash flows of these businesses have not been segregated and are included in the interim Consolidated Statement of Cash Flows. Unless otherwise indicated, the discussion of results, including the financial measures further discussed below, refer only to DuPont's Continuing Operations and do not include discussion of balances or activity of the businesses in scope for the M&M Divestitures. The Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines previously within the historic Mobility & Materials segment (the "Retained Businesses") are not included in the scope of the M&M Divestitures. The Retained Businesses are reported in Corporate & Other. The reporting changes have been retrospectively applied for all periods presented.

Cautionary Statement about 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.

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 possibility that the Company may fail to realize the anticipated benefits of the  $5 billion share repurchase program announced on November 8, 2022 and that the program may be suspended, discontinued or not completed prior to its termination on June 30, 2024; (ii) ability to achieve anticipated tax treatments in connection with mergers, acquisitions, divestitures, (including in connection with the divestiture of the majority of its  historic Mobility & Materials segment to Celanese completed on November 1, 2022, and  DuPont's pursuit of plans to divest the Delrin® acetal homopolymer business), and other portfolio changes actions and impact of changes in relevant tax and other laws; (iii) indemnification of certain legacy liabilities; (iv) risks and costs related to each of the parties respective performance under and the impact of the arrangement to share future eligible PFAS costs by and between DuPont, Corteva and Chemours; (v) failure to timely close on anticipated terms (or at all), realize expected benefits and effectively manage and achieve anticipated synergies and operational efficiencies in connection with mergers, acquisitions, divestitures and other portfolio changes; (vi) risks and uncertainties, including increased costs and the ability to obtain raw materials and meet customer needs, related to operational and supply chain impacts or disruptions, which may result from, among other events, the COVID-19 pandemic and actions in response to it, and geo-political and weather related events; (vii) ability to offset increases in cost of inputs, including raw materials, energy and logistics; (viii) risks, including ability to achieve, and costs associated with DuPont's sustainability strategy including the actual conduct of the company's activities and results thereof, and the development, implementation, achievement or continuation of any goal, program, policy or initiative discussed or expected; and (ix) other risks to DuPont's business, operations; each as further discussed in DuPont's most recent annual report and subsequent current and periodic reports filed with the U.S. Securities and Exchange Commission. 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 or supply chain 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.

Non-GAAP Financial Measures

This earnings release includes information that does not conform to accounting principles generally accepted in the United States of America ("U.S. GAAP") and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company, including allocating resources. DuPont's management believes these non-GAAP financial measures are useful to investors because they provide additional information related to the ongoing performance of DuPont to offer a more meaningful comparison related to future results of operations. These non-GAAP financial measures supplement disclosures prepared in accordance with U.S. GAAP, and should not be viewed as an alternative to U.S. GAAP. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided in the Selected Financial Information and Non-GAAP Measures starting on page 12 and in the Reconciliation to Non-GAAP Measures 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.

The historic Mobility & Material segment costs that are classified as discontinued operations include only direct operating expenses incurred by the M&M Businesses which the Company will cease to incur upon the close of the M&M Divestitures. Indirect costs, such as those related to corporate and shared service functions previously allocated to the M&M Businesses, do not meet the criteria for discontinued operations and remain reported within continuing operations. A portion of these indirect costs include costs related to activities the Company will continue to undertake post-closing of the M&M Divestiture, and for which it will be reimbursed ("Future Reimbursable Indirect Costs"). Future Reimbursable Indirect Costs are reported within continuing operations but are excluded from operating EBITDA as defined below. The remaining portion of these indirect costs is not subject to future reimbursement ("Stranded Costs"). Stranded Costs are reported within continuing operations in Corporate & Other and are included within Operating EBITDA.

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 of intangibles, the after-tax impact of non-operating pension / other post employment benefits ("OPEB") credits / costs and Future Reimbursable Indirect Costs. Management estimates amortization expense in 2022 associated with intangibles to be approximately $600 million on a pre-tax basis, or approximately $0.91 per share.

