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Share Name | Share Symbol | Market | Type |
---|---|---|---|
DuPont de Nemours Inc | NYSE:DD | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.08 | -0.10% | 77.67 | 78.38 | 77.14 | 78.38 | 2,391,433 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
51-0014090
|
(State or other Jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or Organization)
|
|
Identification No.)
|
Large Accelerated Filer
x
|
|
Accelerated Filer
o
|
|
|
|
Non-Accelerated Filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
|
Emerging growth company
o
|
|
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Page
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|
Item 1.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions, except per share amounts)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Net sales
|
$
|
8,545
|
|
$
|
6,971
|
|
$
|
15,244
|
|
$
|
14,290
|
|
Cost of goods sold
|
5,669
|
|
3,963
|
|
10,516
|
|
8,115
|
|
||||
Other operating charges
|
|
168
|
|
|
368
|
|
||||||
Research and development expense
|
396
|
|
387
|
|
778
|
|
755
|
|
||||
Selling, general and administrative expenses
|
1,182
|
|
1,256
|
|
2,141
|
|
2,446
|
|
||||
Amortization of intangibles
|
333
|
|
|
648
|
|
|
||||||
Restructuring and asset related charges - net
|
91
|
|
160
|
|
188
|
|
312
|
|
||||
Integration and separation costs
|
327
|
|
|
582
|
|
|
||||||
Sundry income (expense) - net
|
194
|
|
(132
|
)
|
241
|
|
70
|
|
||||
Interest expense
|
86
|
|
99
|
|
166
|
|
183
|
|
||||
Income from continuing operations before income taxes
|
655
|
|
806
|
|
466
|
|
2,181
|
|
||||
Provision for income taxes on continuing operations
|
141
|
|
84
|
|
168
|
|
281
|
|
||||
Income from continuing operations after income taxes
|
514
|
|
722
|
|
298
|
|
1,900
|
|
||||
Income (loss) from discontinued operations after income taxes
|
—
|
|
147
|
|
(5
|
)
|
90
|
|
||||
Net income
|
514
|
|
869
|
|
293
|
|
1,990
|
|
||||
Net income attributable to noncontrolling interests
|
1
|
|
7
|
|
8
|
|
15
|
|
||||
Net income attributable to DuPont
|
$
|
513
|
|
$
|
862
|
|
$
|
285
|
|
$
|
1,975
|
|
Basic earnings per share of common stock:
|
|
|
|
|
||||||||
Basic earnings per share of common stock from continuing operations
|
|
$
|
0.82
|
|
|
$
|
2.17
|
|
||||
Basic earnings per share of common stock from discontinued operations
|
|
0.17
|
|
|
0.10
|
|
||||||
Basic earnings per share of common stock
|
|
$
|
0.99
|
|
|
$
|
2.27
|
|
||||
Diluted earnings per share of common stock:
|
|
|
|
|
||||||||
Diluted earnings per share of common stock from continuing operations
|
|
$
|
0.82
|
|
|
$
|
2.16
|
|
||||
Diluted earnings per share of common stock from discontinued operations
|
|
0.17
|
|
|
0.10
|
|
||||||
Diluted earnings per share of common stock
|
|
$
|
0.99
|
|
|
$
|
2.26
|
|
||||
Dividends declared per share of common stock
|
|
$
|
0.38
|
|
|
$
|
0.76
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Net income
|
$
|
514
|
|
$
|
869
|
|
$
|
293
|
|
$
|
1,990
|
|
Other comprehensive (loss) income - net of tax:
|
|
|
|
|
||||||||
Cumulative translation adjustments
|
(1,923
|
)
|
275
|
|
(966
|
)
|
653
|
|
||||
Adjustments to pension benefit plans
|
3
|
|
88
|
|
7
|
|
197
|
|
||||
Adjustments to other benefit plans
|
—
|
|
3
|
|
—
|
|
7
|
|
||||
Derivative instruments
|
(16
|
)
|
(8
|
)
|
(5
|
)
|
(11
|
)
|
||||
Total other comprehensive (loss) income
|
(1,936
|
)
|
358
|
|
(964
|
)
|
846
|
|
||||
Comprehensive (loss) income
|
(1,422
|
)
|
1,227
|
|
(671
|
)
|
2,836
|
|
||||
Comprehensive income attributable to noncontrolling interests - net of tax
|
1
|
|
7
|
|
8
|
|
15
|
|
||||
Comprehensive (loss) income attributable to DuPont
|
$
|
(1,423
|
)
|
$
|
1,220
|
|
$
|
(679
|
)
|
$
|
2,821
|
|
|
Successor
|
|||||
(In millions, except share amounts)
|
June 30, 2018
|
December 31, 2017
|
||||
Assets
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,421
|
|
$
|
7,250
|
|
Marketable securities
|
374
|
|
952
|
|
||
Accounts and notes receivable - net
|
7,734
|
|
5,239
|
|
||
Inventories
|
6,303
|
|
8,633
|
|
||
Other current assets
|
1,311
|
|
981
|
|
||
Total current assets
|
20,143
|
|
23,055
|
|
||
Investment in nonconsolidated affiliates
|
1,459
|
|
1,595
|
|
||
Property, plant and equipment - net of accumulated depreciation (June 30, 2018 - $1,071; December 31, 2017 - $443)
|
11,832
|
|
12,435
|
|
||
Goodwill
|
45,510
|
|
45,589
|
|
||
