WILMINGTON, Del., Nov. 2, 2021 /PRNewswire/ -- DuPont (NYSE: DD)
today announced financial results for the third quarter 2021.
"We delivered third quarter financial results ahead of
expectations by maintaining a disciplined focus on operational
excellence and pricing actions in the face of unprecedented global
supply shortages, logistics challenges and sustained inflationary
pressure," said Ed Breen, DuPont
Executive Chairman and Chief Executive Officer. "We leveraged our
global supply network to meet the needs of our customers as demand
remained robust across the electronics, automotive, construction
and water end-markets and continued to improve across industrial
end-markets globally."
"Today we also separately announced a definitive agreement to
acquire Rogers Corporation(1), an advanced materials
provider with superior technology innovation, applications
engineering expertise, and leading end-market positions. In
addition, we announced we are exploring options to divest a
substantial portion of the Mobility & Materials
segment(2)," Breen continued. "With these announcements,
and building on our recent acquisition of Laird Performance
Materials, we are significantly advancing our position as a premier
multi-industrial company focused in the secular growth areas of
electronics, water, protection, industrial technologies and next
generation automotive. We are strengthening these pillars to
further expand our capabilities to deliver differentiated,
value-added technologies. These steps are expected to create
tremendous opportunities for employees and unlock significant value
for shareholders."
Third Quarter 2021 Results
Net sales totaled $4.3 billion, up
18 percent versus the year-ago period and up 16 percent on an
organic(3) basis including high-single to low-double
digit volume growth across each of the three reporting segments.
Double-digit organic growth across Asia
Pacific, Europe and
North America reflects robust
global customer demand in key end-markets. The organic sales growth
during the quarter includes 6 percent pricing gains which
primarily reflects actions taken to offset higher raw material
costs.
GAAP EPS from continuing operations totaled $0.80 on GAAP income from continuing operations
of $433 million, versus GAAP EPS from
continuing operations of $0.11 on
GAAP income from continuing operations of $86 million in the year-ago period. The
improvement was driven mainly by a lower share count, higher
segment earnings and lower net charges associated with significant
items(3).
Operating EBITDA(3) was $1.09
billion, up 20 percent versus operating EBITDA(3)
in the prior year. The improvement was driven by the ongoing
recovery in key end-markets impacted by the COVID-19 pandemic in
the year-ago period, most notably automotive, continued strength in
electronics markets and the impact of the July 1, 2021 Laird Performance Materials
acquisition. Operating EBITDA improvement drove 50 basis points of
operating EBITDA margin expansion. Adjusted EPS(3) was
$1.15, up 89% versus adjusted
EPS(3) in the year-ago period primarily due to a lower
share count and higher segment results.
Operating cash flow in the quarter of $842 million and capital expenditures of
$208 million resulted in adjusted
free cash flow conversion(3) of 112 percent.
(1)
|
On November 2, 2021
DuPont announced it had entered a definitive agreement to acquire
Rogers Corporation (NYSE: ROG). The transaction is subject to
approval by Rogers
Corporation's shareholders, regulatory approvals and customary
closing conditions.
|
(2)
|
On November 2, 2021
DuPont announced that it has initiated a divestiture process
related to a substantial portion of its Mobility & Materials
segment. The outcome of which,
including the entry into definitive agreements, is subject to
approval by the DuPont Board of Directors. The scope of the
intended divestiture excludes certain product lines
including Auto Adhesives and Multibase.
|
(3)
|
Adjusted EPS,
operating EBITDA, organic sales, free cash flow and free cash flow
conversion are non-GAAP measures. See page 6 for further
discussion, including a definition
of significant items. Reconciliation to the most directly
comparable GAAP measure, including details of significant items
begins on page 11 of this communication.
|
Third Quarter 2021 Segment Highlights
Electronics & Industrial
Electronics &
Industrial reported net sales of $1.5
billion, up 21 percent from the year-ago period. Volume
gains delivered 9 percent organic sales growth. The July 1, 2021 acquisition of Laird Performance
Materials increased net sales by 11 percent. Currency was a 1
percent tailwind.
Volume growth was led by double-digit gains in Industrial
Solutions with strength in consumer electronics, healthcare and
industrial markets. Continued strength in Semiconductor
Technologies also resulted in double-digit volume growth with
demand driven by the on-going transition to more advanced
technologies and growth in high performance computing and 5G
communications. Within Interconnect Solutions, organic sales were
down mid-single digits due to the anticipated shift in demand
related to premium next-generation smartphones to the first half of
the year, along with softness in automotive end-markets due to
supply chain constraints. For the nine months ended September 30, 2021, organic sales for
Interconnect Solutions were up high-single digits compared to the
same period of the prior year.
Operating EBITDA for the segment was $475
million, an increase of 13 percent from operating EBITDA of
$421 million in the year-ago period.
Volume gains and earnings associated with Laird Performance
Materials more than offset a headwind associated with a technology
sale in the prior year.
Water & Protection
Water & Protection reported
net sales of $1.4 billion, up 12
percent from the year-ago period. Organic sales were up 11 percent
on a 9 percent increase in volume and a 2 percent increase in
price. Currency was a 1 percent tailwind.
