-
4Q18 GAAP EPS from Continuing Ops of $0.21; Adj. EPS Increases 6% to
$0.88
-
4Q18 GAAP Net Income from Continuing Ops of $513MM; Op. EBITDA Flat at
$3.9B
-
FY18 GAAP EPS from Continuing Ops of $1.65; Adj. EPS Increases 21% on
a Pro Forma Basis to $4.11
-
FY18 GAAP Net Income from Continuing Ops of $4.0B; Op. EBITDA Up 13%
on a Pro Forma Basis to $18.3B
MIDLAND, Mich. & WILMINGTON, Del.--(BUSINESS WIRE)--
DowDuPont (NYSE: DWDP):
Fourth Quarter Financial Highlights
-
GAAP earnings per share from continuing operations totaled $0.21.
Adjusted earnings1 per share increased 6 percent to $0.88,
compared with the year-ago period of $0.83. Adjusted earnings per
share excludes significant items in the quarter totaling net charges
of $0.56 per share and an $0.11 per share charge for DuPont
amortization of intangible assets.
-
Net sales were even with the year-ago period at $20.1 billion, as
price and volume gains were offset by currency.
-
Volume grew 1 percent from the year-ago period. Gains were achieved in
Asia Pacific, up 8 percent and Latin America, up 9 percent, which more
than offset volume declines in U.S. & Canada, down 3 percent and EMEA,
down 1 percent.
-
Local price rose 1 percent, with gains in most regions. Currency
decreased sales 2 percent.
-
GAAP Net Income from Continuing Operations totaled $513 million.
Operating EBITDA1 was $3.9 billion, flat with the year-ago
period, as cost synergies and local price gains were offset by margin
compression in the Materials Science Division, lower equity earnings
and a headwind from currency.
-
DowDuPont achieved cost synergy savings of more than $500 million in
the quarter, and since merger close has now delivered more than $1.8
billion of cumulative savings.
-
Cash flow from operations in the quarter was $5.1 billion compared to
$1.8 billion in the year-ago period. After adjusting for the
accounting and presentation change for accounts receivable
securitization, cash flow from operations rose $0.9 billion
year-over-year.
-
The Company returned $2.3 billion to shareholders in the quarter
through dividends ($0.9 billion) and share repurchases ($1.4 billion).
DowDuPont intends to complete its remaining open share repurchases in
the first quarter of 2019. Since merger close, the Company has
returned nearly $10 billion to shareholders.
CEO Quote
“In our first full year as a merged company, we delivered consistently
strong results. Pro forma sales rose 8 percent with gains in every
geography. We delivered a 13 percent increase in operating EBITDA. And
we raised our cost synergy expectation by 20 percent to $3.6 billion,
while continuing to return significant capital to shareholders,” said Ed
Breen, chief executive officer of DowDuPont.
“We remain on track for the separation of the new Dow on April 1,
followed by Corteva from the new DuPont on June 1. We are excited about
launching these three global companies, each set to be an industry
leader with the right capital structure and now better positioned to
serve customers, compete in their end markets and focus on their
innovation priorities. We’ve also put in place strong leadership teams
who are singularly focused on capitalizing on their competitive
advantages and delivering on their substantial growth and cost synergy
opportunities to create value both now and over the long-term.”
2018 Full-Year Highlights
-
GAAP earnings per share from continuing operations totaled $1.65.
Adjusted earnings per share was $4.11, up 21 percent versus pro forma
results in the year-ago period. Adjusted earnings per share excludes
significant items totaling net charges of $2.02 per share, as well as
a $0.44 per share charge for DuPont amortization of intangible assets.
-
GAAP net sales increased 38 percent. Net sales increased 8 percent to
$86.0 billion versus pro forma results in the year-ago period, with
gains in all regions.
-
Volume grew 4 percent on a pro forma basis, with gains in most
regions, led by double-digit growth in Asia Pacific.
-
Local price rose 3 percent on a pro forma basis, with gains in all
regions. Currency increased sales 1 percent.
-
GAAP Net Income from Continuing Operations totaled $4.0 billion.
Operating EBITDA increased 13 percent to $18.3 billion versus pro
forma results in the year-ago period, as cost synergies; local price
gains; volume growth, including the benefit of new capacity additions;
lower pension/OPEB costs; and higher equity earnings more than offset
higher raw material costs.
-
DowDuPont achieved year-over-year cost synergy savings of
$1.6 billion, surpassing its increased target of $1.5 billion.
-
Cash flow from operations totaled $4.7 billion and included
discretionary pension contributions of approximately $2.2 billion.
Excluding these discretionary contributions, cash flow from operations
would have been $6.9 billion.
Fourth Quarter Division Highlights
Materials Science
-
Net sales decreased 1 percent to $11.8 billion, as volume growth of 1
percent was more than offset by local price and currency, each down 1
percent.
-
Operating EBITDA decreased 12 percent to $2.1 billion, driven by
margin compression in isocyanates and polyethylene products and lower
equity earnings.
-
Full-year sales increased 11 percent on a pro forma basis, with local
price and volume gains in all regions. Operating EBITDA grew 10
percent on a pro forma basis, with gains in all segments, driven by
local price and volume gains, including contributions from new
capacity on the U.S. Gulf Coast; cost synergies; and higher equity
earnings.
-
The division achieved successful startups of the final assets in its
first wave of U.S. Gulf Coast investments, bringing online its new
NORDEL™ EPDM, high melt index elastomers and low density polyethylene
trains, and completing the capacity expansion of a bi-modal gas phase
polyethylene unit. Additionally, Sadara successfully completed its
Creditors’ Reliability Test in the fourth quarter.
Performance Materials & Coatings
Performance Materials & Coatings reported net sales of $2.2 billion,
down 1 percent from the year-ago period. Sales increases in most regions
were more than offset by a decline in Asia Pacific. Local price
increased 7 percent, with gains in all regions. Volume declined 6
percent, with decreases in both businesses and all regions. Currency
decreased sales 2 percent versus the year-ago period.
Consumer Solutions and Coatings & Performance Monomers both reported
modest sales declines on lower volume and unfavorable impacts from
currency, which more than offset price gains in all regions. Consumer
Solutions continued to capture price gains, while volume declined
primarily due to proactive measures to improve product and business mix.
Coatings & Performance Monomers sales declined as price increases in
most regions were more than offset by lower demand and a headwind from
currency.
Operating EBITDA increased to $421 million, up 5 percent from
$400 million in the year-ago period. The increase was primarily due to
higher local pricing and cost synergy capture, which more than offset
volume declines and a $20 million impact from an extended turnaround in
Performance Monomers.
Industrial Intermediates & Infrastructure
Industrial Intermediates & Infrastructure reported net sales of $3.7
billion, up 4 percent from net sales of $3.6 billion in the year-ago
period. The sales increase was driven by gains in Asia Pacific and U.S.
& Canada. Local price declined 2 percent with declines in most regions
and both businesses. Volume grew 8 percent, with gains in most regions,
including a double-digit gain in Asia Pacific. Currency decreased sales
2 percent versus the year-ago period.
Polyurethanes & CAV delivered sales gains in U.S. & Canada and Asia
Pacific that more than offset declines in Latin America and EMEA. Volume
grew high single-digits, led by a double-digit gain in Asia Pacific due
to increased supply from the Sadara joint venture. A local price
increase in U.S. & Canada was more than offset by price declines in Asia
Pacific and EMEA, primarily due to lower isocyanates prices that, on a
global basis, fell nearly 40 percent year-over-year. Industrial
Solutions reported mid-single-digit sales growth, driven by volume gains
in most regions, which more than offset modest price declines. The
business’s volume growth was supported by greater production from the
Sadara joint venture.
Operating EBITDA was $553 million, down 18 percent from $677 million in
the year-ago period. The decline was primarily driven by a contraction
in isocyanates and monoethylene glycol (MEG) prices that impacted both
core business results and equity earnings. These headwinds were partly
offset by volume gains and cost synergy capture.
The segment reported an equity loss of $15 million, compared with equity
earnings of $71 million in the year-ago period. The decline was driven
primarily by contraction in isocyanates prices and lower earnings from
the Thai joint ventures.
Packaging & Specialty Plastics
Packaging & Specialty Plastics reported net sales of $5.9 billion, down
4 percent from net sales of $6.1 billion in the year-ago period. A
double-digit sales gain in Asia Pacific and a mid-single-digit increase
in Latin America were more than offset by declines in U.S. & Canada and
EMEA. Local price declined 3 percent, driven by lower polyethylene
product prices. Volume for the segment was flat, as gains in Asia
Pacific and Latin America were offset by declines in U.S. & Canada and
EMEA. Currency decreased sales 1 percent.
The Packaging and Specialty Plastics business grew volume, supported by
higher demand in most regions and new capacity from Sadara and the U.S.
Gulf Coast. Demand growth was led by Industrial & Consumer Packaging and
Flexible Food & Specialty Packaging. The business also achieved volume
gains in elastomers and in wire and cable applications. Hydrocarbons &
Energy volume declined, primarily due to lower merchant market ethylene
sales on greater internal downstream consumption from new asset startups.
