DUPONT E I DE NEMOURS & CO - FORM 8-K - EX-99.1 - EX - 99.1 - July 25, 2017

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Exhibit 99.1
image0a14.jpg
 
 
 
 
image1a12.jpg
 
 
 
 
 
 
July 25, 2017
 
 
 
Media Contact:
Dan Turner
WILMINGTON, Del.
 
 
 
 
302-996-8372
 
 
 
 
 
daniel.a.turner@dupont.com
 
 
 
 
Investor Contact:
302-774-4994

DuPont Reports Second-Quarter and First-Half Results

Volume Gains Drove 5-Percent Sales Growth

Segment Operating Margin Expansion Continued

Merger of Equals with Dow Expected to Close in August

Second-Quarter Highlights

•
GAAP1 earnings per share decreased 16 percent to $0.97 from $1.16 in prior year. Operating earnings2 per share increased 11 percent to $1.38 from $1.24 in prior year.

•
Sales of $7.4 billion increased 5 percent on a 6-percent benefit from volume partially offset by a 1-percent decline in local price. Volume grew in all reportable segments, primarily led by Agriculture, Electronics & Communications and Protection Solutions.
  
•
Segment operating margins expanded by about 80 basis points, led by improvements in Electronics & Communications, Industrial Biosciences and Agriculture.

First-Half Highlights

•
GAAP1 earnings per share decreased 2 percent to $2.50 from $2.55 in prior year. Operating earnings2 per share increased 21 percent to $3.02 from $2.50 in prior year.

•
Sales of $15.2 billion increased 5 percent driven by volume growth. Sales grew in most segments, led by Agriculture, Performance Materials and Electronics & Communications.

•
Agriculture sales increased 5 percent on a 5-percent benefit from volume and a 1-percent benefit from local price, partially offset by a 1-percent negative impact from portfolio. Volume growth was driven by a benefit from the timing of seed deliveries, including the route-to-market change in the southern U.S., increased insecticide and fungicide sales, higher soybean sales in North America, and increased sunflower and corn seed sales in Europe. This growth was partially offset by the expected decline in corn volume related to reduced corn area in North America.

•
Total company gross margin expanded by 45 basis points. Segment operating margins expanded by about 170 basis points, led by improvements in Electronics & Communications, Performance Materials and Agriculture.

•
Free cash flow3 improved by about $200 million, excluding about $2.8 billion of increased pension contributions.

    

1 Generally Accepted Accounting Principles (GAAP)
2 See schedules A, C, and D for definitions and reconciliations of non-GAAP measures.
3 Free cash flow is defined as cash used for operating activities less purchases of property, plant and equipment. See schedule A for reconciliation of non-GAAP measure.

E.I. du Pont de Nemours and Company

WILMINGTON, Del., July 25, 2017 - DuPont (NYSE: DD), a science company that brings world-class, innovative products, materials, and services to the global marketplace, today announced second-quarter 2017 GAAP1 earnings from continuing operations of $0.97 per share and operating earnings2 of $1.38 per share. Prior year GAAP1 and operating earnings2 were $1.16 per share and $1.24 per share, respectively. Refer to Schedule B for details of significant items excluded from operating earnings per share.

For first-half 2017, DuPont delivered GAAP1 earnings from continuing operations of $2.50 per share and operating earnings2 of $3.02 per share. Prior-year GAAP1 and operating earnings2 per share were $2.55 and $2.50, respectively.

Second-quarter sales totaled $7.4 billion, up 5 percent versus prior year on a 6-percent benefit from volume partially offset by a 1-percent decline in local price. Volume grew in all reportable segments, led by Agriculture, Electronics & Communications and Protection Solutions. First-half sales of $15.2 billion increased 5 percent versus prior year on a 5-percent benefit from volume. Sales grew in most segments, led by Agriculture, Performance Materials and Electronics & Communications. Agriculture sales were positively impacted by the change in timing of seed deliveries, including the southern U.S. route-to-market change, which benefitted first-half sales by approximately $200 million, or about 1 percent.

“Our increased operating earnings per share and strong sales growth of 5 percent were driven by volume growth from our highly productive innovation pipeline,” said Ed Breen, chairman and CEO of DuPont. “We continue to see the results of the focus, efficiency and productivity our teams are delivering as we move toward the expected August closing of the merger with Dow. Our integration planning will enable us to begin implementation quickly, including launching the projects to achieve our $3 billion cost synergies target, and move toward standing up the strong, independent companies we intend to create.”

Global Consolidated Net Sales - 2nd Quarter
 
 
Three Months Ended
 
 
 
 
 
 
June 30, 2017
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix
 
Currency
 
Volume
 
Portfolio/Other
U.S. & Canada
 
$
3,769

 
6

 
—

 
—

 
6

 
—

EMEA*
 
1,428

 
1

 
—

 
(2
)
 
3

 
—

Asia Pacific
 
1,705

 
10

 
(1
)
 
—

 
11

 
—

Latin America
 
522

 
(3
)
 
(4
)
 
2

 
(1
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Consolidated Net Sales
 
$
7,424

 
5

 
(1
)
 
—

 
6

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
* Europe, Middle East & Africa
 
 
 
 
 
 
 
 
 
 
 
 

2
3

Global Consolidated Net Sales - First Half
 
 
Six Months Ended
 
 
 
 
 
 
June 30, 2017
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix
 
Currency
 
Volume
 
Portfolio/Other
U.S. & Canada
 
$
7,345

 
3

 
—

 
—

 
3

 
—

EMEA*
 
3,538

 
3

 
1

 
(3
)
 
6

 
(1
)
Asia Pacific
 
3,156

 
11

 
(1
)
 