The Company's measure of profit/loss for segment reporting purposes is Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines Operating EBITDA as earnings (i.e., "Income from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, excluding Future Reimbursable Indirect Costs, and adjusted for significant items. Reconciliations of these measures are provided on the following pages.

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.

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 and excluding the impact of cash inflows/outflows that are unusual in nature and/or infrequent in occurrence. 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. Free cash flow conversion is defined as free cash flow divided by net income adjusted to exclude the after-tax impact of non-cash impairment charges, gains or losses on divestitures, amortization expense of intangibles and tax benefit/expense from discontinued operations.

(1)

During the first quarter of 2022, a substantial portion of the Company's historic Mobility & Materials segment met the criteria to be classified as discontinued operations for current and historical periods. See page 6 for further information, including the basis of presentation included in this release.

(2)

Adjusted EPS, operating EBITDA, organic sales, free cash flow and free cash flow conversion are non-GAAP measures. See page 7 for further discussion, including a definition of significant items. Reconciliation to the most directly comparable GAAP measure, including details of significant items begins on page 12 of this communication.

 

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,

2022

2021

2022

2021

Net sales

$       3,317

$       3,199

$       9,913

$       9,320

Cost of sales

2,095

2,032

6,354

5,852

Research and development expenses

129

137

413

409

Selling, general and administrative expenses

356

411

1,130

1,201

Amortization of intangibles

146

158

447

410

Restructuring and asset related charges - net

1

101

8

Acquisition, integration and separation costs

7

29

28

58

Equity in earnings of nonconsolidated affiliates

16

22

62

65

Sundry income (expense) - net

26

1

123

155

Interest expense

128

115

370

390

Income from continuing operations before income taxes

498

339

1,255

1,212

Provision for income taxes on continuing operations

139

80

299

172

Income from continuing operations, net of tax

359

259

956

1,040

Income from discontinued operations, net of tax

17

145

723

5,249

Net income

376

404

1,679

6,289

Net income attributable to noncontrolling interests

9

13

37

26

Net income available for DuPont common stockholders

$          367

$          391

$       1,642

$       6,263


Per common share data:





Earnings per common share from continuing operations - basic

$         0.69

$         0.48

$         1.81

$         1.86

Earnings per common share from discontinued operations - basic

0.05

0.27

1.44

9.49

Earnings per common share - basic

$         0.73

$         0.75

$         3.25

$       11.35

Earnings per common share from continuing operations - diluted

$         0.69

$         0.48

$         1.80

$         1.86

Earnings per common share from discontinued operations - diluted

0.05

0.27

1.44

9.46

Earnings per common share - diluted

$         0.73

$         0.75

$         3.24

$       11.32


Weighted-average common shares outstanding - basic

499.4

521.5

505.6

551.7

Weighted-average common shares outstanding - diluted

500.4

523.1

506.9

553.1

 

DuPont de Nemours, Inc.

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)

September 30, 2022

December 31, 2021

Assets



Current Assets



Cash and cash equivalents

$                               1,785

$                               1,972

Accounts and notes receivable - net

2,257

2,159

Inventories

2,359

2,086

Prepaid and other current assets

216

177

Assets held for sale

245

Assets of discontinued operations

7,733

7,664

Total current assets

14,350

14,303

Property, plant and equipment - net of accumulated depreciation (September 30,
2022 - $4,227; December 31, 2021 - $4,142)