Operating EBITDA was $1.1 billion, down 13 percent from operating EBITDA
of $1.3 billion in the year-ago period. Cost synergies, increased supply
from growth projects and lower commissioning and startup costs were more
than offset by reduced equity earnings and margin contraction across
polyethylene products due to price declines.
Equity earnings were $37 million, down 37 percent from the year-ago
period. The decline was driven by higher equity losses from the Sadara
joint venture due to polyethylene margin compression.
Specialty Products
-
Net sales increased 2 percent to $5.5 billion versus the year-ago
period, with gains in most segments.
-
Local price rose 2 percent, and portfolio benefitted sales by 1
percent. Volumes were flat while currency decreased sales by 1 percent.
-
Operating EBITDA grew 13 percent to $1.8 billion versus the same
quarter last year, with gains in all segments.
-
Full-year net sales grew 8 percent. Operating EBITDA grew 18 percent
versus the prior-year period on a pro forma basis driven by cost
synergies, lower pension/OPEB costs, higher volume and favorable
currency, which more than offset higher raw material costs. The full
year also benefitted from a portfolio gain as a result of the
acquisition of FMC’s Health & Nutrition business.
Electronics & Imaging
Electronics & Imaging reported net sales of $1.2 billion, down 2 percent
from the year-ago period as volume growth of 1 percent was offset by a 2
percent decline in local price and a 1 percent currency headwind.
Volume growth in the segment was led by continued strength in
semiconductor technologies on strong demand in chemical mechanical
planarization (CMP) and advanced packaging end-markets as well as
double-digit gains in display technologies. These gains were partially
offset by volume declines in interconnect solutions due to weaker
smartphone sales and continued softness in the photovoltaics market.
Volume gains in U.S. & Canada and Asia Pacific were offset by declines
in EMEA.
Declines in local price were driven by weakness in the photovoltaics
market.
Operating EBITDA for the segment was $685 million, an increase of 18
percent from $581 million in the year-ago period. Both the fourth
quarter 2018 and the fourth quarter 2017 include a benefit associated
with customer settlements within an equity affiliate. The fourth quarter
2018 also includes income associated with an asset sale. These items
provided a net benefit of $142 million versus the year-ago period.
Excluding equity affiliate income, operating EBITDA was up 9 percent as
a gain on an asset sale, cost synergies, and higher volume more than
offset declines in local price.
Nutrition & Biosciences
Nutrition & Biosciences reported net sales of $1.6 billion, up 3 percent
from the year-ago period. The increase was driven by a 4 percent
portfolio benefit and a volume gain of 1 percent. Local price was flat
and currency was a 2 percent headwind. The positive impact from
portfolio-related actions was due to the acquisition of FMC’s Health &
Nutrition business in late 2017.
Volume gains in the segment were led by Nutrition & Health on
double-digit volume growth in probiotics, continued strength in systems
& texturants and broad-based growth in Asia Pacific where volumes
increased double-digits versus the year-ago period. These gains were
partially offset by volume declines in Industrial Biosciences driven by
a slow-down in demand from U.S. & Canada energy and carpet end-markets.
Operating EBITDA for the segment was $367 million, up 4 percent from
operating EBITDA of $352 million in the year-ago period driven by cost
synergies, a portfolio benefit and volume gains, which more than offset
higher raw material costs.
Transportation & Advanced Polymers
Transportation & Advanced Polymers reported net sales of $1.3 billion,
up 2 percent from the year-ago period. Local price increased 8 percent,
partially offset by 5 percent volume and 1 percent currency headwinds.
Organic sales growth in the US & Canada and Asia Pacific was partially
offset by declines in EMEA.
Local price increased 8 percent, mainly within engineering polymers,
reflecting tight polymer supply and higher feedstock costs. Local price
improved in all regions, led by Asia Pacific and EMEA.
Volume declined 5 percent due to auto build declines and weaker
electronics demand in Asia Pacific and EMEA. Volume was down in all
regions except the US & Canada.
Operating EBITDA for the segment totaled $389 million, an increase of 7
percent from $365 million in the year-ago period. Higher local price and
cost synergies contributed to the improvement, more than offsetting
lower volumes and higher raw material costs.
Safety & Construction
Safety & Construction reported net sales of $1.3 billion, up 4 percent
from the year-ago period. Organic sales increased 6 percent driven by
local price gains and higher volumes. Currency was a 1 percent headwind
while the December 1, 2018 divestiture of the European XPS STYROFOAM™
business reduced sales by 1 percent.
Volume gains of 3 percent were driven by continued strength across
industrial, oil and gas, aerospace and life and personal protection
end-markets, resulting in strong volume growth in Nomex® fibers and
Kevlar® high-strength materials, more than offsetting continued softness
in U.S. residential construction demand. Volume increased in all regions.
Local price improved 3 percent with gains in all regions and across all
lines of business, led by strength in Kevlar®.
Operating EBITDA for the segment totaled $343 million, an increase of 20
percent from $286 million in the year-ago period. Cost synergies, volume
and local price gains drove the improvement, which more than offset
higher raw material and freight costs.
Agriculture
-
Net sales of $2.8 billion grew 1 percent in the fourth quarter, driven
by sales of new Crop Protection products and the timing of seed
shipments in Latin America and U.S & Canada, partly offset by currency
pressures in Latin America. Volume and price rose 4 percent and 5
percent, respectively, offset by currency of 5 percent and the
portfolio impact of the Brazil corn seed remedy of 3 percent.
-
Operating EBITDA grew 4 percent in the fourth quarter. Cost synergies
and sales gains drove the improvement, which was partly offset by
higher input costs and investments to support new product launches.
-
Full-year net sales of $14.3 billion were even with last year as
organic sales growth of 1 percent was offset by a portfolio impact.
Organic sales growth of 6 percent in crop protection was driven by new
product sales, which more than offset currency pressures. Seed sales
declined 4 percent as higher local price was more than offset by
reduced volume related to lower planted area in U.S. & Canada and
Latin America and the Brazil corn remedy.
-
Full-year operating EBITDA of $2.7 billion increased 4 percent as cost
synergies, new product sales gains in Crop Protection and lower
pension/OPEB costs more than offset higher input costs, investments to
support new product launches and seed sales declines.
Fourth quarter net sales in Crop Protection increased 6 percent. Organic
sales grew 10 percent on strong volumes, driven by new product launches
(including picoxy-based products in Latin America, pasture and land
management products and Enlist™ Herbicides), partly offset by a
weather-related reduction in demand for nitrogen stabilizers. Higher
local prices were offset by currency pressures, primarily in Latin
America.
Fourth quarter net sales in Seeds decreased 4 percent. Organic sales
increased 8 percent. Strong volume growth reflected the beginning of a
recovery from the sale of the Dow AgroSciences Brazil corn seed remedy,
an early start to the safrinha season in Latin America and the timing of
seed shipments in U.S. & Canada. The negative portfolio impact reflected
inclusion of two months of the Brazil corn remedy in last year’s quarter.
Fourth quarter operating EBITDA grew 4 percent as margin expansion from
synergies and sales gains more than offset higher input costs and
investments to support new product launches.
Outlook
“We expect global economic expansion to continue in 2019 at a moderately
slower pace than 2018,” said Howard Ungerleider, chief financial officer
of DowDuPont. “We continue to closely monitor macroeconomic and
geopolitical developments, including ongoing trade negotiations and the
pace of economic activity in China. In this environment, we remain
focused on the actions in our control, including capitalizing on our
growth investments, capturing cost synergy savings, delivering
productivity actions and advancing our spin milestones.”
Conference Call
The Company will host a live
webcast of its fourth quarter and full year earnings conference call
with investors to discuss its results, business outlook and other
matters today at 8:00 a.m. ET. The slide presentation that accompanies
the conference call will be posted on the DowDuPont Investor Relations
events and presentations page.
A replay of the webcast will also be available on the investor events
and presentations page of www.dow-dupont.com.
(1)
|
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Adjusted earnings per share, Pro forma adjusted earnings per share,
Operating EBITDA and Pro forma operating EBITDA are non-GAAP
measures. See page 15 for further discussion. Full year 2017
information is on a pro forma basis and was determined in accordance
with Article 11 of Regulation S-X.
|
(2)
|
|
Pension/OPEB (other post-employment benefit plans) costs include all
components of net periodic benefit cost from continuing operations.
|
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About DowDuPont™
DowDuPont (NYSE: DWDP) is a holding company comprised of The Dow
Chemical Company and DuPont with the intent to form strong, independent,
publicly traded companies in agriculture, materials science and
specialty products sectors that will lead their respective industries
through productive, science-based innovation to meet the needs of
customers and help solve global challenges. For more information, please
visit us at www.dow-dupont.com.
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.
DowDuPont plans to separate into three, independent, publicly traded
companies—one for each of its agriculture, materials science and
specialty products businesses (the “Intended Business Separations” and
the transactions to accomplish the Intended Business Separations, the
“separations”).
In furtherance of the Intended Business Separations, DowDuPont is
engaged in a series of reorganization and realignment steps to realign
its businesses so that the assets and liabilities aligned with the
materials science business will be held by legal entities that will
ultimately be subsidiaries of Dow Holdings Inc. (“Dow”) and the assets
and liabilities aligned with the agriculture business will be held by
legal entities that will ultimately be subsidiaries of Corteva Inc.