Other intangible assets
|
26,866
|
|
27,726
|
|
||
Deferred income taxes
|
361
|
|
480
|
|
||
Other assets
|
1,839
|
|
2,084
|
|
||
Total Assets
|
$
|
108,010
|
|
$
|
112,964
|
|
Liabilities and Equity
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
||
Short-term borrowings and capital lease obligations
|
$
|
3,701
|
|
$
|
2,779
|
|
Accounts payable
|
4,002
|
|
4,831
|
|
||
Income taxes payable
|
138
|
|
149
|
|
||
Accrued and other current liabilities
|
3,024
|
|
4,384
|
|
||
Total current liabilities
|
10,865
|
|
12,143
|
|
||
Long-Term Debt
|
9,728
|
|
10,291
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
5,424
|
|
5,836
|
|
||
Pension and other post employment benefits - noncurrent
|
7,389
|
|
7,787
|
|
||
Other noncurrent obligations
|
1,837
|
|
1,975
|
|
||
Total noncurrent liabilities
|
24,378
|
|
25,889
|
|
||
Commitments and contingent liabilities
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
||
Preferred stock, without par value – cumulative; 23,000,000 shares authorized;
issued at June 30, 2018 and December 31, 2017:
|
|
|
||||
$4.50 Series – 1,673,000 shares (callable at $120)
|
169
|
|
169
|
|
||
$3.50 Series – 700,000 shares (callable at $102)
|
70
|
|
70
|
|
||
Common stock, $.30 par value; 1,800,000,000 shares authorized;
issued at June 30, 2018 and December 31, 2017 - 100
|
—
|
|
—
|
|
||
Additional paid-in capital
|
74,845
|
|
74,727
|
|
||
(Accumulated deficit) Retained earnings
|
(1,201
|
)
|
175
|
|
||
Accumulated other comprehensive loss
|
(1,345
|
)
|
(381
|
)
|
||
Total DuPont stockholders’ equity
|
72,538
|
|
74,760
|
|
||
Noncontrolling interests
|
229
|
|
172
|
|
||
Total equity
|
72,767
|
|
74,932
|
|
||
Total Liabilities and Equity
|
$
|
108,010
|
|
$
|
112,964
|
|
|
Successor
|
Predecessor
|
||||
(In millions)
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||
Operating activities
|
|
|
||||
Net income
|
$
|
293
|
|
$
|
1,990
|
|
Adjustments to reconcile net income to cash used for operating activities:
|
|
|
|
|
||
Depreciation and amortization
|
1,314
|
|
570
|
|
||
Provision for deferred income tax
|
(99
|
)
|
|
|
||
Net periodic pension (benefit) cost
|
(163
|
)
|
219
|
|
||
Pension contributions
|
(123
|
)
|
(2,994
|
)
|
||
Net gain on sales of property, businesses, consolidated companies, and investments
|
(13
|
)
|
(202
|
)
|
||
Restructuring and asset related charges - net
|
188
|
|
|
|
||
Asset related charges
|
|
|
279
|
|
||
Amortization of inventory step-up
|
1,385
|
|
|
|
||
Other net loss
|
248
|
|
279
|
|
||
Changes in operating assets and liabilities - net
|
(4,621
|
)
|
(4,196
|
)
|
||
Cash used for operating activities
|
(1,591
|
)
|
(4,055
|
)
|
||
Investing activities
|
|
|
|
|||
Capital expenditures
|
(601
|
)
|
(524
|
)
|
||
Proceeds from sales of property, businesses, and consolidated companies - net of cash divested
|
50
|
|
296
|
|
||
Investments in and loans to nonconsolidated affiliates
|
—
|
|
(22
|
)
|
||
Purchases of investments
|
(991
|
)
|
(4,243
|
)
|
||
Proceeds from sales and maturities of investments
|
1,576
|
|
2,633
|
|
||
Foreign currency exchange contract settlements
|
|
|
(29
|
)
|
||
Other investing activities - net
|
—
|
|
(43
|
)
|
||
Cash provided by (used for) investing activities
|
34
|
|
(1,932
|
)
|
||
Financing activities
|
|
|
|
|||
Change in short-term (less than 90 days) borrowings
|
454
|
|
3,011
|
|
||
Proceeds from issuance of long-term debt
|
254
|
|
2,234
|
|
||
Payments on long-term debt
|
(272
|
)
|
(204
|
)
|
||
Proceeds from exercise of stock options
|
57
|
|
203
|
|
||
Dividends paid to stockholders
|
(5
|
)
|
(664
|
)
|
||
Distributions to DowDuPont
|
(1,658
|
)
|
|
|
||
Other financing activities
|
(41
|
)
|
(49
|
)
|
||
Cash (used for) provided by financing activities
|
(1,211
|
)
|
4,531
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(103
|
)
|
105
|
|
||
Change in cash classified as held for sale
|
—
|
|
(18
|
)
|
||
Decrease in cash, cash equivalents and restricted cash
|
(2,871
|
)
|
(1,369
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
7,808
|
|
4,548
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
4,937
|
|
$
|
3,179
|
|
|
E.I. du Pont de Nemours and Company
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
|
|
Note
|
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
•
|
Included royalty income within net sales. In the Predecessor periods, royalty income is included within sundry income (expense) - net.