—

 
13

 
(1
)
Latin America
 
1,128

 
6

 
1

 
7

 
(2
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Consolidated Net Sales
 
$
15,167

 
5

 
—

 
—

 
5

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
* Europe, Middle East & Africa
 
 
 
 
 
 
 
 
 
 
 
 

Segment Net Sales - 2nd Quarter
 
 
Three Months Ended
 
 
 
 
June 30, 2017
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix
 
Currency
 
Volume
 
Portfolio/Other
Agriculture
 
$
3,446

 
7

 
(1
)
 
—

 
8

 
—

Electronics & Communications
 
546

 
11

 
(1
)
 
(1
)
 
13

 
—

Industrial Biosciences
 
395

 
11

 
3

 
(1
)
 
9

 
—

Nutrition & Health
 
818

 
(2
)
 
(1
)
 
(1
)
 
1

 
(1
)
Performance Materials
 
1,381

 
3

 
2

 
(1
)
 
2

 
—

Protection Solutions
 
801

 
2

 
(2
)
 
(1
)
 
5

 
—

Other
 
37

 
 
 
 
 
 
 
 
 
 
Consolidated Net Sales
 
$
7,424

 
5

 
(1
)
 
—

 
6

 
—



4

Segment Net Sales - First Half
 
 
Six Months Ended
 
 
 
 
June 30, 2017
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix
 
Currency
 
Volume
 
Portfolio/Other
Agriculture
 
$
7,374

 
5

 
1

 
—

 
5

 
(1
)
Electronics & Communications
 
1,056

 
12

 
(1
)
 
(1
)
 
14

 
—

Industrial Biosciences
 
763

 
8

 
2

 
(1
)
 
7

 
—

Nutrition & Health
 
1,607

 
(2
)
 
—

 
(1
)
 
—

 
(1
)
Performance Materials
 
2,749

 
6

 
1

 
(1
)
 
6

 
—

Protection Solutions
 
1,548

 
2

 
(2
)
 
(1
)
 
5

 
—

Other
 
70

 
 
 
 
 
 
 
 
 
 
Consolidated Net Sales
 
$
15,167

 
5

 
—

 
—

 
5

 
—



Operating Earnings - 2nd Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Change vs. 2016
(Dollars in millions)
 
 
2Q17
 
2Q16
 
$
 
%
Agriculture
 
$
963

 
$
865

 
$
98

 
11
 %
Electronics & Communications
 
116

 
93

 
23

 
25
 %
Industrial Biosciences
 
76

 
62

 
14

 
23
 %
Nutrition & Health
 
135

 
130

 
5

 
4
 %
Performance Materials
 
329

 
325

 
4

 
1
 %
Protection Solutions
 
191

 
188

 
3

 
2
 %
Other
 
(53
)
 
(50
)
 
(3
)
 
-6
 %
Total segment operating earnings (4)
 
1,757

 
1,613

 
144

 
9
 %
 
 
 
 
 
 
 
 
 
Exchange gains (losses) (5)
 
(140
)
 
(15
)
 
(125
)
 
nm

Corporate expenses (4)
 
(51
)
 
(83
)
 
32

 
-39
 %
Interest expense
 
(99
)
 
(93
)
 
(6
)
 
6
 %
Operating earnings before income taxes (2)
 
1,467

 
1,422

 
45

 
3
 %
 
 
 
 
 
 
 
 
 
 
Provision for income taxes on operating earnings (2) (4)
 
(251
)
 
(325
)
 
74

 
 
Less: Net loss attributable to noncontrolling interests
 
7

 
4

 
3

 
 
Operating earnings (2)
 
$
1,209

 
$
1,093

 
$
116

 
11
 %
 
 
 
 
 
 
 
 
 
 
Operating earnings per share (2)
 
$
1.38

 
$
1.24

 
$
0.14

 
11
 %
GAAP (1) earnings per share
 
$
0.97

 
$
1.16

 
$
(0.19
)
 
-16
 %



5

Operating Earnings - First Half
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Change vs. 2016
(Dollars in millions)
 
 
YTD 2017
 
YTD 2016
 
$
 
%
Agriculture
 
$
2,199

 
$
1,966

 
$
233

 
12
 %
Electronics & Communications
 
205

 
152

 
53

 
35
 %
Industrial Biosciences
 
151

 
125

 
26

 
21
 %
Nutrition & Health
 
256

 
234

 
22

 
9
 %
Performance Materials
 
684

 
598

 
86

 
14
 %
Protection Solutions
 
368

 
364

 
4

 
1
 %
Other
 
(115
)
 
(109
)
 
(6
)
 
-6
 %
Total segment operating earnings (4)
 
3,748

 
3,330

 
418

 
13
 %
 
 
 
 
 
 
 
 
 
Exchange gains (losses) (5)
 
(199
)
 
(136
)
 
(63
)
 
nm

Corporate expenses (4)
 
(120
)
 
(169
)
 
49

 
-29
 %
Interest expense
 
(183
)
 
(185
)
 
2

 
-1
 %
Operating earnings before income taxes (2)
 
3,246

 
2,840

 
406

 
14
 %
 
 
 
 
 
 
 
 
 
 
Provision for income taxes on operating earnings (2) (4)
 
(589
)
 
(628
)
 
39

 
 
Less: Net loss attributable to noncontrolling interests
 
15

 
10

 
5

 
 
Operating earnings (2)
 
$
2,642

 
$
2,202

 
$
440

 
20
 %
 
 
 
 
 
 
 
 
 
 
Operating earnings per share (2)
 
$
3.02

 
$
2.50

 
$
0.52

 
21
 %
GAAP (1) earnings per share
 
$
2.50

 
$
2.55

 
$
(0.05
)
 
-2
 %
 
(4)  See Schedules B and C for listing of significant items and their impact by segment.
(5)  See Schedule D for additional information on exchange gains and losses.