Sales gains versus the year-ago period were led by Safety
Solutions as continued recovery in industrial end-markets resulted
in significant volume improvement for aramid fibers, coupled with
pricing gains. Within Shelter Solutions, high-single digit organic
growth reflects continued recovery in commercial construction led
by demand for solid surfaces, as well as pricing gains. Demand in
North American residential construction and retail channels for
do-it-yourself applications remains strong. Broad-based demand for
Water Solutions technologies also remained strong, however,
logistics challenges continued to impact our ability to meet demand
which resulted in organic growth in the low-single digits versus
the year-ago period.
Operating EBITDA for the segment totaled $353 million, an increase of 12 percent compared
to operating EBITDA of $314 million
in the year-ago period. Volume growth and the absence of charges
incurred in the prior year associated with temporarily idled
facilities more than offset higher raw materials and logistics
costs.
Mobility & Materials
Mobility & Materials
reported net sales of $1.3 billion,
up 30 percent from the year-ago period. Organic sales were up 28
percent on a 16 percent increase in price and a 12 percent increase
in volume. Currency was a 2 percent tailwind.
Sales gains were broad-based across the segment reflecting
significant organic growth within each of Engineering Polymers,
Performance Resins and Advanced Solutions. The local price increase
of 16 percent reflects actions taken to offset raw material costs
and higher metals pricing. Volume improvement reflects strong
recovery from the impact of the COVID-19 pandemic including
continued demand in the third quarter from automotive component
manufacturers.
Operating EBITDA for the segment was $280
million, an increase of 75 percent compared to operating
EBITDA of $160 million in the
year-ago period. The improvement was driven primarily by higher
volumes, pricing gains and the absence of charges incurred in the
prior year associated with temporarily idled facilities.
Outlook
"As our third quarter results demonstrate, the demand across our
end-markets is strong and we are successfully executing against a
backdrop of raw material inflation and global supply chain
challenges. We moved quickly to implement strategic price increases
in response to rising raw material costs and we will continue these
actions in the fourth quarter to deliver neutral price/cost for the
year," said Lori Koch, Chief
Financial Officer of DuPont. "As we head into the fourth quarter,
strong demand trends are expected to continue across almost all
end-markets; however, we are seeing a deceleration in order
patterns stemming from the ongoing global semiconductor chip
shortage, primarily in automotive end-markets, which is consistent
with the revisions to global auto build estimates which have come
down 17 percent for the second half of 2021 versus estimates
for the same period from just a few months ago. For full year 2021,
we now estimate net sales to be between $16.34 billion and $16.40
billion, operating EBITDA between $4.14 billion and $4.17
billion and adjusted EPS in the range of $4.18 to $4.22 per
share."
Conference Call
The Company will host a live webcast
of its third quarter earnings conference call with investors to
discuss its results and business outlook, along with a strategic
update today at 8:00 a.m. ET and
extending until approximately 9:30 a.m.
ET. The slide presentation that accompanies the conference
call will be posted on the DuPont's Investor Relations Events and
Presentations page. A replay of the webcast also will be available
on the DuPont's Investor Relations Events and Presentations
page following the live event.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials and solutions that help
transform industries and everyday life. Our employees apply diverse
science and expertise to help customers advance their best ideas
and deliver essential innovations in key markets including
electronics, transportation, construction, water, healthcare and
worker safety. More information about the company, its businesses
and solutions can be found at www.dupont.com. Investors can access
information included on the Investor Relations section of the
website at www.investors.dupont.com.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
Overview
Effective August 31, 2017, E. I. du Pont de Nemours and
Company ("EID") and The Dow Chemical Company ("TDCC") each merged
with subsidiaries of DowDuPont Inc. (n/k/a "DuPont") and, as a
result, EID and TDCC became subsidiaries of the Company (the "DWDP
Merger"). On April 1, 2019, the Company completed the
separation of the materials science business through the spin-off
of Dow Inc., ("Dow") including Dow's subsidiary The Dow Chemical
Company (the "Dow Distribution"). On June 1,
2019, the Company completed the separation of the
agriculture business through the spin-off of Corteva, Inc.
("Corteva") including Corteva's subsidiary E. I. du Pont de Nemours
and Company ("EID"), (the "Corteva Distribution" and together with
the Dow Distribution, the "DWDP Distributions").
On February 1, 2021, the Company
completed the divestiture of the Nutrition & Biosciences
("N&B") business to International Flavors & Fragrance Inc.
("IFF") in a Reverse Morris Trust transaction (the "N&B
Transaction") that resulted in IFF issuing shares to DuPont
stockholders. The results of operations of DuPont for all periods
presented reflect the historical financial results of N&B as
discontinued operations, as applicable. The cash flows related to
N&B have not been segregated and are included in the
Consolidated Statements of Cash Flows for the applicable
periods.
In addition, the Company includes in discontinued operations
activity related to the indemnification obligations pertaining to
EID legacy liabilities including eligible PFAS costs under the cost
sharing arrangement (the "MOU") by and between DuPont, Corteva and
The Chemours Company.
On July 1, 2021, DuPont completed
the previously announced acquisition (the "Laird PM Acquisition")
of the Laird Performance Materials business, ("Laird PM").
On November 2, 2021, DuPont
announced it has entered definitive agreements to acquire Rogers
Corporation ("Rogers"), (the "Intended Rogers Acquisition"). The
transaction is subject to approval by Rogers shareholders,
regulatory approvals and customary closing conditions.
On November 2, 2021, DuPont
announced that it has initiated a divestiture process (the
"In-Scope M&M Divestiture Process") related to a substantial
portion of its Mobility & Materials segment, (the "In-Scope
M&M Businesses"). The outcome of which, including the entry
into definitive agreements, is subject to approval of the DuPont
Board of Directors.