|
•
|
Eliminated the other operating charges line item. In the Successor periods, a majority of these costs are included within cost of goods sold. These costs are also included in selling, general and administrative expenses and amortization of intangibles in the Successor periods.
|
•
|
Presented amortization of intangibles as a separate line item. In the Predecessor periods, amortization is included within selling, general and administrative expenses, other operating charges, and research and development expenses.
|
•
|
Presented integration and separation costs as a separate line item. In the Predecessor periods, these costs are included within selling, general and administrative expenses.
|
•
|
Included interest accrued related to unrecognized tax benefits within the provision for income taxes on continuing operations. In the Predecessor periods, interest accrued related to unrecognized tax benefits is included within sundry income (expense) - net.
|
•
|
Included foreign currency exchange contract settlements within cash flows from operating activities, regardless of hedge accounting qualification. In the Predecessor period, DuPont reflected non-qualified hedge programs, specifically forward contracts, options and cash collateral activity, within cash flows from investing activities. In the Predecessor period, DuPont reflected cash flows from qualified hedge programs within the line item to which the program related (i.e., revenue hedge cash flows presented within changes from accounts receivable).
|
(In millions, except per share amounts)
|
As Reported
December 31, 2017
|
Effect of Adoption of ASU 2014-09
|
Updated
January 1, 2018
|
||||||
Current assets
|
|
|
|
||||||
Accounts and notes receivable - net
|
$
|
5,239
|
|
$
|
79
|
|
$
|
5,318
|
|
Inventories
|
8,633
|
|
(53
|
)
|
8,580
|
|
|||
Other current assets
|
981
|
|
101
|
|
1,082
|
|
|||
|
|
|
|
|
|
|
|||
Deferred income taxes
|
$
|
480
|
|
$
|
1
|
|
$
|
481
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
||||||
Current liabilities
|
|
|
|
||||||
Accounts payable
|
$
|
4,831
|
|
$
|
(3
|
)
|
$
|
4,828
|
|
Accrued and other current liabilities
|
4,384
|
|
120
|
|
4,504
|
|
|||
|
|
|
|
|
|
|
|||
Deferred income tax liabilities
|
$
|
5,836
|
|
$
|
3
|
|
$
|
5,839
|
|
|
|
|
|
|
|
|
|||
Retained earnings
|
$
|
175
|
|
$
|
8
|
|
$
|
183
|
|
|
June 30, 2018
|
||||||||
(In millions, except per share amounts)
|
As Reported
|
Effect of Change
|
Balance without Adoption of Topic 606
|
||||||
Current assets
|
|
|
|
||||||
Accounts and notes receivable - net
|
$
|
7,734
|
|
$
|
(150
|
)
|
$
|
7,584
|
|
Inventories
|
6,303
|
|
57
|
|
6,360
|
|
|||
Other current assets
|
1,311
|
|
(119
|
)
|
1,192
|
|
|||
|
|
|
|
|
|
|
|||
Deferred income taxes
|
$
|
361
|
|
$
|
(1
|
)
|
$
|
360
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
||||||
Current liabilities
|
|
|
|
||||||
Accrued and other current liabilities
|
$
|
3,024
|
|
$
|
(168
|
)
|
$
|
2,856
|
|
|
|
|
|
|
|
|
|||
Deferred income tax liabilities
|
$
|
5,424
|
|
$
|
(11
|
)
|
$
|
5,413
|
|
|
|
|
|
|
|
|
|||
Accumulated deficit
|
$
|
(1,201