6

The following is a summary of business results for each of the company’s reportable segments comparing the second quarter and first half with the prior year, unless otherwise noted.

Agriculture - Second-quarter 2017 operating earnings of $963 million increased $98 million, or 11 percent, on volume growth, partially offset by declines in local price and higher product costs. Volume growth was driven by increased insecticide and fungicide sales, a benefit from the southern U.S. route-to-market change and higher soybean sales in North America, driven by the increase in planted area. Reductions in local price reflected declines in crop protection and increased product costs mainly driven by higher soybean royalties. Operating margins expanded by about 105 basis points.
First-half operating earnings of $2,199 million increased $233 million, or 12 percent, on growth in volume and local price. Volume growth was driven by a benefit from the change in timing of seed deliveries including the southern U.S. route-to-market change, increased insecticide and fungicide sales, higher soybean sales in North America, and increased sunflower and corn seed sales in Europe. Volume growth was partially offset by the expected decline in corn volume related to reduced corn area in North America. Pricing growth was realized by double-digit increases in Brazil driven by the company’s newest corn hybrids and lower product cost within crop protection, partially offset by price declines in Latin America and Asia and higher soybean royalties. Operating margins expanded by about 175 basis points.
Electronics & Communications - Second-quarter 2017 operating earnings of $116 million increased $23 million, or 25 percent, as volume growth more than offset a decline in local price. Volume growth was due to increased demand in consumer electronics and semiconductor markets, as well as stronger photovoltaic sales. Operating margins expanded by about 240 basis points.
First-half operating earnings of $205 million increased $53 million, or 35 percent, on volume growth and the absence of a $16 million prior-year litigation expense, partially offset by lower local price. Operating earnings included a gain on the sale of a business offset by costs associated with a legal matter. Operating margins expanded by 335 basis points.
Industrial Biosciences - Second-quarter 2017 operating earnings of $76 million increased $14 million, or 23 percent, on volume growth and mix enrichment, partially offset by higher costs due to growth investments. Broad-based volume growth was driven by increased demand for biomaterials in apparel and carpeting, bioactives in the grain processing market, and CleanTech. Operating margins expanded by about 180 basis points.
First-half operating earnings of $151 million increased $26 million, or 21 percent, on volume growth and mix enrichment, partially offset by higher costs due to growth investments. Volume growth was driven by increased demand for biomaterials in apparel and carpeting and bioactives in the grain processing market. Operating margins expanded by about 210 basis points.
Nutrition & Health - Second-quarter 2017 operating earnings of $135 million increased $5 million, or 4 percent, on volume growth. Increased demand in probiotics was partially offset by declines in systems and texturants and protein solutions. Operating margins expanded by about 95 basis points.
First-half operating earnings of $256 million increased $22 million, or 9 percent, on plant productivity, mix enrichment and cost savings, partially offset by a $6 million negative impact from portfolio. Volume growth in probiotics was offset by declines in systems and texturants and protein solutions. Operating margins expanded by about 165 basis points.
Performance Materials - Second-quarter 2017 operating earnings of $329 million increased $4 million, or 1 percent, as volume growth, higher local price, and the absence of costs associated with a contractual claim were largely offset by higher raw material costs and the planned turnaround of the ethylene cracker. Increased demand for polymers in automotive markets and increased demand for high-performance parts in semiconductor and aerospace markets drove the higher volumes. Operating margins contracted by about 50 basis points.
First-half operating earnings of $684 million increased $86 million, or 14 percent, driven by volume growth, cost savings and the absence of costs associated with a contractual claim, partially offset by higher raw material costs and the planned turnaround of the ethylene cracker. Volume growth was driven by increased demand for polymers in automotive markets and high-performance parts in semiconductor and aerospace markets. Operating margins expanded by about 175 basis points.


7

Protection Solutions - Second-quarter 2017 operating earnings of $191 million increased $3 million, or 2 percent, as volume growth more than offset lower local price and product mix and higher costs due to growth investments. Volume growth reflected improved demand for Tyvek® protective material in medical packaging and protective apparel and Nomex® thermal-resistant fiber in oil and gas markets. Operating margins contracted by about 5 basis points.
First-half operating earnings of $368 million increased $4 million, or 1 percent, as volume growth was partially offset by lower local price and product mix as well as higher raw material costs. Volume growth was primarily driven by increased demand for Nomex® in oil and gas markets, Kevlar® high-strength materials, and Tyvek®. Operating margins contracted by about 25 basis points.

DuPont will hold a conference call and webcast on Tuesday, July 25, 2017, at 8:00 AM ET to discuss this news release. The webcast and additional presentation materials can be accessed by visiting the company’s investor website (Events & Presentations) at www.investors.dupont.com. A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 9189324#.  For additional information see the investor center at http://www.dupont.com.

Use of Non-GAAP Measures
This earnings release includes information that does not conform to U.S. generally accepted accounting principles (GAAP) and are considered non-GAAP measures. These measures include the company’s consolidated results and earnings per share on an operating earnings basis, which excludes significant items and non-operating pension and other post- employment benefit costs (operating earnings and operating EPS), total segment pre-tax operating earnings, operating costs and corporate expenses on an operating earnings basis. Management uses these measures internally for planning, forecasting and evaluating the performance of the company’s segments, including allocating resources and evaluating incentive compensation. From a liquidity perspective, management uses free cash flow, which is defined as cash provided by/used for operating activities less purchases of property, plant and equipment. Free cash flow is useful to investors and management to evaluate the company’s cash flow and financial performance, and is an integral financial measure used in the company’s financial planning process. Management believes that these non-GAAP measurements are meaningful to investors as they provide insight with respect to ongoing operating results of the company and provide a more useful comparison of year-over-year results. These non-GAAP measurements supplement our GAAP disclosures and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules A, C and D. Details of significant items are provided in schedule B.