Cautionary Statement Regarding Forward Looking
Statements
This communication contains "forward-looking
statements" within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
In this context, forward-looking statements often address expected
future business and financial performance and financial condition,
and often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," "see," "will," "would," "target," and
similar expressions and variations or negatives of these words.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) in connection with
the Intended Rogers Acquisition, the failure to (x) obtain the
necessary approval from Rogers' shareholders, regulatory approvals,
or anticipated tax treatment, or (y) satisfy any of the other
conditions to closing; (ii) the possibility that unforeseen
liabilities, future capital expenditures, revenues, expenses,
earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management
strategies could impact the value, timing or pursuit of the closing
of the Intended Rogers Acquisition; (iii) the timing and outcome of
the In-Scope M&M Divestiture Process and the risks, costs and
ability to realize benefits from the pursuit of any disposition of
the In-Scope M&M Businesses resulting therefrom; (iv) the
ability to achieve expected benefits, synergies and operating
efficiencies in connection with the Laird PM Acquisition within the
expected time frames or at all or to successfully integrate Laird
PM; (v) ability to achieve anticipated tax treatments in connection
with the N&B Transaction, Laird PM Acquisition or the DWDP
Distributions; (vi) changes in relevant tax and other laws; (vii)
indemnification of certain legacy liabilities of EID in connection
with the Corteva Distribution; (viii) risks and costs related to
the performance under and impact of the cost sharing arrangement by
and between DuPont, Corteva and The Chemours Company related to
future eligible PFAS costs; (ix) failure to effectively manage
acquisitions, divestitures, alliances, joint ventures and other
portfolio changes, including meeting conditions under the Letter
Agreement entered in connection with the Corteva Distribution,
related to the transfer of certain levels of assets and businesses;
(x) uncertainty as to the long-term value of DuPont common stock;
(xi) risks and uncertainties related to the novel coronavirus
(COVID-19) and the responses thereto (such as voluntary and in some
cases, mandatory quarantines as well as shut downs and other
restrictions on travel and commercial, social and other activities)
on DuPont's business, results of operations, access to sources of
liquidity and financial condition which depend on highly uncertain
and unpredictable future developments, including, but not limited
to, the duration and spread of the COVID-19 outbreak, its severity,
the actions to contain the virus or treat its impact, and how
quickly and to what extent normal economic and operating conditions
resume; and (xii) other risks to DuPont's business, operations;
each as further discussed in detail in and results of operations as
discussed in DuPont's annual report on Form 10-K for the year ended
December 31, 2020 and its subsequent
reports on Form 10-Q and Form 8-K. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business or supply
chain disruption, operational problems, financial loss, legal
liability to third parties and similar risks, any of which could
have a material adverse effect on DuPont's consolidated financial
condition, results of operations, credit rating or liquidity. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. DuPont assumes no
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
Non-GAAP Financial Measures
This earnings release includes information that does not conform
to accounting principles generally accepted in the United States of America ("U.S. GAAP") and
are considered non-GAAP measures. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company, including allocating resources. DuPont's management
believes these non-GAAP financial measures are useful to investors
because they provide additional information related to the ongoing
performance of DuPont to offer a more meaningful comparison related
to future results of operations. These non-GAAP financial measures
supplement disclosures prepared in accordance with U.S. GAAP, and
should not be viewed as an alternative to U.S. GAAP. Furthermore,
such non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Reconciliations for these
non-GAAP measures to U.S. GAAP are provided in the Selected
Financial Information and Non-GAAP Measures starting on page 11 and
in the Reconciliation to Non-GAAP Measures on the Investors section
of the Company's website. Non-GAAP measures included in this
release are defined below. The Company has not provided
forward-looking U.S. GAAP financial measures or a reconciliation of
forward-looking non-GAAP financial measures to the most comparable
U.S. GAAP financial measures on a forward-looking basis because the
Company is unable to predict with reasonable certainty the ultimate
outcome of certain future events. These events include, among
others, the impact of portfolio changes, including asset sales,
mergers, acquisitions, and divestitures; contingent liabilities
related to litigation, environmental and indemnifications matters;
impairments and discrete tax items. These items are uncertain,
depend on various factors, and could have a material impact on U.S.
GAAP results for the guidance period.
Adjusted earnings per common share from continuing operations -
diluted ("Adjusted EPS"), is defined as earnings per common share
from continuing operations - diluted, excluding the after-tax
impact of significant items, after-tax impact of amortization
expense of intangibles and the after-tax impact of non-operating
pension / other post employment benefits ("OPEB") benefits /
charges. Management estimates amortization expense in 2021
associated with intangibles to be approximately $720 million on a pre-tax basis, or approximately
$1.03 per share.
Operating EBITDA, is defined as earnings (i.e. income (loss)
from continuing operations before income taxes) before interest,
depreciation, amortization, non-operating pension / OPEB benefits /
charges, and foreign exchange gains / losses, adjusted to exclude
significant items. Operating EBITDA margin is calculated as
operating EBITDA divided by net sales. Operating EBITDA leverage is
calculated as the year-over-year percentage change in operating
EBITDA divided by the year-over-year percentage change in net
sales.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
Free cash flow is defined as cash provided by/used for operating
activities less capital expenditures. As a result, free cash flow
represents cash that is available to the Company, after investing
in its asset base, to fund obligations using the Company's primary
source of liquidity, cash provided by operating activities.