|
)
|
$
|
(34
|
)
|
$
|
(1,235
|
)
|
|
For the Three Months Ended June 30, 2018 (Successor)
|
||||||||
(In millions, except per share amounts)
|
As Reported
|
Effect of Change
|
Balance without Adoption of Topic 606
|
||||||
Net sales
|
$
|
8,545
|
|
$
|
(49
|
)
|
$
|
8,496
|
|
Sundry income (expense) - net
|
$
|
194
|
|
$
|
31
|
|
$
|
225
|
|
Income from continuing operations before income taxes
|
$
|
655
|
|
$
|
(18
|
)
|
$
|
637
|
|
Provision for income taxes on continuing operations
|
$
|
141
|
|
$
|
(4
|
)
|
$
|
137
|
|
Income from continuing operations after income taxes
|
$
|
514
|
|
$
|
(14
|
)
|
$
|
500
|
|
|
For the Six Months Ended June 30, 2018 (Successor)
|
||||||||
(In millions, except per share amounts)
|
As Reported
|
Effect of Change
|
Balance without Adoption of Topic 606
|
||||||
Net sales
|
$
|
15,244
|
|
$
|
(72
|
)
|
$
|
15,172
|
|
Sundry income (expense) - net
|
$
|
241
|
|
$
|
37
|
|
$
|
278
|
|
Income from continuing operations before income taxes
|
$
|
466
|
|
$
|
(35
|
)
|
$
|
431
|
|
Provision for income taxes on continuing operations
|
$
|
168
|
|
$
|
(8
|
)
|
$
|
160
|
|
Income from continuing operations after income taxes
|
$
|
298
|
|
$
|
(27
|
)
|
$
|
271
|
|
Summary of Changes to the interim Consolidated Income Statement
|
For the Three Months Ended June 30, 2017 (Predecessor)
|
||||||||
(in millions)
|
As Restated for Discontinued Operations
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
4,021
|
|
$
|
(58
|
)
|
$
|
3,963
|
|
Research and development expense
|
$
|
402
|
|
$
|
(15
|
)
|
$
|
387
|
|
Selling, general and administrative expenses
|
$
|
1,287
|
|
$
|
(31
|
)
|
$
|
1,256
|
|
Sundry income (expense) - net
|
$
|
(28
|
)
|
$
|
(104
|
)
|
$
|
(132
|
)
|
Summary of Changes to the interim Consolidated Income Statement
|
For the Six Months Ended June 30, 2017 (Predecessor)
|
||||||||
(in millions)
|
As Restated for Discontinued Operations
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
8,230
|
|
$
|
(115
|
)
|
$
|
8,115
|
|
Research and development expense
|
$
|
786
|
|
$
|
(31
|
)
|
$
|
755
|
|
Selling, general and administrative expenses
|
$
|
2,508
|
|
$
|
(62
|
)
|
$
|
2,446
|
|
Sundry income (expense) - net
|
$
|
278
|
|
$
|
(208
|
)
|
$
|
70
|
|
(In millions, except exchange ratio)
|
|
||
DuPont Common Stock outstanding as of the Merger Effectiveness Time
|
868.3
|
|
|
DuPont exchange ratio
|
1.2820
|
|
|
DowDuPont Common Stock issued in exchange for DuPont Common Stock
|
1,113.2
|
|
|
Fair value of DowDuPont Common Stock issued
1
|
$
|
74,195
|
|
Fair value of DowDuPont equity awards issued in exchange for outstanding DuPont equity awards
2
|
485
|
|
|
Total consideration
|
$
|
74,680
|
|
1.
|
Amount was determined based on the price per share of Dow Common Stock of
$66.65
on August 31, 2017.
|
2.
|
Represents the fair value of replacement awards issued for DuPont's equity awards outstanding immediately before the Merger and attributable to the service periods prior to the Merger. The previous DuPont equity awards were converted into the right to receive
1.2820
shares of DowDuPont Common Stock.