5,477

5,753

Other Assets



Goodwill

16,302

16,981

Other intangible assets

5,550

6,222

Restricted cash and cash equivalents

103

53

Investments and noncurrent receivables

779

919

Deferred income tax assets

122

116

Deferred charges and other assets

1,416

1,360

Total other assets

24,272

25,651

Total Assets

$                             44,099

$                             45,707

Liabilities and Equity



Current Liabilities



Short-term borrowings

$                               1,287

$                                  150

Accounts payable

2,061

2,102

Income taxes payable

284

201

Accrued and other current liabilities

990

1,040

Liabilities related to assets held for sale

25

Liabilities of discontinued operations

1,392

1,413

Total current liabilities

6,014

4,931

Long-Term Debt

10,564

10,632

Other Noncurrent Liabilities



Deferred income tax liabilities

464

1,459

Pension and other post-employment benefits - noncurrent

625

762

Other noncurrent obligations

929

873

Total other noncurrent liabilities

2,018

3,094

Total Liabilities

18,596

18,657

Commitments and contingent liabilities



Stockholders' Equity



Common stock (authorized 1,666,666,667 shares of $0.01 par value each;

issued 2022: 496,738,067 shares; 2021: 511,792,785 shares)

5

5

Additional paid-in capital

49,199

49,574

Accumulated deficit

(22,692)

(23,187)

Accumulated other comprehensive (loss) income

(1,603)

41

Total DuPont stockholders' equity

24,909

26,433

Noncontrolling interests

594

617

Total equity

25,503

27,050

Total Liabilities and Equity

$                             44,099

$                             45,707

 

DuPont de Nemours, Inc.

Consolidated Statement of Cash Flows


In millions (Unaudited)

Nine Months Ended September 30,

2022

2021

Operating Activities



Net income

$                      1,679

$                      6,289

Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization

906

1,094

Credit for deferred income tax and other tax related items

(977)

(182)

Earnings of nonconsolidated affiliates less than (in excess of) dividends received

10

(41)

Net periodic benefit (credit) cost

(6)

2

Periodic benefit plan contributions

(51)

(62)

Net gain on sales and split-offs of assets, businesses and investments

(73)

(5,117)

Restructuring and asset related charges - net

101

15

Inventory step-up amortization

12

Other net loss

39

128

Changes in assets and liabilities, net of effects of acquired and divested companies:



Accounts and notes receivable

(342)

(399)

Inventories

(688)

(515)

Accounts payable

194

379

Other assets and liabilities, net

(78)

57

Cash provided by operating activities

714

1,660

Investing Activities



Capital expenditures

(558)

(707)

Proceeds from sales of property and businesses, net of cash divested

364

285

Acquisitions of property and businesses, net of cash acquired

5

(2,323)

Purchases of investments

(15)

(2,001)

Proceeds from sales and maturities of investments

15

2,001

Other investing activities, net

4

18

Cash used for investing activities

(185)

(2,727)

Financing Activities



Changes in short-term notes borrowings

1,137

Proceeds from credit facility

600

Proceeds from issuance of long-term debt transferred to IFF at split-off

1,250

Repayment of credit facility

(600)

Payments on long-term debt

(5,000)

Purchases of common stock

(1,125)

(1,643)

Proceeds from issuance of Company stock

83

110

Employee taxes paid for share-based payment arrangements

(25)

(26)

Distributions to noncontrolling interests

(35)

(34)

Dividends paid to stockholders

(500)

(476)

Cash transferred to IFF and subsequent adjustments

(11)

(100)

Other financing activities, net

(4)

(2)

Cash used for financing activities

(480)

(5,921)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(191)

(49)

Decrease in cash, cash equivalents and restricted cash

(142)

(7,037)

Cash, cash equivalents and restricted cash from continuing operations, beginning of period

2,037

8,733

Cash, cash equivalents and restricted cash from discontinued operations, beginning of period

39

42

Cash, cash equivalents and restricted cash at beginning of period

2,076

8,775

Cash, cash equivalents and restricted cash from continuing operations, end of period

1,896

1,700

Cash, cash equivalents and restricted cash from discontinued operations, end of period

38

38

Cash, cash equivalents and restricted cash at end of period

$                      1,934

$                      1,738

 