Management believes free cash flow, even though it may be defined
differently from other companies, is useful to investors, analysts
and others to evaluate the Company's cash flow and financial
performance, and it is an integral measure used in the Company's
financial planning process. Free cash flow conversion is defined as
free cash flow divided by net income adjusted to exclude the
after-tax impact of non-cash impairment charges, gains or losses on
divestitures, and amortization expense of intangibles.
DuPont de Nemours,
Inc. Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Three Months
Ended
September
30,
|
Nine Months
Ended
September
30,
|
2021
|
2020
|
2021
|
2020
|
Net sales
|
$
|
4,271
|
|
$
|
3,629
|
|
$
|
12,382
|
|
$
|
10,588
|
|
Cost of
sales
|
2,778
|
|
2,417
|
|
7,945
|
|
7,034
|
|
Research and
development expenses
|
152
|
|
140
|
|
456
|
|
466
|
|
Selling, general and
administrative expenses
|
475
|
|
403
|
|
1,390
|
|
1,299
|
|
Amortization of
intangibles
|
196
|
|
172
|
|
530
|
|
527
|
|
Restructuring and
asset related charges - net
|
1
|
|
378
|
|
13
|
|
800
|
|
Goodwill impairment
charges
|
—
|
|
183
|
|
—
|
|
3,214
|
|
Acquisition,
integration and separation costs
|
29
|
|
22
|
|
58
|
|
161
|
|
Equity in earnings of
nonconsolidated affiliates
|
25
|
|
29
|
|
76
|
|
170
|
|
Sundry income
(expense) - net
|
8
|
|
430
|
|
170
|
|
631
|
|
Interest
expense
|
115
|
|
165
|
|
390
|
|
517
|
|
Income (loss) from
continuing operations before income taxes
|
558
|
|
208
|
|
1,846
|
|
(2,629)
|
|
Provision for income
taxes on continuing operations
|
125
|
|
122
|
|
308
|
|
224
|
|
Income (loss) from
continuing operations, net of tax
|
433
|
|
86
|
|
1,538
|
|
(2,853)
|
|
(Loss) income from
discontinued operations, net of tax
|
(29)
|
|
(158)
|
|
4,751
|
|
(300)
|
|
Net income
(loss)
|
404
|
|
(72)
|
|
6,289
|
|
(3,153)
|
|
Net income
attributable to noncontrolling interests
|
13
|
|
7
|
|
26
|
|
20
|
|
Net income (loss)
available for DuPont common stockholders
|
$
|
391
|
|
$
|
(79)
|
|
$
|
6,263
|
|
$
|
(3,173)
|
|
|
Per common share
data:
|
|
|
|
|
Earnings (loss) per
common share from continuing operations - basic
|
$
|
0.81
|
|
$
|
0.11
|
|
$
|
2.74
|
|
$
|
(3.90)
|
|
(Loss) earnings per
common share from discontinued operations - basic
|
(0.06)
|
|
(0.22)
|
|
8.61
|
|
(0.41)
|
|
Earnings (loss) per
common share - basic
|
$
|
0.75
|
|
$
|
(0.11)
|
|
$
|
11.35
|
|
$
|
(4.31)
|
|
Earnings (loss) per
common share from continuing operations - diluted
|
$
|
0.80
|
|
$
|
0.11
|
|
$
|
2.73
|
|
$
|
(3.90)
|
|
(Loss) earnings per
common share from discontinued operations - diluted
|
(0.06)
|
|
(0.21)
|
|
8.59
|
|
(0.41)
|
|
Earnings (loss) per
common share - diluted
|
$
|
0.75
|
|
$
|
(0.11)
|
|
$
|
11.32
|
|
$
|
(4.31)
|
|
|
Weighted-average
common shares outstanding - basic
|
521.5
|
|
734.4
|
|
551.7
|
|
735.8
|
|
Weighted-average
common shares outstanding - diluted
|
523.1
|
|
734.9
|
|
553.1
|
|
735.8
|
|
DuPont de Nemours,
Inc. Consolidated Balance Sheets
|
|
In millions, except
share and per share amounts (Unaudited)
|
September 30,
2021
|
December 31,
2020
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
|
1,670
|
|
$
|
2,544
|
|
Accounts and notes
receivable - net
|
2,908
|
|
2,421
|
|
Inventories
|
2,844
|
|
2,393
|
|
Other current
assets
|
225
|
|
181
|
|
Assets held for
sale
|
850
|
|
810
|
|
Assets of discontinued
operations
|
—
|
|
20,659
|
|
Total current
assets
|
8,497
|
|
29,008
|
|
Property, plant and
equipment - net of accumulated depreciation (September 30, 2021 -
$4,599;
December 31, 2020 - $4,256)
|
6,921
|
|
6,867
|
|
Other
Assets
|
|
|
Goodwill
|
19,688
|
|
18,702
|
|
Other intangible
assets
|
8,644
|
|
8,072
|
|
Restricted cash and
cash equivalents
|
50
|
|
6,206
|
|
Investments and
noncurrent receivables
|
1,029
|
|
1,047
|
|
Deferred income tax
assets
|
175
|
|
190
|
|
Deferred charges and
other assets
|
1,011
|
|
812
|
|
Total other
assets
|
30,597
|
|
35,029
|
|
Total
Assets
|
$
|
46,015
|
|
$
|
70,904
|