|
|
Estimated fair value as adjusted
|
||
(In millions)
|
|||
Fair Value of Assets as of the Merger Effectiveness Time
|
|
||
Cash and cash equivalents
|
$
|
4,005
|
|
Marketable securities
|
2,849
|
|
|
Accounts and notes receivable
|
7,847
|
|
|
Inventories
|
8,806
|
|
|
Other current assets
|
420
|
|
|
Investment in nonconsolidated affiliates
|
1,626
|
|
|
Assets held for sale - current
|
3,732
|
|
|
Property, plant and equipment
|
11,711
|
|
|
Goodwill
|
45,499
|
|
|
Other intangible assets
|
27,104
|
|
|
Deferred income tax assets
|
284
|
|
|
Other assets
|
2,066
|
|
|
Total Assets
|
$
|
115,949
|
|
Fair Value of Liabilities
|
|
||
Short-term borrowings and capital lease obligations
|
$
|
5,319
|
|
Accounts payable
|
3,298
|
|
|
Income taxes payable
|
261
|
|
|
Accrued and other current liabilities
|
3,517
|
|
|
Liabilities held for sale - current
|
125
|
|
|
Long-term debt
|
9,878
|
|
|
Deferred income tax liabilities
|
8,319
|
|
|
Pension and other post employment benefits - noncurrent
|
8,056
|
|
|
Other noncurrent obligations
|
2,023
|
|
|
Total Liabilities
|
$
|
40,796
|
|
Noncontrolling interests
|
234
|
|
|
Preferred stock
|
239
|
|
|
Fair Value of Net Assets (Consideration for the Merger)
|
$
|
74,680
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Integration and separation costs
|
$
|
327
|
|
|
$
|
582
|
|
|
||||
Selling, general and administrative expenses
|
|
$
|
201
|
|
|
$
|
371
|
|
|
Predecessor
|
|||||
(In millions)
|
Three Months Ended June 30, 2017
|
Six Months Ended
June 30, 2017 |
||||
Net sales
|
$
|
453
|
|
$
|
877
|
|
Cost of goods sold
|
171
|
|
333
|
|
||
Other operating charges
|
8
|
|
12
|
|
||
Research and development expenses
|
39
|
|
71
|
|
||
Selling, general and administrative expenses
|
61
|
|
100
|
|
||
Sundry income - net
|
7
|
|
7
|
|
||
Income from discontinued operations before income taxes
|
181
|
|
368
|
|
||
Provision for income taxes
|
44
|
|
71
|
|
||
Income from discontinued operations after income taxes
|
$
|
137
|
|
$
|
297
|
|
|
Predecessor
|
|||||
(In millions)
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2017
|
||||
Depreciation
|
$
|
8
|
|
$
|
16
|
|
Capital expenditures
|
$
|
4
|
|
$
|
8
|
|
Contract Balances
|
June 30, 2018
|
Topic 606 Adjustments
January 1, 2018
|
December 31, 2017
|
||||||
(In millions)
|
|||||||||
Accounts and notes receivable - trade
1
|
$
|
6,428
|
|
$
|
87
|
|
$
|
3,976
|
|
Contract assets - current
2
|
$
|
62
|
|
$
|
40
|
|
$
|
—
|
|
Deferred revenue - current
3
|
$
|
392
|
|
$
|
2
|
|
$
|
2,014
|
|
Deferred revenue - noncurrent
4
|
$
|
42
|
|
$
|
—
|
|
$
|
48
|
|
1.
|
Included in accounts and notes receivable - net in the Consolidated Balance Sheets.
|
2.
|
Included in other current assets in the Consolidated Balance Sheets.
|
3.
|
Included in accrued and other current liabilities in the Consolidated Balance Sheets.
|
4.
|
Included in other noncurrent obligations in the Consolidated Balance Sheets.
|
(In millions)
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
||||
Agriculture
|
$
|
4,058
|
|
$
|
6,401
|
|
Packaging and Specialty Plastics
|
416
|
|
835
|
|
||
Electronics and Imaging
|
553
|
|
1,080
|
|
||
Nutrition and Health
|
1,057
|
|
2,081
|
|
||
Industrial Biosciences
|
429
|
|
835
|
|
||
Transportation and Advanced Polymers
|
1,142
|
|
2,263
|
|
||
Safety and Construction
|
889
|
|
1,744
|
|
||
Other
|
1
|
|
5
|
|
||
Total
|
$
|
8,545
|
|
$
|
15,244
|
|
(In millions)
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
||||
U.S. & Canada
|
$
|
4,755
|
|
$
|
7,270
|
|
EMEA
1
|
1,564
|
|
3,730
|
|
||
Asia Pacific
|
1,737
|
|
3,272
|
|
||
Latin America
|
489
|
|
972
|
|
||
Total
|
$
|
8,545
|
|
$
|
15,244
|
|
1.
|
Europe, Middle East, and Africa (EMEA).