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, 2022

Sep 30, 2021

Sep 30, 2022

Sep 30, 2021

Electronics & Industrial

$             1,511

$             1,467

$             4,574

$             4,087

Water & Protection

1,534

1,397

4,460

4,137

Corporate & Other 1

272

335

879

1,096

Total

$             3,317

$             3,199

$             9,913

$             9,320

U.S. & Canada

$             1,149

$             1,011

$             3,293

$             2,875

EMEA 2

523

562

1,665

1,672

Asia Pacific

1,524

1,529

4,622

4,490

Latin America

121

97

333

283

Total

$             3,317

$             3,199

$             9,913

$             9,320


Net Sales Variance by Segment
and Geographic Region

Three Months Ended September 30, 2022

Local Price &
Product Mix

Volume

Total

Organic

Currency

Portfolio & Other

Total

Percent change from prior year
(Unaudited)

Electronics & Industrial

3 %

4 %

7 %

(4) %

— %

3 %

Water & Protection

13

2

15

(5)

10

Corporate & Other 1

10

5

15

(4)

(30)

(19)

Total

8 %

3 %

11 %

(4) %

(3) %

4 %

U.S. & Canada

12 %

7 %

19 %

— %

(5) %

14 %

EMEA2

9

(3)

6

(10)

(4)

(8)

Asia Pacific

5

2

7

(5)

(2)

Latin America

12

15

27

(2)

25

Total

8 %

3 %

11 %

(4) %

(3) %

4 %


Net Sales Variance by Segment
and Geographic Region

Nine Months Ended September 30, 2022

Local Price &
Product Mix

Volume

Total

Organic

Currency

Portfolio & Other

Total

Percent change from prior year
(Unaudited)

Electronics & Industrial

2 %

6 %

8 %

(3) %

7 %

12 %

Water & Protection

12

(1)

11

(3)

8

Corporate & Other 1

10

10

(3)

(27)

(20)

Total

7 %

2 %

9 %

(3) %

— %

6 %

U.S. & Canada

12 %

5 %

17 %

— %

(2) %

15 %

EMEA2

9

(1)

8

(8)

(1)

(1)

Asia Pacific

3

2

5

(3)

1

3

Latin America

9

8

17

1

18

Total

7 %

2 %

9 %

(3) %

— %

6 %



1.

Corporate & Other includes activities of the Retained Businesses and previously divested businesses including Biomaterials, Clean Technologies and Solamet®.

2.

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


In millions (Unaudited)

Sep 30, 2022

Sep 30, 2021

Sep 30, 2022

Sep 30, 2021


Electronics & Industrial

$               473

$               475

$            1,429

$            1,335


Water & Protection

382

353

1,071

1,060


Corporate & Other 1

1

(11)

3

5


Total

$               856

$               817

$            2,503

$            2,400


1. In addition to corporate expenses, Corporate & Other includes activities of the Retained Businesses and previously divested businesses, including
Biomaterials, Clean Technologies and Solamet®.









Equity in Earnings of Nonconsolidated Affiliates by Segment

Three Months Ended

Nine Months Ended


In millions (Unaudited)

Sep 30, 2022

Sep 30, 2021

Sep 30, 2022

Sep 30, 2021


Electronics & Industrial

$                   7

$                 13

$                 26

$                 32


Water & Protection

9

7

31

27


Corporate & Other 1

2

5

6


Total equity earnings included in operating EBITDA (GAAP)

$                 16

$                 22

$                 62

$                 65


1. Corporate & Other includes activities of the Retained Businesses and previously divested businesses, including Biomaterials, Clean Technologies and
Solamet®.









Reconciliation of "Income from continuing operations, net of tax" to
"Operating EBITDA"

Three Months Ended

Nine Months Ended



In millions (Unaudited)

Sep 30, 2022

Sep 30, 2021

Sep 30, 2022

Sep 30, 2021


Income from continuing operations, net of tax (GAAP)

$               359

$               259

$               956

$            1,040


+ Provision for income taxes on continuing operations

139

80

299

172


Income from continuing operations before income taxes

$               498

$               339

$            1,255

$            1,212


+ Depreciation and amortization

283

300

861

817


-  Interest income 1

5

1

8

10


+ Interest expense

127

115

365

390


-  Non-operating pension/OPEB benefit 1

7

9

20

22


' -  Foreign exchange (gains) losses, net 1

5

(19)