(“Corteva”). Following this realignment, DowDuPont expects to distribute
its materials science and agriculture businesses through two separate
U.S. federal tax-free spin-offs in which DowDuPont stockholders, at the
time of such spin-offs, will receive pro rata dividends of the shares of
the capital stock of Dow and of Corteva, as applicable (the
“distributions”).
Forward-looking statements by their nature address matters that are, to
varying degrees, uncertain, including statements about the Intended
Business Separations, the separations and distributions. Forward-looking
statements, including those related to the DowDuPont’s ability to
complete, or to make any filing or take any other action required to be
taken to complete, the separations and distributions, are not guarantees
of future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from
those expressed in any forward-looking statements. Forward-looking
statements also involve risks and uncertainties, many of which are
beyond the DowDuPont’s control. Some of the important factors that could
cause DowDuPont’s, Historical Dow’s or Historical DuPont’s actual
results (including DowDuPont’s agriculture business, materials science
business or specialty products business as conducted by and through
Historical Dow and Historical DuPont) to differ materially from those
projected in any such forward-looking statements include, but are not
limited to: (i) ability and costs to achieve all the expected benefits,
including anticipated cost and growth synergies, from the integration of
Historical Dow and Historical DuPont and the Intended Business
Separations; (either directly or as conducted through Historical Dow and
Historical DuPont), (ii) the incurrence of significant costs in
connection with the integration of Historical Dow and Historical DuPont
and the Intended Business Separations; (iii) risks outside the control
of DowDuPont, Historical Dow and Historical DuPont which could impact
the decision of the DowDuPont Board of Directors to proceed with the
Intended Business Separations, including, among others, global economic
conditions, instability in credit markets, declining consumer and
business confidence, fluctuating commodity prices and interest rates,
volatile foreign currency exchange rates, tax considerations, and other
challenges that could affect the global economy, specific market
conditions in one or more of the industries of the businesses proposed
to be separated, and changes in the regulatory or legal environment and
requirement to redeem $12.7 billion of DowDuPont notes if the Intended
Business Separations are abandoned or delayed beyond May 1, 2020; (iv)
potential liability arising from fraudulent conveyance and similar laws
in connection with the separations and distributions; (v) disruptions or
business uncertainty, including from the Intended Business Separations,
could adversely impact DowDuPont’s business (either directly or as
conducted by and through Historical Dow or Historical DuPont), or
financial performance and its ability to retain and hire key personnel;
(vi) uncertainty as to the long-term value of DowDuPont common stock;
(vii) potential inability to access the capital markets; and (viii)
risks to DowDuPont’s, Historical Dow’s and Historical DuPont’s business,
operations and results of operations from: the availability of and
fluctuations in the cost of feedstocks and energy; balance of supply and
demand and the impact of balance on prices; failure to develop and
market new products and optimally manage product life cycles; ability,
cost and impact on business operations, including the supply chain, of
responding to changes in market acceptance, rules, regulations and
policies and failure to respond to such changes; outcome of significant
litigation, environmental matters and other commitments and
contingencies; failure to appropriately manage process safety and
product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange rates;
changes in political conditions, including trade disputes and
retaliatory actions; business or supply disruptions; security threats,
such as acts of sabotage, terrorism or war, natural disasters and
weather events and patterns which could result in a significant
operational event for the DowDuPont, adversely impact demand or
production; ability to discover, develop and protect new technologies
and to protect and enforce the DowDuPont’s intellectual property rights;
failure to effectively manage acquisitions, divestitures, alliances,
joint ventures and other portfolio changes; unpredictability and
severity of catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as management’s
response to any of the aforementioned factors. These risks are and will
be more fully discussed in DowDuPont’s current, quarterly and annual
reports and other filings made with the U. S. Securities and Exchange
Commission (the “Commission”) as well as the preliminary registration
statements on Form 10 of each of Dow and Corteva, in each case as may be
amended from time to time in future filings with the Commission. While
the list of factors presented here is considered representative, no such
list should be considered to be a complete statement of all potential
risks and uncertainties. Unlisted factors may present significant
additional obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with those
anticipated in the forward-looking statements could include, among other
things, business disruption, operational problems, financial loss, legal
liability to third parties and similar risks, any of which could have a
material adverse effect on DowDuPont’s, Historical Dow’s, Historical
DuPont’s, Dow’s or Corteva’ s consolidated financial condition, results
of operations, credit rating or liquidity. None of DowDuPont, Historical
Dow, Historical DuPont, Dow or Corteva assumes any obligation to
publicly provide revisions or updates to any forward-looking statements
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise required by
securities and other applicable laws. A detailed discussion of some of
the significant risks and uncertainties which may cause results and
events to differ materially from such forward-looking statements is
included in the section titled “Risk Factors” (Part I, Item 1A) of the
201[8] annual reports on Form 10-K of each of DowDuPont, Historical Dow
and Historical DuPont and as set forth in the preliminary registration
statements on Form 10 of each of Dow and Corteva, in each case as may be
amended from time to time in future filings with the Commission.
Organic Sales
Net Sales on an organic basis excludes impacts of currency and portfolio.
Trademarks
We own or have rights to various trademarks, service marks and trade
names that we use in connection with the operation of our business. The
Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all
products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks,
service marks or registered trademarks of The Dow Chemical Company, E.
I. du Pont de Nemours and Company, DowDuPont Inc. or their respective
subsidiaries or affiliates. Solely for convenience, the trademarks,
service marks and trade names referred to in this communication may
appear without the ™, ℠ or ® symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the
fullest extent under applicable law, our rights or the right of the
applicable licensor to these trademarks, service marks and trade names.
This communication may also contain trademarks, service marks and trade
names of certain third parties, which are the property of their
respective owners. Our use or display of third parties’ trademarks,
service marks, trade names or products in this communication is not
intended to, and should not be read to, imply a relationship with or
endorsement or sponsorship of us.
Correct use of marks should be confirmed with business as appropriate.
Copyright
©2019 DowDuPont. All rights reserved
Merger of Equals
Effective August 31, 2017, pursuant to the merger of equals transaction
contemplated by the Agreement and Plan of Merger, dated as of December
11, 2015, as amended on March 31, 2017 (the "Merger Agreement"), The Dow
Chemical Company ("Historical Dow") and E. I. du Pont de Nemours &
Company ("Historical DuPont") each merged with subsidiaries of DowDuPont
Inc. ("DowDuPont" or the "Company") and, as a result, Historical Dow and
Historical DuPont became subsidiaries of DowDuPont Inc. (the "Merger").
Historical Dow was determined to be the accounting acquirer in the
Merger and, as a result, the financial statements of Historical Dow,
prepared under U.S. generally accepted accounting principles ("U.S.
GAAP"), for the periods prior to the Merger are considered to be the
historical financial statements of DowDuPont.
Unaudited Pro Forma Financial Information
In order to provide the most meaningful comparison of results of
operations and results by segment, supplemental unaudited pro forma
financial information has been included in the following financial
schedules. The unaudited pro forma financial information is based on the
historical consolidated financial statements and accompanying notes of
both Historical Dow and Historical DuPont and has been prepared to
illustrate the effects of the Merger, assuming the Merger had been
consummated on January 1, 2016. For the twelve months ended December 31,
2017, pro forma adjustments have been made for (1) the purchase
accounting impact, (2) accounting policy alignment, (3) the elimination
of the effect of events that are directly attributable to the Merger
Agreement (e.g., one-time transaction costs), (4) the elimination of the
impact of transactions between Historical Dow and Historical DuPont, and
(5) the elimination of the effect of consummated divestitures agreed to
with certain regulatory agencies as a condition of approval for the
Merger. The unaudited pro forma financial information was based on and
should be read in conjunction with the separate historical financial
statements and accompanying notes contained in each of the Historical
Dow and Historical DuPont Annual Reports on Form 10-K for the year ended
December 31, 2017. The pro forma financial information was prepared in
accordance with Article 11 of Regulation S-X. The results for the three
months ended December 31, 2018 and 2017 and the twelve months ended
December 31, 2018, are presented on a U.S. GAAP basis.
The unaudited pro forma financial information has been presented for
informational purposes only and is not necessarily indicative of what
DowDuPont's results of operations actually would have been had the
Merger been completed as of January 1, 2016, nor is it indicative of the
future operating results of DowDuPont. The unaudited pro forma
information does not reflect restructuring or integration activities or
other costs following the Merger that may be incurred to achieve cost or
growth synergies of DowDuPont and does not reflect measurement period
adjustments subsequent to the Merger. For further information on the
unaudited pro forma financial information, please refer to the Company's
Current Report on Form 8-K dated October 26, 2017.
Non-GAAP Financial Measures
This earnings release includes information that does not conform to U.S.
GAAP and are considered non-GAAP measures. These measures include the
Company's pro forma consolidated results and pro forma earnings per
share on an adjusted basis. Management uses these measures internally
for planning, forecasting and evaluating the performance of the
Company's segments, including allocating resources. DowDuPont's
management believes that these non-GAAP measures best reflect the
ongoing performance of the Company during the periods presented and
provide more relevant and meaningful information to investors as they
provide insight with respect to ongoing operating results of the Company
and a more useful comparison of year-over-year results. These non-GAAP
measures supplement the Company's U.S. GAAP disclosures and should not
be viewed as an alternative to U.S. GAAP measures of performance.