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Accounts
payable
|
$
|
2,538
|
|
$
|
2,222
|
|
Income taxes
payable
|
206
|
|
169
|
|
Accrued and other
current liabilities
|
1,335
|
|
1,085
|
|
Liabilities related to
assets held for sale
|
142
|
|
140
|
|
Liabilities of
discontinued operations
|
—
|
|
8,610
|
|
Total current
liabilities
|
4,221
|
|
12,226
|
|
Long-Term
Debt
|
10,629
|
|
15,611
|
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
2,014
|
|
2,053
|
|
Pension and other
post-employment benefits - noncurrent
|
1,017
|
|
1,110
|
|
Other noncurrent
obligations
|
895
|
|
834
|
|
Total other noncurrent
liabilities
|
3,926
|
|
3,997
|
|
Total
Liabilities
|
18,776
|
|
31,834
|
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value
each; issued 2021: 518,103,127
shares; 2020: 734,204,054 shares)
|
5
|
|
7
|
|
Additional paid-in
capital
|
49,702
|
|
50,039
|
|
Accumulated
deficit
|
(22,892)
|
|
(11,586)
|
|
Accumulated other
comprehensive (loss) income
|
(182)
|
|
44
|
|
Total DuPont
stockholders' equity
|
26,633
|
|
38,504
|
|
Noncontrolling
interests
|
606
|
|
566
|
|
Total
equity
|
27,239
|
|
39,070
|
|
Total Liabilities and
Equity
|
$
|
46,015
|
|
$
|
70,904
|
|
DuPont de Nemours,
Inc. Consolidated Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Nine Months
Ended
September
30,
|
2021
|
2020
|
Operating
Activities
|
|
|
Net income
(loss)
|
$
|
6,289
|
|
$
|
(3,153)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
1,094
|
|
2,326
|
|
Credit for deferred
income tax and other tax related items
|
(182)
|
|
(481)
|
|
Earnings of
nonconsolidated affiliates in excess of dividends
received
|
(41)
|
|
(120)
|
|
Net periodic pension
benefit cost
|
1
|
|
30
|
|
Pension
contributions
|
(59)
|
|
(77)
|
|
Net gain on sales and
split-offs of assets, businesses and investments
|
(5,117)
|
|
(612)
|
|
Restructuring and
asset related charges - net
|
15
|
|
807
|
|
Goodwill impairment
charges
|
—
|
|
3,214
|
|
Inventory step-up
amortization
|
12
|
|
—
|
|
Other net
loss
|
126
|
|
127
|
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
(399)
|
|
133
|
|
Inventories
|
(515)
|
|
312
|
|
Accounts
payable
|
379
|
|
43
|
|
Other assets and
liabilities, net
|
57
|
|
245
|
|
Cash provided by
operating activities
|
1,660
|
|
2,794
|
|
Investing
Activities
|
|
|
Capital
expenditures
|
(707)
|
|
(922)
|
|
Proceeds from sales of
property and businesses, net of cash divested
|
285
|
|
1,008
|
|
Acquisitions of
property and businesses, net of cash acquired
|
(2,323)
|
|
(73)
|
|
Purchases of
investments
|
(2,001)
|
|
(1)
|
|
Proceeds from sales
and maturities of investments
|
2,001
|
|
1
|
|
Other investing
activities, net
|
18
|
|
22
|
|
Cash (used for)
provided by investing activities
|
(2,727)
|
|
35
|
|
Financing
Activities
|
|
|
Changes in short-term
notes payable
|
—
|
|
(1,439)
|
|
Proceeds from issuance
of long-term debt
|
—
|
|
8,275
|
|
Proceeds from issuance
of long-term debt transferred to IFF at split-off
|
1,250
|
|
—
|
|
Payments on long-term
debt
|
(5,000)
|
|
(29)
|
|
Purchases of common
stock
|
(1,643)
|
|
(232)
|
|
Proceeds from issuance
of Company stock
|
110
|
|
34
|
|
Employee taxes paid
for share-based payment arrangements
|
(26)
|
|
(14)
|
|
Distributions to
noncontrolling interests
|
(34)
|
|
(48)
|
|
Dividends paid to
stockholders
|
(476)
|
|
(662)
|
|
Cash transferred to
IFF at split-off
|
(100)
|
|
—
|
|
Other financing
activities, net
|
(2)
|
|
(55)
|
|
Cash (used for)
provided by financing activities
|
(5,921)
|
|
5,830
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(49)
|
|
4
|
|
(Decrease)
Increase in cash, cash equivalents and restricted
cash
|
(7,037)
|
|
8,663
|
|
Cash, cash equivalents
and restricted cash from continuing operations, beginning of
period
|
8,767
|
|
1,569
|
|
Cash, cash equivalents
and restricted cash from discontinued operations, beginning of
period
|
8
|
|
8
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
8,775
|
|
1,577
|
|
Cash, cash equivalents
and restricted cash from continuing operations, end of
period
|
1,738
|
|
10,233
|