9

(35)


+ Future reimbursable indirect costs

14

15

45

46


- Significant items

49

(39)

(14)

68


Operating EBITDA (non-GAAP)

$               856

$               817

$            2,503

$            2,400


1.  Included in "Sundry income (expense) - net."


Reconciliation of "Cash provided by operating activities" to
Free Cash Flow

Three Months Ended

Nine Months Ended

In millions (Unaudited)

Sep 30, 2022

Sep 30, 2021

Sep 30, 2022

Sep 30, 2021

Cash provided by operating activities (GAAP) 1

$               419

$               842

$               714

$            1,660

Capital expenditures

(172)

(208)

(558)

(707)

Other 2

115

115

Free cash flow (non-GAAP)

$               362

$               634

$               271

$               953



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, includes cash activity related to the M&M Businesses and in the comparative period, the former Nutrition & Biosciences business segment prior to separation.

2.

Other represents estimated tax payments associated with the M&M Divestiture.

 

DuPont de Nemours, Inc.

Selected Financial Information and Non-GAAP Measures


Significant Items Impacting Results for the Three Months Ended September 30, 2022

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Reported results (GAAP)

$       498

$       343

$      0.69


Less: Significant items





Acquisition, integration and separation costs 4

(7)

(5)

(0.01)

Acquisition, integration and separation
costs

Gain on divestiture 5

5

3

0.01

Sundry income (expense) - net

Intended Rogers Acquisition financing fees 6

(1)

(1)

Interest expense

Income tax related item

13

0.02

Provision for income taxes on
continuing operation

Employee Retention Credit 7

52

40

0.08

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Total significant items

$         49

$         50

$      0.10


Less: Amortization of intangibles

(146)

(113)

(0.22)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

7

6

0.01

Sundry income (expense) - net

Less: Future reimbursable indirect costs

(14)

(11)

(0.02)

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Adjusted results (non-GAAP)

$       602

$       411

$      0.82



Significant Items Impacting Results for the Three Months Ended September 30, 2021

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Reported results (GAAP)

$       339

250

$      0.48


Less: Significant items





Acquisition, integration and separation costs 8

(29)

(29)

(0.05)

Acquisition, integration and separation
costs

Restructuring and asset related charges - net 9

(1)

Restructuring and asset related charges -
net

Gain on divestiture 10

3

3

Sundry income (expense) - net

Inventory step-up amortization 11

(12)

(10)

(0.02)

Cost of sales

Total significant items

$       (39)

$       (36)

$    (0.07)


Less: Amortization of intangibles

(158)

(124)

(0.23)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

9

6

0.01

Sundry income (expense) - net

Less: Future reimbursable indirect costs

(15)

(11)

(0.02)

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Adjusted results (non-GAAP)

$       542

$       415

$      0.79




1.

Income from continuing operations before income taxes.

2.

Net income from continuing operations available for DuPont common stockholders. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

3.

Earnings per common share from continuing operations - diluted.

4.

Acquisition, integration and separation costs related to strategic initiatives including the sale of the Biomaterials business unit, the acquisition of Laird PM and the Intended Rogers Acquisition.

5.

Reflects gain related to interest on a milestone payment associated with the TCS/HSC disposal.

6.

Reflects structuring fees and the amortization of the commitment fees related to the financing agreements entered into for the Intended Rogers Acquisition.

7.

Employee Retention Credit pursuant to the Coronavirus Aid, Relief, and Economic Security ("CARES") Act as enhanced by the Consolidated Appropriations Act ("CAA") and American Rescue Plan Act ("ARPA").

8.

Acquisition, integration and separation costs related to strategic initiatives, which primarily includes the sale of the Solamet®, Biomaterials, and Clean Technologies business units and the acquisition of Laird PM..

9.

Includes Board approved restructuring plans and asset related charges.

10.