Furthermore, such non-GAAP measures may not be consistent with similar
measures provided or used by other companies. Non-GAAP measures included
in this release are defined below. Reconciliations for these non-GAAP
measures to U.S. GAAP are provided in the Selected Financial Information
and Non-GAAP Measures starting on page 15. DowDuPont does not provide
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
pending litigation, unusual gains and losses, foreign currency exchange
gains or losses and potential future asset impairments, as well as
discrete taxable events, without unreasonable effort. These items are
uncertain, depend on various factors, and could have a material impact
on U.S. GAAP results for the guidance period.
Adjusted earnings per share is defined as "Earnings per common share
from continuing operations - diluted" excluding the after-tax impact of
significant items and the after-tax impact of amortization expense
associated with Historical DuPont's intangible assets. Pro forma
adjusted earnings per share is defined as "Pro Forma earnings per common
share from continuing operations - diluted" excluding the after-tax
impact of pro forma significant items and the after-tax impact of pro
forma amortization expense associated with Historical DuPont's
intangible assets. Although amortization of Historical DuPont's
intangible assets is excluded from these non-GAAP measures, management
believes it is important for investors to understand that such
intangible assets contribute to revenue generation. Amortization of
intangible assets that relate to past acquisitions will recur in future
periods until such intangible assets have been fully amortized. Any
future acquisitions may result in amortization of additional intangible
assets.
Operating EBITDA is defined as earnings (i.e., "Income from continuing
operations before income taxes") before interest, depreciation,
amortization and foreign exchange gains (losses), excluding the impact
of significant items. Pro forma operating EBITDA is defined as pro forma
earnings (i.e., "Pro Forma income from continuing operations before
income taxes") before interest, depreciation, amortization and foreign
exchange gains (losses), excluding the impact of significant items.
Discussion of segment revenue, operating EBITDA and price/volume metrics
on a divisional basis for Agriculture is based on the results of the
Agriculture segment; for Materials Science is based on the combined
results of the Performance Materials & Coatings segment, the Industrial
Intermediates & Infrastructure segment and the Packaging & Specialty
Plastics segment; and for Specialty Products is based on the combined
results of the Electronics & Imaging segment, the Nutrition &
Biosciences segment, the Transportation & Advanced Polymers segment and
the Safety & Construction segment. The Corporate segment is not included
in the division metrics. The segment disclosures have been presented in
this manner for informational purposes only and should not be viewed as
an indication of each division’s current or future operating results on
a standalone basis assuming completion of the Intended Business
Separations.
|
|
|
|
|
|
|
|
DowDuPont Inc.
|
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
(In millions, except per share amounts) Unaudited
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
Dec 31,
2018
|
|
|
Dec 31,
2017
|
|
|
Dec 31,
2018
|
|
|
Dec 31,
2017
|
Net sales
|
|
|
|
$
|
20,099
|
|
|
|
$
|
20,066
|
|
|
|
$
|
85,977
|
|
|
|
$
|
62,484
|
|
Cost of sales
|
|
|
|
15,567
|
|
|
|
16,650
|
|
|
|
65,333
|
|
|
|
49,791
|
|
Research and development expenses
|
|
|
|
749
|
|
|
|
786
|
|
|
|
3,060
|
|
|
|
2,141
|
|
Selling, general and administrative expenses
|
|
|
|
1,566
|
|
|
|
1,584
|
|
|
|
6,709
|
|
|
|
4,064
|
|
Amortization of intangibles
|
|
|
|
479
|
|
|
|
457
|
|
|
|
1,903
|
|
|
|
1,013
|
|
Restructuring, goodwill impairment and asset related charges - net
|
|
|
|
364
|
|
|
|
3,114
|
|
|
|
1,105
|
|
|
|
3,280
|
|
Integration and separation costs
|
|
|
|
782
|
|
|
|
502
|
|
|
|
2,463
|
|
|
|
1,101
|
|
Equity in earnings of nonconsolidated affiliates
|
|
|
|
316
|
|
|
|
362
|
|
|
|
1,001
|
|
|
|
764
|
|
Sundry income (expense) - net
|
|
|
|
252
|
|
|
|
145
|
|
|
|
592
|
|
|
|
417
|
|
Interest expense and amortization of debt discount
|
|
|
|
432
|
|
|
|
354
|
|
|
|
1,504
|
|
|
|
1,082
|
|
Income (Loss) from continuing operations before income taxes
|
|
|
|
728
|
|
|
|
(2,874
|
)
|
|
|
5,493
|
|
|
|
1,193
|
|
Provision (Credit) for income taxes on continuing operations
|
|
|
|
215
|
|
|
|
(1,715
|
)
|
|
|
1,489
|
|
|
|
(476
|
)
|
Income (Loss) from continuing operations, net of tax
|
|
|
|
513
|
|
|
|
(1,159
|
)
|
|
|
4,004
|
|
|
|
1,669
|
|
Loss from discontinued operations, net of tax
|
|
|
|
—
|
|
|
|
(57
|
)
|
|
|
(5
|
)
|
|
|
(77
|
)
|
Net income (loss)
|
|
|
|
513
|
|
|
|
(1,216
|
)
|
|
|
3,999
|
|
|
|
1,592
|
|
Net income attributable to noncontrolling interests
|
|
|
|
38
|
|
|
|
47
|
|
|
|
155
|
|
|
|
132
|
|
Net income (loss) available for DowDuPont Inc. common stockholders
|
|
|
|
$
|
475
|
|
|
|
$
|
(1,263
|
)
|
|
|
$
|
3,844
|
|
|
|
$
|
1,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per common share from continuing operations - basic
|
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.52
|
)
|
|
|
$
|
1.66
|
|
|
|
$
|
0.97
|
|
Loss per common share from discontinued operations - basic
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.05
|
)
|
Earnings (Loss) per common share - basic
|
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.54
|
)
|
|
|
$
|
1.66
|
|
|
|
$
|
0.92
|
|
Earnings (Loss) per common share from continuing operations - diluted
|
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.52
|
)
|
|
|
$
|
1.65
|
|
|
|
$
|
0.95
|
|
Loss per common share from discontinued operations - diluted
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.04
|
)
|
Earnings (Loss) per common share - diluted
|
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.54
|
)
|
|
|
$
|
1.65
|
|
|
|
$
|
0.91
|
|
|
Weighted-average common shares outstanding - basic
|
|
|
|
2,282.1
|
|
|
|
2,326.9
|
|
|
|
2,301.0
|
|
|
|
1,579.8
|
|
Weighted-average common shares outstanding - diluted
|
|
|
|
2,292.9
|
|
|
|
2,326.9
|
|
|
|
2,315.5
|
|
|
|
1,598.1
|
|
Note:
|
The consolidated statements of income for the three months ended
December 31, 2018 and 2017 and the twelve months ended December 31,
2018, reflect the results of Historical Dow and Historical DuPont.
The consolidated statements of income for the twelve months ended
December 31, 2017, reflect the results of Historical Dow for all
periods and the results of Historical DuPont for the period
beginning on and after September 1, 2017.
|
|
|
|
|
|
|
|
|
|
DowDuPont Inc.