About DuPont
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.


8

Forward-Looking Statements:
On December 11, 2015, DuPont and The Dow Chemical Company (“Dow”) announced entry into an Agreement and Plan of Merger, as amended on March 31, 2017, and as may be amended from time to time in accordance with its terms, (the “Merger Agreement”) under which the companies will combine in an all-stock merger (the “Merger Transaction”), subject to satisfaction of closing conditions, including receipt of regulatory approval. Dow and DuPont have obtained conditional approval for the Merger Transaction from the antitrust regulatory authorities in the United States, Brazil, Canada and China, among others. The conditional approvals were granted based on the companies fulfilling their commitments to divest certain assets, among other conditions (the “Conditional Commitments”). In connection with the Conditional Commitments, DuPont entered into a definitive agreement (the “FMC Transaction Agreement”) with FMC Corporation (FMC). Under the FMC Transaction Agreement subject to the closing of the Merger Transaction in addition to customary closing conditions, including regulatory approval, FMC will acquire certain Crop Protection business and R&D assets from DuPont and DuPont has agreed to acquire certain assets relating to FMC’s Health and Nutrition segment (collectively, the “FMC Transactions”). The combined company will be DowDuPont Inc. DuPont and Dow intend, following consummation of the Merger Transaction, that DowDuPont Inc. will pursue, subject to the receipt of approval by the board of directors of DowDuPont, the separation of the combined company’s agriculture business, specialty products business, and materials science business through a series of tax-efficient transactions (collectively, the “Intended Business Separations”). For more information, please see DuPont’s latest annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K, as well as the joint proxy/prospectus included in the DowDuPont Registration Statement on Form S-4 filed in connection with the Merger Transaction.


This document contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “believes,” “intends,” “estimates,” “anticipates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company’s strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, financial results and timing of, as well as expected benefits, including synergies, from the Merger Transaction and the Intended Business Separations, are forward-looking statements. These and other forward-looking statements, including the failure to consummate the Merger Transaction, the Intended Business Separations, the FMC Transactions or the Conditional Commitments, to make or take any filing or other action required to consummate such transactions in a timely manner or at all, 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 are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting products based on biotechnology and, in general, for products for the agriculture industry; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could affect demand as well as availability of products for the agriculture industry; ability to protect and enforce the company’s intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses; and risks related to the Merger Transaction, the Intended Business Separations, the FMC Transactions and the Conditional Commitments. These risks, as well as other risks associated with the Merger Transaction, the Intended Business Separations, the FMC Transactions and the Conditional Commitments, are or will be more fully discussed in (1) DuPont’s most recently filed Form 10-K, 10-Q and 8-K reports, (2) DuPont’s subsequently filed Form 10-K and 10-Q reports and (3) the joint proxy statement/prospectus included in the Registration Statement filed with the SEC about the Merger Transaction. 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, monetary 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. The company assumes no obligation to publicly provide revisions or updates to any forward-looking statements, whether because of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.



# # #
7/25/17



9
E.I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)



SCHEDULE A
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Net sales
$
7,424

 
$
7,061

 
$
15,167

 
$
14,466

Cost of goods sold
4,192

 
3,990

 
8,563

 
8,232

Other operating charges (1)
176

 
143

 
380

 
328

Selling, general and administrative expenses (1)
1,348

 
1,211

 
2,608

 
2,339

Research and development expense
441

 
432

 
857

 
850

Other (loss) income, net (1)
(21
)
 
51

 
285

 
423

Interest expense
99

 
93

 
183

 
185

Employee separation / asset related charges, net (1)
160

 
(90
)
 
312

 
(13
)
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
987


1,333

 
2,549

 
2,968

Provision for income taxes on continuing operations (1)
128

 
306

 
352

 
712

Income from continuing operations after income taxes
859

 
1,027

 
2,197

 
2,256

Income (loss) from discontinued operations after income taxes
10

 
(3
)
 
(207
)
 
—

 
 
 
 
 
 
 
 
Net income
869

 
1,024

 
1,990

 
2,256

 
 
 
 
 
 
 
 
Less: Net income attributable to noncontrolling interests
7

 
4

 
15

 
10

 
 
 
 
 
 
 
 
Net income attributable to DuPont
$
862

 
$
1,020

 
$
1,975

 
$
2,246

 
 
 
 
 
 
 
 
Basic earnings per share of common stock:
 
 
 
 
 
 
 
Basic earnings per share of common stock from continuing operations
$
0.98

 
$
1.17

 
$
2.51

 
$
2.56

Basic earnings (loss) per share of common stock from discontinued operations
0.01

 
—

 
(0.24
)
 
—

Basic earnings per share of common stock (2)
$
0.99

 
$
1.16

 
$
2.27

 
$
2.56

 
 
 
 
 
 
 
 
Diluted earnings per share of common stock:
 
 
 
 
 
 
 
Diluted earnings per share of common stock from continuing operations
$
0.97

 
$
1.16

 
$
2.50

 
$
2.55

Diluted earnings (loss) per share of common stock from discontinued operations
0.01

 
—

 
(0.24
)
 
—

Diluted earnings per share of common stock (2)
$
0.99

 
$
1.16

 
$
2.26

 
$
2.55

 
 
 
 
 
 
 
 
Dividends per share of common stock
$
0.38

 
$
0.38

 
$
0.76

 
$
0.76

 
 
 
 
 
 
 
 
Average number of shares outstanding used in earnings per share (EPS) calculation:
 
 
 