Reflects an additional gain related to the historical sales of Solamet and TCS/HSC reflected in Corporate.

11.

Reflects the amortization of the inventory step-up related to the Laird acquisition.

 

DuPont de Nemours, Inc.

Selected Financial Information and Non-GAAP Measures


Significant Items Impacting Results for the Nine Months Ended September 30, 2022

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Reported results (GAAP)

$   1,255

$       914

$      1.80


Less: Significant items





Acquisition, integration and separation costs 4

(28)

(22)

(0.04)

Acquisition, integration and separation
costs

Restructuring and asset related charges - net 5

(7)

(5)

(0.01)

Restructuring and asset related charges -
net

Asset impairment charges 6

(94)

(65)

(0.13)

Restructuring and asset related charges -
net

Gain on divestiture 7

68

60

0.12

Sundry income (expense) - net

Intended Rogers Acquisition financing fees 8

(5)

(4)

(0.01)

Interest expense

Income tax related item

(1)

Provision for income taxes on
continuing operations

Employee Retention Credit 9

52

40

0.08

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Total significant items

$       (14)

$           3

$      0.01


Less: Amortization of intangibles

(447)

(347)

(0.69)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

20

16

0.03

Sundry income (expense) - net

Less: Future reimbursable indirect costs

(45)

(35)

(0.07)

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Adjusted results (non-GAAP)

$   1,741

$   1,277

$      2.52



Significant Items Impacting Results for the Nine Months Ended September 30, 2021

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Reported results (GAAP)

$   1,212

$   1,028

$      1.86


Less: Significant items





Acquisition, integration and separation costs 10

(58)

(55)

(0.10)

Acquisition, integration and separation
costs

Restructuring and asset related charges - net 5

(8)

(5)

(0.01)

Restructuring and asset related charges -
net

Gain on divestitures 11

146

111

0.20

Sundry income (expense) - net

Inventory step-up amortization

(12)

(10)

(0.02)

Cost of sales

Income tax related item 12

75

0.14

Provision for income taxes on
continuing operations

Total significant items

$        68

$      116

$     0.21


Less: Amortization of intangibles

(410)

(321)

(0.58)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

22

13

0.02

Sundry income (expense) - net

Less: Future reimbursable indirect costs

(46)

(35)

(0.06)

Cost of sales; Research and
development expenses; Selling, general
and administrative expenses

Adjusted results (non-GAAP)

$   1,578

$   1,255

$      2.27




1.

Income from continuing operations before income taxes.

2.

Net income from continuing operations available for DuPont common stockholders. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

3.

Earnings per common share from continuing operations - diluted.

4.

Acquisition, integration and separation costs related to primarily related to costs associated with the divestiture of the Biomaterials business unit, acquisition of Laird PM and the Intended Rogers Acquisition.

5.

Includes Board approved restructuring plans and asset related charges.

6.

Reflects a pre-tax impairment charge related to an equity method investment.

7.

Reflects the gains on sale of the Biomaterials business unit within Corporate & Other, the sale of land use right within the Water & Protection segment, and the gain related to interest on a milestone payment associated with the TCS/HSC Disposal.

8.

Reflects structuring fees and the amortization of the commitment fees related to the financing agreements entered into for the Intended Rogers Acquisition.

9.

Employee Retention Credit pursuant to the Coronavirus Aid, Relief, and Economic Security ("CARES") Act as enhanced by the Consolidated Appropriations Act ("CAA") and American Rescue Plan Act ("ARPA").

10.

Acquisition, integration and separation costs primarily associated with the execution of activities related to strategic initiatives including the  divestiture of the Biomaterials business unit, the acquisition of Laird PM and the divestitures of the Clean Technologies and Solamet® business units.

11.

Reflects the gain from the sale of the Solamet® business within Corporate & Other and post-closing adjustments related to previously divested businesses.

12.

Includes a net $77 million tax benefit primarily related to the impact of tax reform in Switzerland.

 

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SOURCE DuPont

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