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
(In millions, except share amounts) Unaudited
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (variable interest entities restricted -
2018: $82; 2017: $107)
|
|
|
|
$
|
13,482
|
|
|
|
|
$
|
13,438
|
|
Marketable securities
|
|
|
|
134
|
|
|
|
|
956
|
|
Accounts and notes receivable:
|
|
|
|
|
|
|
|
|
Trade (net of allowance for doubtful receivables - 2018: $191; 2017:
$127)
|
|
|
|
12,376
|
|
|
|
|
11,314
|
|
Other
|
|
|
|
4,963
|
|
|
|
|
5,579
|
|
Inventories
|
|
|
|
16,621
|
|
|
|
|
16,992
|
|
Other current assets
|
|
|
|
2,027
|
|
|
|
|
1,614
|
|
Total current assets
|
|
|
|
49,603
|
|
|
|
|
49,893
|
|
Investments
|
|
|
|
|
|
|
|
|
Investment in nonconsolidated affiliates
|
|
|
|
5,204
|
|
|
|
|
5,336
|
|
Other investments (investments carried at fair value - 2018: $1,699;
2017: $1,512)
|
|
|
|
2,701
|
|
|
|
|
2,564
|
|
Noncurrent receivables
|
|
|
|
477
|
|
|
|
|
680
|
|
Total investments
|
|
|
|
8,382
|
|
|
|
|
8,580
|
|
Property
|
|
|
|
|
|
|
|
|
Property
|
|
|
|
75,343
|
|
|
|
|
73,304
|
|
Less accumulated depreciation
|
|
|
|
39,495
|
|
|
|
|
37,057
|
|
Net property (variable interest entities restricted - 2018: $734;
2017: $907)
|
|
|
|
35,848
|
|
|
|
|
36,247
|
|
Other Assets
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
59,032
|
|
|
|
|
59,527
|
|
Other intangible assets (net of accumulated amortization - 2018:
$7,414; 2017: $5,550)
|
|
|
|
30,965
|
|
|
|
|
33,274
|
|
Deferred income tax assets
|
|
|
|
1,724
|
|
|
|
|
1,869
|
|
Deferred charges and other assets
|
|
|
|
2,476
|
|
|
|
|
2,774
|
|
Total other assets
|
|
|
|
94,197
|
|
|
|
|
97,444
|
|
Total Assets
|
|
|
|
$
|
188,030
|
|
|
|
|
$
|
192,164
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Notes payable
|
|
|
|
$
|
2,165
|
|
|
|
|
$
|
1,948
|
|
Long-term debt due within one year
|
|
|
|
637
|
|
|
|
|
2,067
|
|
Accounts payable:
|
|
|
|
|
|
|
|
|
Trade
|
|
|
|
9,457
|
|
|
|
|
9,134
|
|
Other
|
|
|
|
3,656
|
|
|
|
|
3,727
|
|
Income taxes payable
|
|
|
|
857
|
|
|
|
|
843
|
|
Accrued and other current liabilities
|
|
|
|
7,943
|
|
|
|
|
8,409
|
|
Total current liabilities
|
|
|
|
24,715
|
|
|
|
|
26,128
|
|
Long-Term Debt (variable interest entities nonrecourse - 2018: $75;
2017: $249)
|
|
|
|
37,662
|
|
|
|
|
30,056
|
|
Other Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
|
5,435
|
|
|
|
|
6,266
|
|
Pension and other postretirement benefits - noncurrent
|
|
|
|
15,909
|
|
|
|
|
18,581
|
|
Asbestos-related liabilities - noncurrent
|
|
|
|
1,142
|
|
|
|
|
1,237
|
|
Other noncurrent obligations
|
|
|
|
6,988
|
|
|
|
|
7,969
|
|
Total other noncurrent liabilities
|
|
|
|
29,474
|
|
|
|
|
34,053
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Common stock (authorized 5,000,000,000 shares of $0.01 par value
each;
issued 2018: 2,352,430,301 shares; 2017: 2,341,455,518 shares)
|
|
|
|
24
|
|
|
|
|
23
|
|
Additional paid-in capital
|
|
|
|
81,960
|
|
|
|
|
81,257
|
|
Retained earnings
|
|
|
|
30,536
|
|
|
|
|
29,211
|
|
Accumulated other comprehensive loss
|
|
|
|
(12,394
|
)
|
|
|
|
(8,972
|
)
|
Unearned ESOP shares
|
|
|
|
(134
|
)
|
|
|
|
(189
|
)
|
Treasury stock at cost (2018: 83,452,554 shares; 2017: 14,123,049
shares)
|
|
|
|
(5,421
|
)
|
|
|
|
(1,000
|
)
|
DowDuPont's stockholders' equity
|
|
|
|
94,571
|
|
|
|
|
100,330
|
|
Noncontrolling interests
|
|
|
|
1,608
|
|
|
|
|
1,597
|
|
Total equity
|
|
|
|
96,179
|
|
|
|
|
101,927
|
|
Total Liabilities and Equity
|
|
|
|
$
|
188,030
|
|
|
|
|
$
|
192,164
|
|
|
|
|
|
|
DowDuPont Inc.
|
Pro Forma Consolidated Statements of Income
|
|
|
|
|
|
In millions, except per share amounts (Unaudited)
|
|
|
|
Twelve Months Ended
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
As Reported
|
|
|
|
Pro Forma
|
Net sales
|
|
|
|
$
|
85,977
|
|
|
|
|
$
|
79,535
|
|
Cost of sales 1 |
|
|
|
65,333
|
|
|
|
|
60,184
|
|
Research and development expenses 1 |
|
|
|
3,060
|
|
|
|
|
3,146
|
|
Selling, general and administrative expenses 1 |
|
|
|
6,709
|
|
|
|
|
6,735
|
|
Amortization of intangibles
|
|
|
|
1,903
|
|
|
|
|
1,743
|
|
Restructuring, goodwill impairment and asset related charges - net
|
|
|
|
1,105
|
|
|
|
|
3,593
|
|
Integration and separation costs
|
|
|
|
2,463
|
|
|
|
|
1,499
|
|
Equity in earnings of nonconsolidated affiliates
|
|
|
|
1,001
|
|
|
|
|
804
|
|
Sundry income (expense) - net 1 |
|
|
|
592
|
|
|
|
|
127
|
|
Interest expense and amortization of debt discount
|
|
|
|
1,504
|
|
|
|
|
1,256
|
|
Income from continuing operations before income taxes
|
|
|
|
$
|
5,493
|
|
|
|
|
$
|
2,310
|
|
Provision (Credit) for income taxes on continuing operations
|
|
|
|
1,489
|
|
|
|
|
(602
|
)
|
Income from continuing operations, net of tax
|
|
|
|
$
|
4,004
|
|
|
|
|
$
|
2,912
|
|
Net income attributable to noncontrolling interests
|
|
|
|
155
|
|
|
|
|
159
|
|
Net income from continuing operations available for DowDuPont Inc.
common stockholders
|
|
|
|
$
|
3,849
|
|
|
|
|
$
|
2,753
|
|
|
|
|
|
|
|
|
|
|
Per common share data:
|
|
|
|
|
|
|
|
|
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
1.66
|
|
|
|
|
$
|
1.18
|
|
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
1.65
|
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic
|
|
|
|
2,301.0
|
|
|
|
|
2,323.9
|
|
Weighted-average common shares outstanding - diluted
|
|
|
|
2,315.5
|
|
|
|
|
2,346.1
|
|
1.
|
|
Amounts shown in the pro forma consolidated statements of income for
the twelve months ended December 31, 2017, have been updated from
the Company's Current Report on Form 8-K dated October 26, 2017, to
reflect reclassifications required under Accounting Standards Update
2017-07, "Compensation - Retirement Benefits (Topic 715): Improving
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost," which was adopted on January 1, 2018,
and required retrospective application.
|
|
|
|
|
|
|
|
|
DowDuPont Inc.
|
Pro Forma Net Sales by Segment and Geographic Region
|
|
|
|
|
|
|
|
|
Net Sales by Segment and Geographic Region
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
In millions (Unaudited)
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
Pro Forma
|
Agriculture
|
|
|
$
|
2,817
|
|
|
|
|
$
|
2,787
|
|
|
|
|
$
|
14,301
|
|
|
|
|
$
|
14,342
|
Performance Materials & Coatings
|
|
|
2,196
|
|
|
|
|
2,210
|
|
|
|
|
9,575
|
|
|
|
|
8,768
|
Industrial Intermediates & Infrastructure
|
|
|
3,695
|
|
|
|
|
3,554
|
|
|
|
|
15,116
|
|
|
|
|
12,640
|
Packaging & Specialty Plastics
|
|
|
5,868
|
|
|
|
|
6,092
|
|
|
|
|
24,096
|
|
|
|
|
22,392
|
Electronics & Imaging
|
|
|
1,169
|
|
|
|
|
1,193
|
|
|
|
|
4,720
|
|
|
|
|
4,775
|
Nutrition & Biosciences
|
|
|
1,628
|
|
|
|
|
1,581
|
|
|
|
|
6,801
|
|
|
|
|
5,952
|
Transportation & Advanced Polymers
|
|
|
1,319
|
|
|
|
|
1,297
|
|
|
|
|
5,620
|
|
|
|
|
5,131
|
Safety & Construction
|
|
|
1,341
|
|
|
|
|
1,290
|
|
|
|
|
5,453
|
|
|
|
|
5,142
|
Corporate
|
|
|
66
|
|
|
|
|
62
|
|
|
|
|
295
|
|
|
|
|
393
|
Total
|
|
|
$
|
20,099
|
|
|
|
|
$
|
20,066
|
|
|
|
|
$
|
85,977
|
|
|
|
|
$
|
79,535
|
U.S. & Canada
|
|
|
$
|
6,891
|
|
|
|
|
$
|
7,034
|
|
|
|
|
$
|
32,090
|
|
|
|
|
$
|
30,986
|
EMEA 1 |
|
|
5,471
|
|
|
|
|
5,584
|
|
|
|
|
24,371
|
|
|
|
|
21,932
|
Asia Pacific
|
|
|
5,132
|
|
|
|
|
4,893
|
|
|
|
|
20,416
|
|
|
|
|
17,906
|
Latin America
|
|
|
2,605
|
|
|
|
|
2,555
|
|
|
|
|
9,100
|
|
|
|
|
8,711
|
Total
|
|
|
$
|
20,099
|
|
|
|
|
$
|
20,066
|
|
|
|
|
$
|
85,977
|
|
|
|
|
$
|
79,535
|
|
|
|
|
|
|
|
Net Sales Variance by Segment,
Geographic Region
and Division
|
|
Three Months Ended Dec 31, 2018
|
|
|
|
Twelve Months Ended Dec 31, 2018
2
|
|
Local
Price &
Product
Mix
|
|
|
|
Currency
|
|
|
|
Volume
|
|
|
|
Portfolio
/ Other
3
|
|
|
|
Total
|
|
|
|
Local
Price &
Product
Mix
|
|
|
|
Currency
|
|
|
|
Volume
|
|
|
|
Portfolio
/ Other
3
|
|
|
|
Total
|