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
—
|
|
7
|
|
Cash, cash
equivalents and restricted cash at end of period
|
1,738
|
|
10,240
|
|
DuPont de Nemours,
Inc. Net Sales by Segment and Geographic
Region
|
|
Net Sales by
Segment and Geographic Region
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2021
|
Sep 30,
2020
|
Sep 30,
2021
|
Sep 30,
2020
|
Electronics &
Industrial
|
$
|
1,467
|
|
$
|
1,213
|
|
$
|
4,087
|
|
$
|
3,439
|
|
Water &
Protection
|
1,397
|
|
1,249
|
|
4,137
|
|
3,769
|
|
Mobility &
Materials
|
1,298
|
|
996
|
|
3,783
|
|
2,877
|
|
Corporate
|
109
|
|
171
|
|
375
|
|
503
|
|
Total
|
$
|
4,271
|
|
$
|
3,629
|
|
$
|
12,382
|
|
$
|
10,588
|
|
U.S. &
Canada
|
$
|
1,208
|
|
$
|
1,068
|
|
$
|
3,414
|
|
$
|
3,177
|
|
EMEA
1
|
831
|
|
650
|
|
2,475
|
|
2,038
|
|
Asia
Pacific
|
2,080
|
|
1,776
|
|
6,046
|
|
4,998
|
|
Latin
America
|
152
|
|
135
|
|
447
|
|
375
|
|
Total
|
$
|
4,271
|
|
$
|
3,629
|
|
$
|
12,382
|
|
$
|
10,588
|
|
|
|
|
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
September 30, 2021
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Industrial
|
—
|
%
|
9
|
%
|
9
|
%
|
1
|
%
|
11
|
%
|
21
|
%
|
|
Water &
Protection
|
2
|
|
9
|
|
11
|
|
1
|
|
—
|
|
12
|
|
|
Mobility &
Materials
|
16
|
|
12
|
|
28
|
|
2
|
|
—
|
|
30
|
|
|
Corporate
|
3
|
|
9
|
|
12
|
|
1
|
|
(49)
|
|
(36)
|
|
|
Total
|
6
|
%
|
10
|
%
|
16
|
%
|
1
|
%
|
1
|
%
|
18
|
%
|
|
U.S. &
Canada
|
5
|
%
|
8
|
%
|
13
|
%
|
—
|
%
|
—
|
%
|
13
|
%
|
|
EMEA
1
|
5
|
|
18
|
|
23
|
|
2
|
|
3
|
|
28
|
|
|
Asia
Pacific
|
6
|
|
8
|
|
14
|
|
2
|
|
1
|
|
17
|
|
|
Latin
America
|
3
|
|
6
|
|
9
|
|
2
|
|
2
|
|
13
|
|
|
Total
|
6
|
%
|
10
|
%
|
16
|
%
|
1
|
%
|
1
|
%
|
18
|
%
|
|
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Nine Months Ended
September 30, 2021
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year
(Unaudited)
|
|
Electronics &
Industrial
|
—
|
%
|
13
|
%
|
13
|
%
|
2
|
%
|
4
|
%
|
19
|
%
|
|
Water &
Protection
|
1
|
|
7
|
|
8
|
|
2
|
|
—
|
|
10
|
|
|
Mobility &
Materials
|
9
|
|
19
|
|
28
|
|
3
|
|
—
|
|
31
|
|
|
Corporate
|
3
|
|
2
|
|
5
|
|
2
|
|
(32)
|
|
(25)
|
|
|
Total
|
3
|
%
|
12
|
%
|
15
|
%
|
2
|
%
|
—
|
%
|
17
|
%
|
|
U.S. &
Canada
|
2
|
%
|
8
|
%
|
10
|
%
|
—
|
%
|
(3)
|
%
|
7
|
%
|
|
EMEA
1
|
—
|
|
14
|
|
14
|
|
6
|
|
1
|
|
21
|
|
|
Asia
Pacific
|
4
|
|
14
|
|
18
|
|
2
|
|
1
|
|
21
|
|
|
Latin
America
|
3
|
|
16
|
|
19
|
|
(1)
|
|
1
|
|
19
|
|
|
Total
|
3
|
%
|
12
|
%
|
15
|
%
|
2
|
%
|
—
|
%
|
17
|
%
|
|
1. Europe, Middle
East and Africa.
|
|
DuPont de Nemours,
Inc. Selected Financial Information and Non-GAAP
Measures
|
|
|
|
Operating
EBITDA by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
In millions
(Unaudited)
|
Sep 30,
2021
|
Sep 30,
2020
|
Sep 30,
2021
|
Sep 30,
2020
|
|
Electronics &
Industrial
|
$
|
475
|
|
$
|
421
|
|
$
|
1,335
|
|
$
|
1,084
|
|
|
Water &
Protection
|
353
|
|
314
|
|
1,060
|
|
1,010
|
|
|
Mobility &
Materials
|
280
|
|
160
|
|
852
|
|
352
|
|
|
Corporate
1
|
(21)
|
|
11
|
|
(50)
|
|
62
|
|
|
Total
|
$
|
1,087
|
|
$
|
906
|
|
$
|
3,197
|
|
$
|
2,508
|
|
|
1. Corporate includes
$(33) million and $(7) million of general corporate expenses for
the three months ended September 30, 2021 and 2020, respectively
and
$(97) million and $(94) million of general corporate expenses for
the nine months ended September 30, 2021 and 2020,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Earnings
of Nonconsolidated Affiliates by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
In millions
(Unaudited)
|
Sep 30,
2021
|
Sep 30,
2020
|
Sep 30,
2021
|
Sep 30,
2020
|
|
Electronics &
Industrial
|
$
|
13
|
|
$
|
8
|
|
$
|
32
|
|
$
|
27
|
|
|
Water &
Protection
|
7
|
|
7
|
|
27
|
|
19
|
|
|
Mobility &
Materials
|
3
|
|
5
|
|
11
|
|
13
|
|
|
Corporate
1
|
2
|
|
9
|
|
6
|
|
111
|
|
|
Total equity earnings
included in operating EBITDA (GAAP)
|
$
|
25
|
|
$
|
29
|
|
$
|
76
|
|
$
|
170
|
|
|
1. Corporate activity
in 2020 reflects equity earnings associated with the Hemlock
Semiconductor joint venture divested in the third quarter of
2020.