 
 
 
 
  Basic
868,481,000

 
875,013,000

 
867,496,000

 
874,269,000

  Diluted
872,750,000

 
879,179,000

 
871,920,000

 
878,214,000

 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Measures
 
 
 
 
 
 
 
 
 
 
 
Summary of Earnings Comparison
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Income from continuing operations after income taxes (GAAP)
$
859

 
$
1,027

 
(16
)%
 
$
2,197

 
$
2,256

 
(3
)%
Less: Significant items (charge) benefit included in income from continuing operations after income taxes (per Schedule B)
(290
)
 
19

 
 
 
(326
)
 
179

 
 
Non-operating pension/OPEB costs included in income from continuing operations after income taxes
(67
)
 
(89
)
 
 
 
(134
)
 
(135
)
 
 
Net income attributable to noncontrolling interest from continuing operations
7

 
4

 
 
 
15

 
10

 
 
Operating earnings (Non-GAAP) (3)
$
1,209

 
$
1,093

 
11
 %
 
$
2,642

 
$
2,202

 
20
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share from continuing operations (GAAP)
$
0.97

 
$
1.16

 
(16
)%
 
$
2.50

 
$
2.55

 
(2
)%
Less: Significant items (charge) benefit included in EPS (per Schedule B)
(0.33
)
 
0.02

 
 
 
(0.37
)
 
0.20

 
 
Non-operating pension/OPEB costs included in EPS
(0.08
)
 
(0.10
)
 
 
 
(0.15
)
 
(0.15
)
 
 
Operating earnings per share (Non-GAAP) (3)
$
1.38

 
$
1.24

 
11
 %
 
$
3.02

 
$
2.50

 
21
 %
 
 
 
 
 
 
 
 
 
 
 
 

10
E.I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)

SCHEDULE A (continued)
 
 
 
 
June 30,
2017
 
December 31,
2016
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
3,254

 
$
4,605

Marketable securities
 
2,974

 
1,362

Accounts and notes receivable, net
 
8,562

 
4,971

Inventories
 
4,856

 
5,673

Prepaid expenses
 
476

 
506

Total current assets
 
20,122

 
17,117

Property, plant and equipment, net of accumulated depreciation
   (June 30, 2017 - $15,294 December 31, 2016 - $14,736)
 
8,959

 
9,231

Goodwill
 
4,232

 
4,180

Other intangible assets
 
3,623

 
3,664

Investment in affiliates
 
698

 
649

Deferred income taxes
 
2,841

 
3,308

Other assets
 
2,731

 
1,815

Total
 
$
43,206

 
$
39,964

 
 
 
 
 
Liabilities and Equity
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable
 
$
2,756

 
$
3,705

Short-term borrowings and capital lease obligations
 
3,473

 
429

Income taxes
 
153

 
101

Other accrued liabilities
 
4,060

 
4,662

Total current liabilities
 
10,442

 
8,897

Long-term borrowings and capital lease obligations
 
10,086

 
8,107

Other liabilities
 
9,718

 
12,333

Deferred income taxes
 
366

 
431

Total liabilities
 
30,612

 
29,768

 
 
 
 
 
Commitments and contingent liabilities
 
 
 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
Preferred stock
 
237

 
237

Common stock, $0.30 par value; 1,800,000,000 shares authorized;
   Issued at June 30, 2017 - 954,703,000; December 31, 2016 - 950,044,000
 
286

 
285

Additional paid-in capital
 
11,424

 
11,190

Reinvested earnings
 
16,233

 
14,924

Accumulated other comprehensive loss
 
(9,065
)
 
(9,911
)
Common stock held in treasury, at cost (87,041,000 shares at June 30, 2017 and December 31, 2016)
 
(6,727
)
 
(6,727
)
Total DuPont stockholders' equity
 
12,388

 
9,998

Noncontrolling interests
 
206

 
198

Total equity
 
12,594

 
10,196

Total
 
$
43,206

 
$
39,964


11
E.I. du Pont de Nemours and Company
Condensed Consolidated Statement of Cash Flows
(Dollars in millions)


SCHEDULE A (continued)
 
 
Six Months Ended
June 30,
 
2017
 
2016
Total Company
 
 
 
 
 
 
 
Net income
$
1,990

 
$
2,256

Adjustments to reconcile net income to cash used for operating activities:
 
 
 
Depreciation
462

 
473

Amortization of intangible assets
108

 
226

Net periodic pension benefit cost
219

 
320

Contributions to pension plans
(2,994
)
 
(237
)
Gain on sale of businesses and other assets
(202
)
 
(385
)
Asset-related charges
279

 
78

Other operating activities - net
279

 
300

Change in operating assets and liabilities - net
(4,196
)
 
(4,491
)
Cash used for operating activities
(4,055
)
 
(1,460
)
Investing activities
 
 
 
Purchases of property, plant and equipment
(524
)
 
(507
)
Investments in affiliates
(22
)
 
(2
)
Proceeds from sale of businesses and other assets - net
296

 
212

Net (increase) decrease in short-term financial instruments
(1,610
)
 
174

Foreign currency exchange contract settlements
(29
)
 
(280
)
Other investing activities - net
(43
)
 
(15
)
Cash used for investing activities
(1,932
)
 
(418
)
Financing activities
 
 
 
Dividends paid to stockholders
(664
)
 
(669
)
Net increase in borrowings
5,041

 
1,632

Proceeds from exercise of stock options
203

 
70

Other financing activities - net
(49
)
 
(39
)
Cash provided by financing activities
4,531

 
994

Effect of exchange rate changes on cash
105

 
(5
)
Decrease in cash and cash equivalents
(1,351
)
 