Percent change from prior year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
5
|
%
|
|
|
|
(5)
|
%
|
|
|
|
4
|
%
|
|
|
|
(3)
|
%
|
|
|
|
1
|
%
|
|
|
|
3
|
%
|
|
|
|
—
|
%
|
|
|
|
(2)
|
%
|
|
|
|
(1)
|
%
|
|
|
|
—
|
%
|
Performance Materials & Coatings
|
|
7
|
|
|
|
|
(2)
|
|
|
|
|
(6)
|
|
|
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
10
|
|
|
|
|
1
|
|
|
|
|
(2)
|
|
|
|
|
—
|
|
|
|
|
9
|
|
Industrial Intermediates & Infrastructure
|
|
(2
|
)
|
|
|
|
(2)
|
|
|
|
|
8
|
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
5
|
|
|
|
|
1
|
|
|
|
|
14
|
|
|
|
|
—
|
|
|
|
|
20
|
|
Packaging & Specialty Plastics
|
|
(3
|
)
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(4)
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
5
|
|
|
|
|
—
|
|
|
|
|
8
|
|
Electronics & Imaging
|
|
(2
|
)
|
|
|
|
(1)
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
(1)
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
(2)
|
|
|
|
|
(1)
|
|
Nutrition & Biosciences
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
3
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
9
|
|
|
|
|
14
|
|
Transportation & Advanced Polymers
|
|
8
|
|
|
|
|
(1)
|
|
|
|
|
(5)
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
6
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
10
|
|
Safety & Construction
|
|
3
|
|
|
|
|
(1)
|
|
|
|
|
3
|
|
|
|
|
(1
|
)
|
|
|
|
4
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
|
6
|
|
Total
|
|
1
|
%
|
|
|
|
(2)
|
%
|
|
|
|
1
|
%
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
|
3
|
%
|
|
|
|
1
|
%
|
|
|
|
4
|
%
|
|
|
|
—
|
%
|
|
|
|
8
|
%
|
U.S. & Canada
|
|
1
|
%
|
|
|
|
—
|
%
|
|
|
|
(3)
|
%
|
|
|
|
—
|
%
|
|
|
|
(2)
|
%
|
|
|
|
3
|
%
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
|
1
|
%
|
|
|
|
4
|
%
|
EMEA 1 |
|
1
|
|
|
|
|
(2)
|
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
11
|
|
Asia Pacific
|
|
(1
|
)
|
|
|
|
(2)
|
|
|
|
|
8
|
|
|
|
|
—
|
|
|
|
|
5
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
11
|
|
|
|
|
—
|
|
|
|
|
14
|
|
Latin America
|
|
1
|
|
|
|
|
(5)
|
|
|
|
|
9
|
|
|
|
|
(3)
|
|
|
|
|
2
|
|
|
|
|
4
|
|
|
|
|
(3)
|
|
|
|
|
4
|
|
|
|
|
(1)
|
|
|
|
|
4
|
|
Total
|
|
1
|
%
|
|
|
|
(2)
|
%
|
|
|
|
1
|
%
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
|
3
|
%
|
|
|
|
1
|
%
|
|
|
|
4
|
%
|
|
|
|
—
|
%
|
|
|
|
8
|
%
|
Agriculture
|
|
5
|
%
|
|
|
|
(5)
|
%
|
|
|
|
4
|
%
|
|
|
|
(3
|
)%
|
|
|
|
1
|
%
|
|
|
|
3
|
%
|
|
|
|
—
|
%
|
|
|
|
(2)
|
%
|
|
|
|
(1)
|
%
|
|
|
|
—
|
%
|
Materials Science
|
|
(1
|
)
|
|
|
|
(1)
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
4
|
|
|
|
|
1
|
|
|
|
|
6
|
|
|
|
|
—
|
|
|
|
|
11
|
|
Specialty Products
|
|
2
|
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
2
|
|
|
|
|
8
|
|
Total
|
|
1
|
%
|
|
|
|
(2)
|
%
|
|
|
|
1
|
%
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
|
3
|
%
|
|
|
|
1
|
%
|
|
|
|
4
|
%
|
|
|
|
—
|
%
|
|
|
|
8
|
%
|
1.
|
|
Europe, Middle East and Africa.
|
2.
|
|
As reported net sales in the current period compared with pro forma
net sales in the prior period.
|
3.
|
|
Pro forma net sales for Agriculture excludes sales related to the
November 30, 2017, divestiture of a portion of Historical Dow
AgroSciences' corn seed business in Brazil for the period January 1,
2017 through August 31, 2017. Sales from September 1, 2017 through
November 30, 2017, are included in Portfolio & Other. Pro forma net
sales for Packaging & Specialty Plastics excludes sales related to
the September 1, 2017, divestiture of the global Ethylene Acrylic
Acid ("EAA") copolymers and ionomers business for the period January
1, 2017 through August 31, 2017. Portfolio & Other includes sales
for the acquisition of the H&N Business acquired on November 1,
2017, impacting Nutrition & Biosciences. Portfolio & Other also
reflects the following divestitures: SKC Haas Display Films group of
companies (divested June 30, 2017) and the authentication business
(divested on January 6, 2017), both impacting Electronics & Imaging;
and, the divestiture of the global food safety diagnostic business
(divested February 28, 2017), impacting Nutrition & Biosciences.
|
|
|
|
|
|
|
|
|
|
DowDuPont Inc.
|
Selected Financial Information and Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
by Segment
1
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
In millions (Unaudited)
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
Pro Forma
|
Agriculture
|
|
|
|
$
|
233
|
|
|
|
|
$
|
224
|
|
|
|
|
$
|
2,705
|
|
|
|
|
$
|
2,611
|
|
Performance Materials & Coatings
|
|
|
|
421
|
|
|
|
|
400
|
|
|
|
|
2,170
|
|
|
|
|
1,774
|
|
Industrial Intermediates & Infrastructure
|
|
|
|
553
|
|
|
|
|
677
|
|
|
|
|
2,543
|
|
|
|
|
2,282
|
|
Packaging & Specialty Plastics
|
|
|
|
1,104
|
|
|
|
|
1,274
|
|
|
|
|
4,926
|
|
|
|
|
4,698
|
|
Electronics & Imaging
|
|
|
|
685
|
|
|
|
|
581
|
|
|
|
|
1,902
|
|
|
|
|
1,840
|
|
Nutrition & Biosciences
|
|
|
|
367
|
|
|
|
|
352
|
|
|
|
|
1,632
|
|
|
|
|
1,296
|
|
Transportation & Advanced Polymers
|
|
|
|
389
|
|
|
|
|
365
|
|
|
|
|
1,702
|
|
|
|
|
1,319
|
|
Safety & Construction
|
|
|
|
343
|
|
|
|
|
286
|
|
|
|
|
1,427
|
|
|
|
|
1,194
|
|
Corporate
|
|
|
|
(178
|
)
|
|
|
|
(221
|
)
|
|
|
|
(714
|
)
|
|
|
|
(848
|
)
|
Total
|
|
|
|
$
|
3,917
|
|
|
|
|
$
|
3,938
|
|
|
|
|
$
|
18,293
|
|
|
|
|
$
|
16,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings (Losses) of Nonconsolidated
Affiliates
by Segment
2
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
In millions (Unaudited)
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
Pro Forma
|
Agriculture
|
|
|
|
$
|
1
|
|
|
|
|
$
|
4
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(5
|
)
|
Performance Materials & Coatings
|
|
|
|
—
|
|
|
|
|
9
|
|
|
|
|
4
|
|
|
|
|
40
|
|
Industrial Intermediates & Infrastructure
|
|
|
|
(15
|
)
|
|
|
|
71
|
|
|
|
|
284
|
|
|
|
|
172
|
|
Packaging & Specialty Plastics
|
|
|
|
37
|
|
|
|
|
59
|
|
|
|
|
287
|
|
|
|
|
194
|
|
Electronics & Imaging
|
|
|
|
288
|
|
|
|
|
217
|
|
|
|
|
412
|
|
|
|
|
375
|
|
Nutrition & Biosciences
|
|
|
|
4
|
|
|
|
|
3
|
|
|
|
|
16
|
|
|
|
|
19
|
|
Transportation & Advanced Polymers
|
|
|
|
(4
|
)
|
|
|
|
(3
|
)
|
|
|
|
—
|
|
|
|
|
7
|
|
Safety & Construction
|
|
|
|
5
|
|
|
|
|
3
|
|
|
|
|
24
|
|
|
|
|
18
|
|
Corporate
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
(26
|
)
|
|
|
|
(16
|
)
|
Total
|
|
|
|
$
|
316
|
|
|
|
|
$
|
362
|
|
|
|
|
$
|
1,001
|
|
|
|
|
$
|
804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of "Income (loss) from continuing
operations,
net of tax" to "Operating EBITDA"
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
In millions (Unaudited)
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
As Reported
|
|
|
|
Pro Forma
|
Income (loss) from continuing operations, net of tax
|
|
|
|
$
|
513
|
|
|
|
|
$
|
(1,159
|
)
|
|
|
|
$
|
4,004
|
|
|
|
|
$
|
2,912
|
|
+ Provision (Credit) for income taxes on continuing operations
|
|
|
|
215
|
|
|
|
|
(1,715
|
)
|
|
|
|
1,489
|
|
|
|
|
(602
|
)
|
Income (loss) from continuing operations before income taxes
|
|
|
|
$
|
728
|
|
|
|
|
$
|
(2,874
|
)
|
|
|
|
$
|
5,493
|
|
|
|
|
$
|
2,310
|
|
+ Depreciation and amortization
|
|
|
|
1,468
|
|
|
|
|
1,451
|
|
|
|
|
5,918
|
|
|
|
|
5,546
|
|
- Interest income 3 |
|
|
|
66
|
|
|
|
|
61
|
|
|
|
|
210
|
|
|
|
|
230
|
|
+ Interest expense and amortization of debt discount
|
|
|
|
432
|
|
|
|
|
354
|
|
|
|
|
1,504
|
|
|
|
|
1,256
|
|
- Foreign exchange gains (losses), net 3, 4 |
|
|
|
74
|
|
|
|
|
(79
|
)
|
|
|
|
(184
|
)
|
|
|
|
(457
|
)
|
EBITDA
|
|
|
|
$
|
2,488
|
|
|
|
|
$
|
(1,051
|
)
|
|
|
|
$
|
12,889
|
|
|
|
|
$
|
9,339
|
|
- Adjusted significant items 5 |
|
|
|
(1,429
|
)
|
|
|
|
(4,989
|
)
|
|
|
|
(5,404
|
)
|
|
|
|
(6,827
|
)
|
Operating EBITDA
|
|
|
|
$
|
3,917
|
|
|
|
|
$
|
3,938
|
|
|
|
|
$
|
18,293
|
|
|
|
|
$
|
16,166
|
|
1.