|
(In millions)
|
Severance and Related Benefit Costs
|
Contract Termination Charges
|
Asset-Related Charges
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
133
|
|
$
|
28
|
|
$
|
—
|
|
$
|
161
|
|
Charges to income from continuing operations for the six months ended June 30, 2018
|
152
|
|
33
|
|
6
|
|
191
|
|
||||
Payments
|
(57
|
)
|
(28
|
)
|
—
|
|
(85
|
)
|
||||
Net translation adjustment
|
(2
|
)
|
—
|
|
—
|
|
(2
|
)
|
||||
Asset write-offs
|
—
|
|
—
|
|
(6
|
)
|
(6
|
)
|
||||
Balance at June 30, 2018
|
$
|
226
|
|
$
|
33
|
|
$
|
—
|
|
$
|
259
|
|
|
Successor
|
|||||
(In millions)
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
||||
Net sales
|
$
|
34
|
|
$
|
78
|
|
Cost of goods sold
|
$
|
39
|
|
$
|
63
|
|
Sundry Income (Expense) - Net
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
||||||||
Royalty income
1
|
|
|
$
|
28
|
|
|
|
$
|
73
|
|
||
Interest income
|
$
|
30
|
|
32
|
|
58
|
|
57
|
|
|||
Equity in earnings of affiliates - net
|
19
|
|
24
|
|
33
|
|
42
|
|
||||
Net gain on sales of businesses and other assets
2
|
11
|
|
11
|
|
13
|
|
203
|
|
||||
Net exchange gains (losses)
|
23
|
|
(140
|
)
|
(109
|
)
|
(199
|
)
|
||||
Non-operating pension and other post employment benefit credit (cost)
3
|
95
|
|
(104
|
)
|
187
|
|
(208
|
)
|
||||
Miscellaneous income and expenses - net
4
|
16
|
|
17
|
|
59
|
|
102
|
|
||||
Sundry income (expense) - net
|
$
|
194
|
|
$
|
(132
|
)
|
$
|
241
|
|
$
|
70
|
|
1.
|
In the Successor periods, royalty income of
$44 million
and
$85 million
is included in net sales for the three and six months ended June 30, 2018, respectively.
|
2.
|
Includes a pre-tax gain of
$162 million
(
$86 million
net of tax) for the six months ended June 30, 2017 related to the sale of global food safety diagnostics. See Note
4
for additional information.
|
3.
|
Includes non-service related components of net periodic benefit credits (costs) (interest cost, expected return on plan assets, amortization of unrecognized (gain) loss, amortization of prior service benefit, and curtailment/settlement gain). See Note
2
for discussion of the retrospective adoption of ASU No. 2017-07.
|
4.
|
Miscellaneous income and expenses - net, includes interest items (Predecessor periods only), gains related to litigation settlements, and other items.
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
||||||||
Subsidiary Monetary Position (Losses) Gains
|
|
|
|
|
||||||||
Pre-tax exchange losses
|
$
|
(154
|
)
|
$
|
(54
|
)
|
$
|
(105
|
)
|
$
|
(28
|
)
|
Local tax (expenses) benefits
|
(8
|
)
|
94
|
|
24
|
|
130
|
|
||||
Net after-tax impact from subsidiary exchange (losses) gains
|
$
|
(162
|
)
|
$
|
40
|
|
$
|
(81
|
)
|
$
|
102
|
|
|
|
|
|
|
||||||||
Hedging Program Gains (Losses)
|
|
|
|
|
||||||||
Pre-tax exchange gains (losses)
1
|
$
|
177
|
|
$
|
(86
|
)
|
$
|
(4
|
)
|
$
|
(171
|
)
|
Tax (expenses) benefits
|
(41
|
)
|
31
|
|
1
|
|
61
|
|
||||
Net after-tax impact from hedging program exchange gains (losses)
|
$
|
136
|
|
$
|
(55
|
)
|
$
|
(3
|
)
|
$
|
(110
|
)
|
|
|
|
|
|
||||||||
Total Exchange Gains (Losses)
|
|
|
|
|
||||||||
Pre-tax exchange gains (losses)
|
$
|
23
|
|
$
|
(140
|
)
|
$
|
(109
|
)
|
$
|
(199
|
)
|
Tax (expenses) benefits
|
(49
|
)
|
125
|
|
25
|
|
191
|
|
||||
Net after-tax exchange losses
|
$
|
(26
|
)
|
$
|
(15
|
)
|
$
|
(84
|
)
|
$
|
(8
|
)
|
1.
|
Includes a
$(50) million
foreign exchange loss for the six months ended June 30, 2018 related to adjustments to foreign currency exchange contracts as a result of U.S. tax reform.
|
|
Successor
|
|||||
(In millions)
|
June 30, 2018
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
4,421
|
|
$
|
7,250
|
|
Restricted cash
|
516
|
|
558
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
4,937
|
|
$
|
7,808
|
|
•
|
As a result of The Act, the company remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally
21 percent
. However, the company is still analyzing certain aspects of The Act and refining its calculations. In the three and
six months ended June 30, 2018
, charges of
$7 million
and
$55 million
, respectively, were recorded to provision for income taxes on continuing operations in the company's interim Consolidated Income Statements to adjust the provisional amount related to the remeasurement of the company's deferred tax balance, resulting in a benefit of
$(2,661) million
since the enactment of The Act.