(889
)
Cash and cash equivalents at beginning of period
4,605

 
5,300

Cash and cash equivalents at end of period
$
3,254

 
$
4,411

 
 
 
 
Reconciliation of Non-GAAP Measure
 
 
 
Calculation of Free Cash Flow - Total Company
 
 
 
 
Six Months Ended June 30,
 
2017
 
2016
Cash used for operating activities (GAAP)
$
(4,055
)
 
$
(1,460
)
Purchases of property, plant and equipment
(524
)
 
(507
)
Free cash flow (Non-GAAP)
$
(4,579
)
 
$
(1,967
)
 
 
 
 
(1) See Schedule B for detail of significant items.
(2) The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding.
(3) Operating earnings and operating earnings per share are defined as earnings from continuing operations excluding significant items and non-operating pension/OPEB costs. Non-operating pension/OPEB costs includes all of the components of net periodic benefit cost from continuing operations with the exception of the service cost component.

12
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)

SCHEDULE B
 
 
 
 
 
 
 
 
 
 
SIGNIFICANT ITEMS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax
 
After-tax (6)
 
($ Per Share)
 
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
1st Quarter
 
 
 
 
 
 
 
 
 
 
 
Transaction costs (1)
$
(170
)
 
$
(24
)
 
$
(122
)
 
$
(21
)
 
$
(0.14
)
 
$
(0.02
)
Restructuring charges, net (2)
(152
)
 
(77
)
 
(100
)
 
(48
)
 
(0.11
)
 
(0.06
)
Gain on sale of business / entity (3)
162

 
369

 
86

 
214

 
0.10

 
0.24

Income tax items (4)
47

 
—

 
100

 
—

 
0.11

 
—

Customer claims adjustment / recovery (5)
—

 
23

 
—

 
15

 
—

 
0.02

1st Quarter - Total
$
(113
)
 
$
291

 
$
(36
)
 
$
160

 
$
(0.04
)
 
$
0.18

 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
 
 
 
 
 
 
 
 
Transaction costs (1)
$
(216
)
 
$
(76
)
 
$
(159
)
 
$
(59
)
 
$
(0.18
)
 
$
(0.07
)
Restructuring charges, net (2)
(160
)
 
90

 
(102
)
 
59

 
(0.12
)
 
0.07

Income tax items (4)
—

 
—

 
(29
)
 
—

 
(0.03
)
 
—

Customer claims adjustment / recovery (5)
—

 
30

 
—

 
19

 
—

 
0.02

2nd Quarter - Total
$
(376
)
 
$
44

 
$
(290
)
 
$
19

 
$
(0.33
)
 
$
0.02

 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-date Total
$
(489
)
 
$
335

 
$
(326
)
 
$
179

 
$
(0.37
)
 
$
0.20



13
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)


(1)
Second quarter and first quarter 2017 included charges of $(216) and $(170), respectively, and second quarter and first quarter 2016 included charges of $(76) and $(24), respectively, recorded in selling, general and administrative expenses related to costs associated with the planned merger with The Dow Chemical Company and related activities. For second quarter and first quarter 2017, the effective tax rate for the total of pre-tax charges was 26.4% and 28.2%, respectively. For second quarter and first quarter 2016, the effective tax rate for the total of pre-tax charges was 22.4% and 12.5%, respectively. A significant portion of the transaction costs are in the US; however, those costs are not always tax-deductible.
 
 
(2)
Second quarter and first quarter 2017 included restructuring charges of $(160) and $(152), respectively, recorded in employee separation / asset related charges, net, primarily associated with actions to improve plant productivity.  Year-to-date charges included $(33) of severance and related benefit costs and $(279) of asset-related charges.   The asset-related charges mainly consists of accelerated depreciation associated with decision to close the company’s Protection Solutions Cooper River manufacturing site located near Charleston, South Carolina. 
 
Second quarter 2016 included a $90 benefit recorded in employee separation / asset related charges, net associated with the 2016 Global Cost Savings and Restructuring Program. This benefit was primarily due to the reduction in severance and related benefit costs due to the elimination of positions at a lower cost than expected.
 
First quarter 2016 included a $(75) restructuring charge recorded in employee separation / asset related charges, net related to the decision not to re-start the Agriculture segment's insecticide manufacturing facility at the La Porte site located in La Porte, Texas. The charge included $(41) of asset-related charges, $(18) of contract termination costs, and $(16) of employee severance and related benefit costs.
 
First quarter 2016 included a $(2) charge in employee separation / asset related charges, net associated with the 2016 Global Cost Savings and Restructuring Program. This charge was primarily due to the identification of additional projects in certain segments, offset by a reduction in severance and related benefit costs due to workforce reductions achieved through non-severance programs.
 
 
(3)
First quarter 2017 included a gain of $162 recorded in other (loss) income, net associated with the sale of the company's global food safety diagnostic business, a part of the Nutrition & Health segment. The effective tax rate for the gain on sale was 46.9% due to unfavorable tax consequences of non-deductible goodwill.
 
First quarter 2016 included a gain of $369 recorded in other (loss) income, net associated with the sale of the DuPont (Shenzhen) Manufacturing Limited entity, which held certain buildings and other assets. The gain is reflected as a Corporate item.
 
 
(4)
Second quarter 2017 included a tax charge of $(29) related to the elimination of a tax benefit recorded in 2016 due to the second quarter 2017 principal U.S. pension plan contribution.
 
First quarter 2017 included a tax benefit of $53, as well as a $47 benefit on associated accrued interest reversals (recorded in other (loss) income, net), related to a reduction in the company’s unrecognized tax benefits due to the closure of various tax statutes of limitations.
 
 
(5)
The company recorded insurance recoveries of $30 in the second quarter 2016 in other operating charges for recovery of costs for customer claims related to the use of the Agriculture's segment Imprelis® herbicide.
 