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
"Income (Loss) from continuing operations, net of tax"
to "Operating EBITDA"
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
In millions
(Unaudited)
|
Sep 30,
2021
|
Sep 30,
2020
|
Sep 30,
2021
|
Sep 30,
2020
|
|
Income (loss) from
continuing operations, net of tax (GAAP)
|
$
|
433
|
|
$
|
86
|
|
$
|
1,538
|
|
$
|
(2,853)
|
|
|
+ Provision for income
taxes on continuing operations
|
125
|
|
122
|
|
308
|
|
224
|
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
558
|
|
$
|
208
|
|
$
|
1,846
|
|
$
|
(2,629)
|
|
|
+ Depreciation and
amortization
|
370
|
|
345
|
|
1,031
|
|
1,039
|
|
|
- Interest
income 1
|
—
|
|
4
|
|
4
|
|
8
|
|
|
+ Interest
expense
|
115
|
|
165
|
|
390
|
|
517
|
|
|
- Non-operating
pension/OPEB benefit 1
|
14
|
|
4
|
|
39
|
|
23
|
|
|
- Foreign
exchange losses, net 1
|
(19)
|
|
(6)
|
|
(36)
|
|
(27)
|
|
|
- Significant
items
|
(39)
|
|
(190)
|
|
63
|
|
(3,585)
|
|
|
Operating EBITDA
(non-GAAP)
|
$
|
1,087
|
|
$
|
906
|
|
$
|
3,197
|
|
$
|
2,508
|
|
|
1. Included in
"Sundry income (expense) - net."
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
"Cash provided by operating activities" to Free Cash
Flow
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
In millions
(Unaudited)
|
Sep 30,
2021
|
Sep 30,
2020
|
Sep 30,
2021
|
Sep 30,
2020
|
|
Cash provided by
operating activities (GAAP) 1
|
$
|
842
|
|
$
|
1,274
|
|
$
|
1,660
|
|
$
|
2,794
|
|
|
Capital
expenditures
|
(208)
|
|
(203)
|
|
(707)
|
|
(922)
|
|
|
Free cash flow
(non-GAAP)
|
$
|
634
|
|
$
|
1,071
|
|
$
|
953
|
|
$
|
1,872
|
|
|
1. Refer to the
Consolidated Statement of Cash Flows included in the schedules
above for major GAAP cash flow categories as well as further detail
relating
to the changes in "Cash provided by operating activities" for the
nine month periods noted. In addition, includes cash activity
related to N&B prior to the N&B
Transaction.
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2021
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
558
|
|
$
|
420
|
|
$
|
0.80
|
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(29)
|
|
(29)
|
|
(0.05)
|
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(1)
|
|
—
|
|
—
|
|
Restructuring and
asset related charges -
net
|
Gain on divestitures
6
|
3
|
|
3
|
|
—
|
|
Sundry income
(expense) - net
|
Inventory step-up
amortization 7
|
(12)
|
|
(10)
|
|
(0.02)
|
|
Cost of
sales
|
Total significant
items
|
$
|
(39)
|
|
$
|
(36)
|
|
$
|
(0.07)
|
|
|
Less: Amortization of
intangibles
|
(196)
|
|
(153)
|
|
(0.30)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
14
|
|
10
|
|
0.02
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
$
|
779
|
|
$
|
599
|
|
$
|
1.15
|
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2020
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
208
|
|
$
|
79
|
|
$
|
0.11
|
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(22)
|
|
(17)
|
|
(0.03)
|
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(8)
|
|
(7)
|
|
(0.01)
|
|
Restructuring and
asset related charges -
net
|
Goodwill impairment
charges 8
|
(183)
|
|
(183)
|
|
(0.25)
|
|
Goodwill impairment
charges
|
Asset impairment
charges 9
|
(370)
|
|
(281)
|
|
(0.38)
|
|
Restructuring and
asset related charges -
net
|
Gain on divestitures
10
|
393
|
|
232
|
|
0.32
|
|
Sundry income
(expense) - net
|
Income tax related
item
|
—
|
|
17
|
|
0.02
|
|
Sundry income
(expense) - net
|
Total significant
items
|
$
|
(190)
|
|
$
|
(239)
|
|
$
|
(0.33)
|
|
|
Less: Amortization of
intangibles
|
(172)
|
|
(134)
|
|
(0.17)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
4
|
|
3
|
|
—
|
|
Sundry income
(expense) - net;
Provision for income taxes on
continuing operations
|
Adjusted results
(non-GAAP)
|
$
|
566
|
|
$
|
449
|
|
$
|
0.61
|
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income (loss)
from continuing operations available for DuPont common
stockholders. The income tax effect on significant items was
calculated based
upon the enacted tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings (loss) per
common share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to strategic initiatives
including the acquisition of Laird PM, the planned divestiture of
the held for
sale businesses and the divestiture of the Solamet® business
unit.