|
•
|
The Act requires a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits (“E&P”), which results in a one-time transition tax. The company has not yet completed its calculation of the total post-1986 foreign E&P for its foreign subsidiaries as E&P will not be finalized until the Federal income tax return is filed. The company has not recorded a change to the
$715 million
provisional charge recorded during the fourth quarter 2017 with respect to the one-time transition tax.
|
•
|
In the
six months ended June 30, 2018
, the company recognized a charge of
$16 million
to provision for income taxes on continuing operations in the company's interim Consolidated Income Statements as a result of an indirect impact of the Act related to certain inventory.
|
•
|
For tax years beginning after December 31, 2017, The Act introduces new provisions for U.S. taxation of certain global intangible low-taxed income ("GILTI"). The company is evaluating the policy election on whether the additional liability will be recorded in the period in which it is incurred or recognized for the basis differences that would be expected to reverse in future years.
|
|
Predecessor
|
|||||
(In millions, except share amounts)
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2017
|
||||
Numerator:
|
|
|
||||
Income from continuing operations after income taxes attributable to DuPont
|
$
|
717
|
|
$
|
1,888
|
|
Preferred dividends
|
(3
|
)
|
(5
|
)
|
||
Income from continuing operations after income taxes available to DuPont common stockholders
|
714
|
|
1,883
|
|
||
|
|
|
||||
Income from discontinued operations after income taxes available to DuPont common stockholders
|
145
|
|
87
|
|
||
|
|
|
|
|||
Net income available to common stockholders
|
$
|
859
|
|
$
|
1,970
|
|
|
|
|
||||
Denominator:
|
|
|
||||
Weighted-average number of common shares outstanding - Basic
|
868,481,000
|
|
867,496,000
|
|
||
Dilutive effect of the company’s employee compensation plans
|
4,269,000
|
|
4,424,000
|
|
||
Weighted-average number of common shares outstanding - Diluted
|
872,750,000
|
|
871,920,000
|
|
|
Predecessor
|
|||
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2017
|
||
Average number of stock options
|
—
|
|
3,000
|
|
|
Successor
|
|||||
(In millions)
|
June 30,
2018 |
December 31,
2017 |
||||
Finished products
|
$
|
3,645
|
|
$
|
4,500
|
|
Semi-finished products
|
1,300
|
|
2,769
|
|
||
Raw materials
|
520
|
|
371
|
|
||
Stores and supplies
|
306
|
|
447
|
|
||
Total
|
$
|
5,771
|
|
$
|
8,087
|
|
Adjustment of inventories to a last-in, first out (LIFO) basis
|
532
|
|
546
|
|
||
Total inventories
|
$
|
6,303
|
|
$
|
8,633
|
|
(In millions)
|
|
||
Balance as of December 31, 2017
|
$
|
45,589
|
|
Currency translation adjustment
|
(484
|
)
|
|
Measurement period adjustments - Merger
|
394
|
|
|
Measurement period adjustments - H&N Business
|
11
|
|
|
Balance as of June 30, 2018
|
$
|
45,510
|
|
|
Successor
|
|||||||||||||||||
(In millions)
|
June 30, 2018
|
December 31, 2017
|
||||||||||||||||
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||||
Intangible assets subject to amortization (Definite-lived):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer-related
|
$
|
9,412
|
|
$
|
(469
|
)
|
$
|
8,943
|
|
$
|
9,502
|
|
$
|
(186
|
)
|
$
|
9,316
|
|
Developed technology
|
4,497
|
|
(390
|
)
|
4,107
|
|
4,364
|
|
(144
|
)
|
4,220
|
|
||||||
Trademarks/trade names
|
1,086
|
|
(70
|
)
|
1,016
|
|
1,117
|
|
(26
|
)
|
1,091
|
|
||||||
Favorable supply contracts
|
475
|
|
(64
|
)
|
411
|
|
495
|
|
(17
|
)
|
478
|
|
||||||
Microbial cell factories
|
391
|
|
(14
|
)
|
377
|
|
397
|
|
(6
|
)
|
391
|
|
||||||
Other
1
|
378
|
|
(20
|
)
|
358
|
|
459
|
|
(10
|
)
|
449
|
|
||||||
Total other intangible assets with finite lives
|
16,239
|
|
(1,027
|
)
|
15,212
|
|
16,334
|
|
(389
|
)
|
15,945
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization (Indefinite-lived):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In-process research and development ("IPR&D")
|
630
|
|
—
|
|
630
|
|
660
|
|
—
|
|
660
|
|
||||||
Germplasm
2
|
6,265
|
|
—
|
|
6,265
|
|
6,265
|
|
—
|
|
6,265
|
|
||||||
Trademarks / trade names
|
4,759
|
|
—
|
|
4,759
|
|
4,856
|
|
—
|
|
4,856
|
|
||||||
Total other intangible assets
|
11,654
|
|
—
|
|
11,654
|
|
11,781
|
|
—
|
|
11,781
|
|
||||||
Total
|
$
|
27,893
|
|
$
|
(1,027
|
)
|
$
|
26,866
|
|
$
|
28,115
|
|
$
|
(389
|
)
|
$
|
27,726
|
|
1.