First quarter 2016 included a benefit of $23, in other operating charges for reductions in the accrual for customer claims related to the use of the Imprelis® herbicide.
 
 
(6)
Unless specifically addressed in notes above, 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


14
E.I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)


SCHEDULE C
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SEGMENT NET SALES
 
2017
 
2016
 
2017
 
2016
Agriculture
 
$
3,446

 
$
3,218

 
$
7,374

 
$
7,004

Electronics & Communications
 
546

 
494

 
1,056

 
946

Industrial Biosciences
 
395

 
355

 
763

 
707

Nutrition & Health
 
818

 
835

 
1,607

 
1,636

Performance Materials
 
1,381

 
1,335

 
2,749

 
2,584

Protection Solutions
 
801

 
786

 
1,548

 
1,515

Other
 
37

 
38

 
70

 
74

Consolidated net sales
 
$
7,424

 
$
7,061

 
$
15,167

 
$
14,466

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SEGMENT OPERATING EARNINGS (1)
 
2017
 
2016
 
2017
 
2016
Agriculture
 
$
963

 
$
865

 
$
2,199

 
$
1,966

Electronics & Communications
 
116

 
93

 
205

 
152

Industrial Biosciences
 
76

 
62

 
151

 
125

Nutrition & Health
 
135

 
130

 
256

 
234

Performance Materials
 
329

 
325

 
684

 
598

Protection Solutions
 
191

 
188

 
368

 
364

Other
 
(53
)
 
(50
)
 
(115
)
 
(109
)
Total segment operating earnings
 
1,757

 
1,613

 
3,748

 
3,330

Corporate expenses
 
(51
)
 
(83
)
 
(120
)
 
(169
)
Interest expense
 
(99
)
 
(93
)
 
(183
)
 
(185
)
Operating earnings before income taxes and exchange losses
 
1,607

 
1,437

 
3,445

 
2,976

Exchange losses(2)
 
(140
)
 
(15
)
 
(199
)
 
(136
)
Operating earnings before income taxes (Non-GAAP)
 
$
1,467

 
$
1,422

 
$
3,246

 
$
2,840

Non-operating pension/OPEB costs
 
(104
)
 
(133
)
 
(208
)
 
(207
)
Total significant items before income taxes
 
(376
)
 
44

 
(489
)
 
335

Income from continuing operations before income taxes (GAAP)
 
$
987

 
$
1,333

 
$
2,549

 
$
2,968

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (3)
 
2017
 
2016
 
2017
 
2016
Agriculture
 
$
—

 
$
35

 
$
—

 
$
(38
)
Electronics & Communications
 
(1
)
 
8

 
(6
)
 
15

Industrial Biosciences
 
—

 
3

 
(6
)
 
4

Nutrition & Health
 
—

 
12

 
160

 
13

Performance Materials
 
(2
)
 
9

 
(13
)
 
5

Protection Solutions
 
(157
)
 
7

 
(281
)
 
10

Other
 
—

 
—

 
—

 
(3
)
Total significant items by segment
 
(160
)
 
74

 
(146
)
 
6

Corporate expenses
 
(216
)
 
(30
)
 
(343
)
 
329

Total significant items before income taxes
 
$
(376
)
 
$
44

 
$
(489
)
 
$
335


15
E.I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)

SCHEDULE C (continued)
 
 
 
 
 
 
 
 
 
 
Corporate Expenses
 
 
 
 
 
 
 
The reconciliation below reflects GAAP corporate expenses (income) excluding significant items.
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Corporate expenses (income) (GAAP)
$
267

 
$
113

 
$
463

 
$
(160
)
  Less: Significant items charge (benefit) (3)
216

 
30

 
343

 
(329
)
Corporate expenses (Non-GAAP)
$
51

 
$
83

 
$
120

 
$
169

 
 
 
 
 
 
 
 
Net sales
7,424

 
7,061

 
15,167

 
14,466

Corporate expenses (income) (GAAP) - Percentage of net sales
3.6
%
 
1.6
%
 
3.1
%
 
(1.1
)%
Corporate expenses (Non-GAAP) - Percentage of net sales
0.7
%
 
1.2
%
 
0.8
%
 
1.2
 %
 
 
 
 
 
 
 
 
(1) Segment operating earnings is defined as income from continuing operations before income taxes excluding significant pre-tax benefits (charges), non-operating pension/OPEB costs, exchange losses, corporate expenses and interest.
(2)  See Schedule D for additional information on exchange gains and losses.
(3)  See Schedule B for detail of significant items.



16
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

SCHEDULE D
 
 
 
 
 
 
 
 
 
Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2017
 
2016
 
2017
 
2016
Income from continuing operations after income taxes (GAAP)
 
$
859

 
$
1,027

 
$
2,197

 
$
2,256

Add: Provision for income taxes on continuing operations
 
128

 
306

 
352

 
712

Income from continuing operations before income taxes
 
$
987

 
$
1,333

 
$
2,549

 
$
2,968

Add: Significant items charge (benefit) before income taxes(1)
 
376

 
(44
)
 
489

 
(335
)
Add: Non-operating pension/OPEB costs
 
104

 
133

 
208

 
207

Operating earnings before income taxes (Non-GAAP)
 
$
1,467

 
$
1,422

 
$
3,246

 
$
2,840

Less: Net income attributable to noncontrolling interests from continuing operations
 
7

 
4

 
15

 
10

Add: Interest expense
 
 
99

 
93

 
183

 
185

Adjusted EBIT from operating earnings (Non-GAAP)
 
$
1,559

 
$
1,511

 
$
3,414

 
$
3,015

Add: Depreciation and amortization
 
289

 
339

 
570

 
699

Adjusted EBITDA from operating earnings (Non-GAAP)
 
$
1,848

 
$
1,850

 
$
3,984

 
$
3,714


Reconciliation of Operating Costs to Consolidated Income Statement Line Items
GAAP operating costs is defined as other operating charges, selling, general and administrative expenses, and research and development expense. The reconciliation below reflects operating costs excluding significant items and non-operating pension/OPEB costs.
 