|
|
The Company uses Operating EBITDA (for the three months ended
December 31, 2018 and 2017 and the twelve months ended December 31,
2018) and Pro Forma Operating EBITDA (for the twelve month periods
ended December 31, 2017), as its measure of profit/loss for segment
reporting. The Company defines Operating EBITDA as earnings (i.e.,
“Income (loss) from continuing operations before income taxes”)
before interest, depreciation, amortization and foreign exchange
gains (losses), excluding the impact of significant items. Pro Forma
Operating EBITDA is defined as pro forma earnings (i.e., pro forma
“Income (loss) from continuing operations before income taxes”)
before interest, depreciation, amortization and foreign exchange
gains (losses), excluding the impact of adjusted significant items.
|
2.
|
|
Does not exclude the impact of significant items.
|
3.
|
|
Included in "Sundry income (expense) - net."
|
4.
|
|
Excludes a $50 million pretax foreign exchange loss significant item
related to adjustments to foreign currency exchange contracts for
the change in the U.S. tax rate during the twelve months ended
December 31, 2018.
|
5.
|
|
Adjusted significant items, excluding the impact of one-time
transaction costs directly attributable to the Merger and reflected
in the pro forma adjustments.
|
|
|
|
Cash Flows from Operating Activities Excluding the Impact of
ASU 2016-15
and Additional Interpretive Guidance
1
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
In millions
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
|
|
|
Dec 31, 2018
|
|
|
|
Dec 31, 2017
|
Cash flows from operating activities - Updated for impact of ASU
2016-15 and additional interpretive guidance (GAAP)
|
|
|
|
$
|
5,101
|
|
|
|
|
$
|
1,757
|
|
|
|
|
$
|
4,731
|
|
|
|
|
$
|
(765
|
)
|
Less: Impact of ASU 2016-15 and additional interpretive guidance
|
|
|
|
—
|
|
|
|
|
(2,473
|
)
|
|
|
|
(657
|
)
|
|
|
|
(9,462
|
)
|
Cash flows from operating activities - Excluding impact of ASU
2016-15 and additional interpretive guidance (non-GAAP)
|
|
|
|
$
|
5,101
|
|
|
|
|
$
|
4,230
|
|
|
|
|
$
|
5,388
|
|
|
|
|
$
|
8,697
|
|
1.
|
Reconciles cash flows from operating activities to cash flows from
operating activities excluding the impact of ASU 2016-15 and related
interpretive guidance as management believes this non-GAAP financial
measure is relevant and meaningful as it presents cash flows from
operating activities inclusive of all trade accounts receivable
collection activity, which the Company utilizes in support of its
operating activities.
|
|
DowDuPont Inc.
|
Selected Financial Information and Non-GAAP Measures
|
|
Significant Items Impacting Results for the Three Months Ended
Dec 31, 2018
|
In millions, except per share amounts (Unaudited)
|
|
|
|
Pretax
1
|
|
|
|
Net Income
2
|
|
|
|
EPS
3
|
|
|
|
Income Statement Classification
|
Reported results
|
|
|
|
$
|
728
|
|
|
|
|
$
|
475
|
|
|
|
|
$
|
0.21
|
|
|
|
|
|
Less: Significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization
|
|
|
|
(134
|
)
|
|
|
|
(114
|
)
|
|
|
|
(0.05
|
)
|
|
|
|
Cost of sales
|
Integration and separation costs
|
|
|
|
(782
|
)
|
|
|
|
(710
|
)
|
|
|
|
(0.31
|
)
|
|
|
|
Integration and separation costs
|
Restructuring and asset related charges - net
|
|
|
|
(368
|
)
|
|
|
|
(288
|
)
|
|
|
|
(0.13
|
)
|
|
|
|
Restructuring, goodwill impairment and asset related charges
- net ($364 million); Equity in earnings of
nonconsolidated affiliates ($4 million)
|
Loss on divestitures 4 |
|
|
|
(16
|
)
|
|
|
|
(15
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
Sundry income (expense) - net
|
Losses on early extinguishment of debt
|
|
|
|
(129
|
)
|
|
|
|
(99
|
)
|
|
|
|
(0.04
|
)
|
|
|
|
Sundry income (expense) - net
|
Income tax related items 5 |
|
|
|
—
|
|
|
|
|
(52
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
Provision for income taxes on continuing operations
|
Total significant items
|
|
|
|
$
|
(1,429
|
)
|
|
|
|
$
|
(1,278
|
)
|
|
|
|
$
|
(0.56
|
)
|
|
|
|
|
Less: Historical DuPont amortization of intangibles
|
|
|
|
(326
|
)
|
|
|
|
(258
|
)
|
|
|
|
(0.11
|
)
|
|
|
|
Amortization of intangibles
|
Adjusted results (non-GAAP)
|
|
|
|
$
|
2,483
|
|
|
|
|
$
|
2,011
|
|
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant Items Impacting Results for the Three Months Ended
Dec 31, 2017
|
In millions, except per share amounts (Unaudited)
|
|
|
|
Pretax
1
|
|
|
|
Net Income
2
|
|
|
|
EPS
3
|
|
|
|
Income Statement Classification
|
Reported results
|
|
|
|
$
|
(2,874
|
)
|
|
|
|
$
|
(1,206
|
)
|
|
|
|
$
|
(0.52
|
)
|
|
|
|
|
Less: Significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization
|
|
|
|
(1,116
|
)
|
|
|
|
(933
|
)
|
|
|
|
(0.40
|
)
|
|
|
|
Cost of sales ($1,109 million); Equity in earnings of
nonconsolidated affiliates ($7 million)
|
Integration and separation costs
|
|
|
|
(502
|
)
|
|
|
|
(351
|
)
|
|
|
|
(0.15
|
)
|
|
|
|
Integration and separation costs
|
Restructuring, goodwill impairment and asset related charges
- net
|
|
|
|
(3,114
|
)
|
|
|
|
(2,842
|
)
|
|
|
|
(1.21
|
)
|
|
|
|
Restructuring, goodwill impairment and asset related charges
- net
|
Gain on divestiture 6 |
|
|
|
635
|
|
|
|
|
419
|
|
|
|
|
0.18
|
|
|
|
|
Sundry income (expense) - net
|
Settlement of benefit plan obligations 7 |
|
|
|
(892
|
)
|
|
|
|
(594
|
)
|
|
|
|
(0.25
|
)
|
|
|
|
Cost of sales ($201 million); Selling, general and
administrative expenses ($4 million); Sundry income (expense)
- net ($687 million)
|
Income tax related items 8 |
|
|
|
—
|
|
|
|
|
1,347
|
|
|
|
|
0.57
|
|
|
|
|
Provision for income taxes on continuing operations
|
Total significant items
|
|
|
|
$
|
(4,989
|
)
|
|
|
|
$
|
(2,954
|
)
|
|
|
|
$
|
(1.26
|
)
|
|
|
|
|
Less: Historical DuPont amortization of intangibles
|
|
|
|
(300
|
)
|
|
|
|
(208
|
)
|
|
|
|
(0.09
|
)
|
|
|
|
Amortization of intangibles
|
Adjusted results (non-GAAP)
|
|
|
|
$
|
2,415
|
|
|
|
|
$
|
1,956
|
|
|
|
|
$
|
0.83
|
|
|
|
|
|
1.
|
|
"Income from continuing operations before income taxes."
|
2.
|
|
"Net income available for DowDuPont Inc. common stockholders"
excluding the impact of discontinued operations. 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.
|
|
Includes pretax losses relating to divestitures in Safety &
Construction ($14 million) and Agriculture ($2 million).
|
5.
|
|
Related to the effects of U.S. Tax Reform.