|
5.
|
Includes Board
approved restructuring plans and other asset related
charges.
|
6.
|
Reflects post closing
adjustments related previously divested businesses.
|
7.
|
Reflects the
amortization of the inventory step-up related to the Laird PM
Acquisition.
|
8.
|
Reflects non-cash
goodwill impairment charges related to former non-core businesses
now within Corporate.
|
9.
|
Reflects a $318
million pre-tax impairment charge recorded in third quarter 2020
related to long-lived asset groups within the Mobility &
Materials
segment and a $52 million pre-tax impairment charge related to
other intangible assets within Corporate.
|
10.
|
Reflects the
net benefit related to the sale of the trichlorosilane business
("TCS") and equity stake in Hemlock Semiconductor JV
(collectively,
"TCS/Hemlock"), which includes a settlement of a supply agreement
dispute, within Corporate.
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2021
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
1,846
|
|
$
|
1,512
|
|
$
|
2.73
|
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(58)
|
|
(54)
|
|
(0.10)
|
|
Acquisition,
integration and separation costs
|
Restructuring and
asset related charges - net 5
|
(13)
|
|
(10)
|
|
(0.02)
|
|
Restructuring and
asset related charges -
net
|
Gain on divestitures
6
|
146
|
|
111
|
|
0.20
|
|
Sundry income
(expense) - net
|
Inventory step-up
amortization 7
|
(12)
|
|
(10)
|
|
(0.02)
|
|
Cost of
sales
|
Income tax related
item 8
|
—
|
|
74
|
|
0.14
|
|
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$
|
63
|
|
$
|
111
|
|
$
|
0.20
|
|
|
Less: Amortization of
intangibles
|
(530)
|
|
(412)
|
|
(0.75)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
39
|
|
29
|
|
0.05
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
$
|
2,274
|
|
$
|
1,784
|
|
$
|
3.23
|
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2020
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
(2,629)
|
|
$
|
(2,873)
|
|
$
|
(3.90)
|
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(161)
|
|
(125)
|
|
(0.17)
|
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(139)
|
|
(108)
|
|
(0.15)
|
|
Restructuring and
asset related charges -
net
|
Goodwill impairment
charges 9
|
(3,214)
|
|
(3,214)
|
|
(4.37)
|
|
Goodwill impairment
charges
|
Asset impairment
charges 10
|
(661)
|
|
(503)
|
|
(0.68)
|
|
Restructuring and
asset related charges -
net
|
Gain on divestitures
11
|
590
|
|
334
|
|
0.45
|
|
Sundry income
(expense) - net
|
Income tax related
item
|
—
|
|
21
|
|
0.03
|
|
Sundry income
(expense) - net
|
Total significant
items
|
$
|
(3,585)
|
|
$
|
(3,595)
|
|
$
|
(4.89)
|
|
|
Less: Amortization of
intangibles
|
(527)
|
|
(408)
|
|
(0.54)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
23
|
|
17
|
|
0.02
|
|
Sundry income
(expense) - net;
Provision for income taxes on
continuing operations
|
Adjusted results
(non-GAAP)
|
$
|
1,460
|
|
$
|
1,113
|
|
$
|
1.51
|
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income (loss)
from continuing operations available for DuPont common
stockholders. The income tax effect on significant items was
calculated based
upon the enacted tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings (loss) per
common share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to strategic initiatives
including the acquisition of Laird PM, the planned divestiture of
the held for
sale businesses and the divestiture of the Solamet® business unit,
post-DWDP Merger integration and the DWDP Distributions.
|
5.
|
Includes Board
approved restructuring plans and other asset related
charges.
|
6.
|
Reflects the gain
from the sale of the Solamet® business within Corporate and post
closing adjustments related previously divested
businesses.
|
7.
|
Reflects the
amortization of the inventory step-up related to the Laird PM
Acquisition.
|
8.
|
Reflects a net $74
million tax benefit primarily related to a $59 million tax benefit
resulting from the impact of tax reform in Switzerland.
|
9.
|
Reflects non-cash
goodwill impairment charges recorded as follows: a $533 million
charge recorded in the first quarter 2020 related to a former
non-core
business now within Corporate; a $2,498 million charge recorded in
the second quarter 2020 related to the Mobility & Materials and
Electronics &
Industrial segments; and $183 million of charges recorded in the
third quarter 2020 related to former non-core businesses now within
Corporate.
|
10.
|
Reflects a $270
million pre-tax impairment charge recorded in the first quarter
2020 related to a long-lived asset group of a former non-core
business
which is now within Corporate, a $21 million pre-tax impairment
charge recorded in the second quarter 2020 related to other
intangible assets within the
Mobility & Materials segment, a $318 million pre-tax impairment
charge recorded in third quarter 2020 related to long-lived asset
groups within the
Mobility & Materials segment and a $52 million pre-tax
impairment charge related to other intangible assets within
Corporate.
|
11.
|
Reflects a gain on
the first quarter 2020 sale of the Company's Compound Semiconductor
Solutions business within the Electronics & Industrial
segment
and the net benefit related to the sale of the trichlorosilane
business ("TCS") and equity stake in Hemlock Semiconductor JV
(collectively,
"TCS/Hemlock"), which includes a settlement of a supply agreement
dispute, during the third quarter 2020 within Corporate.
|
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SOURCE DuPont