 
 
 
 
Three Months Ended June 30, 2017
 
Three Months Ended June 30, 2016
 
As Reported (GAAP)
Less: Significant Items (1)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
 
As Reported (GAAP)
Less: Significant Items (1)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
Other operating charges
$
176

$
—

$
—

$
176

 
$
143

$
(30
)
$
—

$
173

Selling, general and administrative expenses
1,348

216

31

1,101

 
1,211

76

53

1,082

Research and development expense
441

—

16

425

 
432

—

20

412

Total
$
1,965

$
216

$
47

$
1,702

 
$
1,786

$
46

$
73

$
1,667

 
 
 
 
 
 
 
 
 
 
Net sales
$
7,424

 
 
$
7,424

 
$
7,061

 
 
$
7,061

Percentage of net sales
26.5
%
 
 
22.9
%
 
25.3
%
 
 
23.6
%
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
 
As Reported (GAAP)
Less: Significant Items (1)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
 
As Reported (GAAP)
Less: Significant Items (1)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
Other operating charges
$
380

$
—

$
—

$
380

 
$
328

$
(53
)
$
—

$
381

Selling, general and administrative expenses
2,608

386

62

2,160

 
2,339

100

83

2,156

Research and development expense
857

—

32

825

 
850

—

31

819

Total
$
3,845

$
386

$
94

$
3,365

 
$
3,517

$
47

$
114

$
3,356

 
 
 
 
 
 
 
 
 
 
Net sales
$
15,167

 
 
$
15,167

 
$
14,466

 
 
$
14,466

Percentage of net sales
25.4
%
 
 
22.2
%
 
24.3
%
 
 
23.2
%



17
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)


SCHEDULE D (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exchange Gains/Losses on Operating Earnings
 
 
 
 
 
 
 
 
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other (loss) income, net and the related tax impact is recorded in provision for (benefit from) income taxes on the Consolidated Income Statements.
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2017
 
2016
 
2017
 
2016
Subsidiary Monetary Position Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange (losses) gains
 
$
(54
)
 
$
146

 
$
(28
)
 
$
179

Local tax benefits (expenses)
 
94

 
(60
)
 
130

 
(47
)
Net after-tax impact from subsidiary exchange gains
 
$
40

 
$
86

 
$
102

 
$
132

 
 
 
 
 
 
 
 
 
Hedging Program Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange losses
 
$
(86
)
 
$
(161
)
 
$
(171
)
 
$
(315
)
Tax benefits
 
31

 
58

 
61

 
113

Net after-tax impact from hedging program exchange losses
 
$
(55
)
 
$
(103
)
 
$
(110
)
 
$
(202
)
 
 
 
 
 
 
 
 
 
Total Exchange Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange losses
 
$
(140
)
 
$
(15
)
 
$
(199
)
 
$
(136
)
Tax benefits (expenses)
 
125

 
(2
)
 
191

 
66

Net after-tax exchange losses
 
$
(15
)
 
$
(17
)
 
$
(8
)
 
$
(70
)
 
 
 
 
 
 
 
 
 
As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)."
 
 
 
 
 
 
 
 
 

18
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)


 
 
 
 
 
 
 
 
SCHEDULE D (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
 
 
 
 
 
 
 
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), as defined above, significant items and non-operating pension/OPEB costs.
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Income from continuing operations before income taxes (GAAP)
$
987

 
$
1,333

 
$
2,549

 
$
2,968

Add: Significant items - charge (benefit) (1)
376

 
(44
)
 
489

 
(335
)
           Non-operating pension/OPEB costs
104

 
133

 
208

 
207

Less: Exchange losses
(140
)
 
(15
)
 
(199
)
 
(136
)
Income from continuing operations before income taxes, significant items,
    exchange losses, and non-operating pension/OPEB costs (Non-GAAP)
$
1,607

 
$
1,437

 
$
3,445

 
$
2,976

 
 
 
 
 
 
 
 
Provision for income taxes on continuing operations (GAAP)
$
128

 
$
306

 
$
352

 
$
712

Add: Tax benefits (expenses) on significant items
86

 
(25
)
 
163

 
(156
)
          Tax benefits on non-operating pension/OPEB costs
37

 
44

 
74

 
72

          Tax benefits (expenses) on exchange gains/losses
125

 
(2
)
 
191

 
66

Provision for income taxes on continuing earnings, excluding exchange losses (Non-GAAP)
$
376

 
$
323

 
$
780

 
$
694

 
 
 
 
 
 
 
 
Effective income tax rate (GAAP)
13.0
%
 
23.0
 %
 
13.8
%
 
24.0
 %
Significant items and non-operating pension/OPEB costs effect
4.1
%
 
(0.1
)%
 
4.3
%
 
(1.9
)%
Tax rate, from continuing operations before significant items and non-operating pension/OPEB costs
17.1
%
 
22.9
 %
 
18.1
%
 
22.1
 %
Exchange gains (losses) effect
6.3
%
 
(0.4
)%
 
4.5
%
 
1.2
 %
Base income tax rate from continuing operations (Non-GAAP)
23.4
%
 
22.5
 %
 
22.6
%
 
23.3
 %
 
 
 
 
 
 
 
 
(1) See Schedule B for detail of significant items.
 


DUPONT E I DE NEMOURS & CO Reports