|
6.
|
|
Pretax gain related to the sale of a portion of Historical Dow
AgroSciences' corn seed business in Brazil.
|
7.
|
|
Pretax settlement charge related to the payment of plan obligations
to certain participants of a Historical Dow U.S. non-qualified
pension plan as a result of the Merger.
|
8.
|
|
Includes a net tax benefit of $1,086 million related to the
recognition of the effects of U.S. tax reform, as well as a net tax
benefit of $261 million related to an internal legal entity
restructuring associated with the intended business separations.
|
|
Significant Items Impacting Results for the Twelve Months Ended
Dec 31, 2018
|
In millions, except per share amounts (Unaudited)
|
|
|
|
Pretax
1
|
|
|
|
Net Income
2
|
|
|
|
EPS
3
|
|
|
|
Income Statement Classification
|
Reported results
|
|
|
|
$
|
5,493
|
|
|
|
|
$
|
3,849
|
|
|
|
|
$
|
1.65
|
|
|
|
|
|
Less: Significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization
|
|
|
|
(1,628
|
)
|
|
|
|
(1,359
|
)
|
|
|
|
(0.58
|
)
|
|
|
|
Cost of sales
|
Integration and separation costs
|
|
|
|
(2,463
|
)
|
|
|
|
(2,156
|
)
|
|
|
|
(0.93
|
)
|
|
|
|
Integration and separation costs
|
Restructuring and asset related charges - net
|
|
|
|
(1,109
|
)
|
|
|
|
(878
|
)
|
|
|
|
(0.38
|
)
|
|
|
|
Restructuring, goodwill impairment and
asset related charges - net ($1,105 million); Equity in
earnings of nonconsolidated affiliates ($4 million)
|
Net loss on divestitures and changes in joint venture ownership 4 |
|
|
|
(19
|
)
|
|
|
|
(23
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
Sundry income (expense) - net
|
Losses on early extinguishment of debt
|
|
|
|
(135
|
)
|
|
|
|
(104
|
)
|
|
|
|
(0.04
|
)
|
|
|
|
Sundry income (expense) - net
|
Income tax related items 5 |
|
|
|
(50
|
)
|
|
|
|
(180
|
)
|
|
|
|
(0.08
|
)
|
|
|
|
Sundry income (expense) - net ($50 million); Provision for
income taxes on continuing operations ($180 million)
|
Total significant items
|
|
|
|
$
|
(5,404
|
)
|
|
|
|
$
|
(4,700
|
)
|
|
|
|
$
|
(2.02
|
)
|
|
|
|
|
Less: Historical DuPont amortization of intangibles
|
|
|
|
(1,284
|
)
|
|
|
|
(1,015
|
)
|
|
|
|
(0.44
|
)
|
|
|
|
Amortization of intangibles
|
Adjusted results (non-GAAP)
|
|
|
|
$
|
12,181
|
|
|
|
|
$
|
9,564
|
|
|
|
|
$
|
4.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant Items Impacting Pro Forma Results for the Twelve
Months Ended Dec 31, 2017
|
In millions, except per share amounts (Unaudited)
|
|
|
|
Pretax
1
|
|
|
|
Net Income
2
|
|
|
|
EPS
3
|
|
|
|
Income Statement Classification
|
Pro forma results
|
|
|
|
$
|
2,310
|
|
|
|
|
$
|
2,753
|
|
|
|
|
$
|
1.17
|
|
|
|
|
|
Less: Significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization
|
|
|
|
(1,483
|
)
|
|
|
|
(1,231
|
)
|
|
|
|
(0.53
|
)
|
|
|
|
Cost of sales ($1,469 million); Equity in earnings of
nonconsolidated affiliates ($14 million)
|
Litigation related charges, awards and judgments 6 |
|
|
|
(332
|
)
|
|
|
|
(215
|
)
|
|
|
|
(0.08
|
)
|
|
|
|
Sundry income (expense) - net
|
Integration and separation costs
|
|
|
|
(1,499
|
)
|
|
|
|
(1,028
|
)
|
|
|
|
(0.44
|
)
|
|
|
|
Integration and separation costs
|
Restructuring, goodwill impairment and asset related charges - net
|
|
|
|
(3,594
|
)
|
|
|
|
(3,161
|
)
|
|
|
|
(1.34
|
)
|
|
|
|
Restructuring, goodwill impairment and asset related charges
- net
|
Gains on divestitures 7 |
|
|
|
1,031
|
|
|
|
|
645
|
|
|
|
|
0.28
|
|
|
|
|
Sundry income (expense) - net
|
Settlement of benefit plan obligations 8 |
|
|
|
(892
|
)
|
|
|
|
(594
|
)
|
|
|
|
(0.25
|
)
|
|
|
|
Cost of sales ($201 million); Selling, general and
administrative expenses ($4 million); Sundry income (expense) -
net ($687 million)
|
Transaction costs and productivity actions
|
|
|
|
(58
|
)
|
|
|
|
(37
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
Cost of sales ($49 million); Selling, general and
administrative expenses ($9 million)
|
Income tax related items 9 |
|
|
|
—
|
|
|
|
|
1,151
|
|
|
|
|
0.48
|
|
|
|
|
Provision for income taxes on continuing operations
|
Total significant items
|
|
|
|
$
|
(6,827
|
)
|
|
|
|
$
|
(4,470
|
)
|
|
|
|
$
|
(1.90
|
)
|
|
|
|
|
Less: Historical DuPont amortization of intangibles
|
|
|
|
(1,119
|
)
|
|
|
|
(766
|
)
|
|
|
|
(0.33
|
)
|
|
|
|
Amortization of intangibles
|
Adjusted pro forma results (non-GAAP)
|
|
|
|
$
|
10,256
|
|
|
|
|
$
|
7,989
|
|
|
|
|
$
|
3.40
|
|
|
|
|
|
1.
|
|
"Income from continuing operations before income taxes" or pro forma
"Income from continuing operations before income taxes."
|
2.
|
|
"Net income available for DowDuPont Inc. common stockholders"
excluding the impact of discontinued operations, or pro forma "Net
income from continuing operations available for DowDuPont Inc.
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" or
pro forma "Earnings per common share from continuing operations -
diluted."
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4.
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Includes a $14 million pretax loss on a divestiture in Safety &
Construction, a $20 million pretax gain related to Historical Dow's
sale of its equity interest in MEGlobal, a net $22 million pretax
gain on Agriculture asset sales and a pretax loss of $47 million for
post-closing adjustments related to the Dow Silicones ownership
restructure.
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5.
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Includes $14 million of tax expense related to the effects of U.S.
Tax Reform, plus a $50 million pretax foreign exchange loss ($38
million tax expense) related to adjustments to foreign currency
exchange contracts for the change in the U.S. tax rate. Also
includes a tax valuation allowance recorded against the net deferred
tax asset position of a Brazilian legal entity ($75 million tax
expense), a tax charge related to the elimination of a tax benefit
resulting from Historical DuPont’s third quarter 2018 principal U.S.
pension plan discretionary contribution ($27 million tax expense)
and a tax charge related to an internal legal entity restructuring
associated with the Intended Business Separations ($26 million tax
expense).
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6.
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Reflects a pretax gain related to a Historical Dow patent
infringement matter with Nova Chemicals Corporation ($137 million)
and a pretax charge for Historical Dow AgroSciences' arbitration
matter with Bayer CropScience ($469 million).
|
7.
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|
Reflects pretax gains of $635 million related to the sale of a
portion of Historical Dow AgroSciences' corn seed business in
Brazil, $227 million related to the sale of Historical Dow's global
EAA copolymers and ionomers business, $162 million related to the
sale of Historical DuPont's global food safety diagnostics business
and $7 million related to post-closing adjustments on the 2015
split-off of Historical Dow's chlorine value chain.
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8.
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Pretax settlement charge related to the payment of plan obligations
to certain participants of a Historical Dow U.S. non-qualified
pension plan as a result of the Merger.
|
9.
|
|
Includes a net tax benefit of $1,086 million related to the
recognition of the effects of new U.S. tax legislation; a net tax
benefit of $261 million related to an internal legal entity
restructuring associated with the Intended Business Separations; tax
expense of $267 million related to changes in tax attributes
resulting from the Merger, including a reduction in a deferred tax
asset in Germany and the recognition of deferred tax gains in the
United States; tax expense of $29 million related to the elimination
of a Historical DuPont tax benefit recorded in 2016 due to
Historical DuPont's second quarter 2017 principal U.S. pension plan
contribution; and a tax benefit of $100 million related to a
reduction in Historical DuPont's unrecognized tax benefits and
reversal of associated interest due to the closure of various tax
statutes of limitations.
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View source version on businesswire.com:
https://www.businesswire.com/news/home/20190131005382/en/
Investors:
Jennifer Driscoll
jen.driscoll@dupont.com
+1
302-774-4994
Lori Koch
lori.d.koch@dupont.com
+1
302-774-4994
Neal Sheorey
nrsheorey@dow.com
+1
989-636-6347
Media:
Rachelle Schikorra
ryschikorra@dow.com
+1
989-638-4090
Dan Turner
daniel.a.turner@dupont.com
+1
302-996-8372
Source: DowDuPont