|
Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
|
2.
|
Germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. The company recognized germplasm as an intangible asset upon the acquisition of Pioneer. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.
|
Guarantees at June 30, 2018 (Successor)
|
Final Expiration Year
|
Maximum Future Payments
|
||
(In millions)
|
||||
Obligations for customers
1
:
|
|
|
||
Bank borrowings
|
2022
|
$
|
89
|
|
Obligations for non-consolidated affiliates
2
:
|
|
|
|
|
Bank borrowings
|
2018
|
167
|
|
|
Residual value guarantees
3
|
2029
|
36
|
|
|
Total guarantees
|
|
$
|
292
|
|
1.
|
Existing guarantees for select customers, as part of contractual agreements. The terms of the guarantees are equivalent to the terms of the customer loans that are primarily made to finance customer invoices. Of the total maximum future payments,
$85 million
had terms less than a year.
|
2.
|
Existing guarantees for non-consolidated affiliates' liquidity needs in normal operations.
|
3.
|
The company provides guarantees related to leased assets specifying the residual value that will be available to the lessor at lease termination through sale of the assets to the lessee or third parties.
|
(In millions)
|
Cumulative Translation Adjustment
1
|
Derivative Instruments
|
Pension Benefit Plans
|
Other Benefit Plans
|
Unrealized Gain (Loss) on Investments
|
Total
|
||||||||||||
2017
|
|
|
|
|
|
|
||||||||||||
Balance January 1, 2017 (
Predecessor
)
|
$
|
(2,843
|
)
|
$
|
7
|
|
$
|
(6,720
|
)
|
$
|
(357
|
)
|
$
|
2
|
|
$
|
(9,911
|
)
|
Other comprehensive income (loss) before reclassifications
|
653
|
|
2
|
|
(47
|
)
|
—
|
|
1
|
|
609
|
|
||||||
Amounts reclassified from accumulated other comprehensive (loss) income
|
—
|
|
(13
|
)
|
244
|
|
7
|
|
(1
|
)
|
237
|
|
||||||
Net other comprehensive income (loss)
|
653
|
|
(11
|
)
|
197
|
|
7
|
|
—
|
|
846
|
|
||||||
Balance June 30, 2017
|
$
|
(2,190
|
)
|
$
|
(4
|
)
|
$
|
(6,523
|
)
|
$
|
(350
|
)
|
$
|
2
|
|
$
|
(9,065
|
)
|
|
|
|
|
|
|
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance January 1, 2018 (
Successor
)
|
$
|
(454
|
)
|
$
|
(2
|
)
|
$
|
128
|
|
$
|
(53
|
)
|
$
|
—
|
|
$
|
(381
|
)
|
Other comprehensive (loss) income before reclassifications
|
(966
|
)
|
—
|
|
9
|
|
—
|
|
—
|
|
(957
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive (loss) income
|
—
|
|
(5
|
)
|
(2
|
)
|
—
|
|
—
|
|
(7
|
)
|
||||||
Net other comprehensive (loss) income
|
(966
|
)
|
(5
|
)
|
7
|
|
—
|
|
—
|
|
(964
|
)
|
||||||
Balance June 30, 2018
|
$
|
(1,420
|
)
|
$
|
(7
|
)
|
$
|
135
|
|
$
|
(53
|
)
|
$
|
—
|
|
$
|
(1,345
|
)
|
1.
|
The cumulative translation adjustment gain for the
six months ended June 30, 2017
is primarily driven by the weakening of the U.S. dollar ("USD") against the European Euro ("EUR"). The currency translation loss for the
six months ended June 30, 2018
was primarily driven by the strengthening of the USD against the EUR and the Brazilian Real ("BRL").
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
||||||||
Derivative instruments
|
$
|
5
|
|
$
|
5
|
|
$
|
1
|
|
$
|
6
|
|
Pension benefit plans - net
|
—
|
|
(54
|
)
|
(2
|
)
|
(114
|
)
|
||||
Other benefit plans - net
|
—
|
|
(2
|
)
|
—
|
|
(4
|
)
|
||||
Provision for income taxes related to other comprehensive income (loss) items
|
$
|
5
|
|
$
|
(51
|
)
|
$
|
(1
|
)
|
$
|
(112
|
)
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
Income Classification
|
||||||||
(In millions)
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
|||||||||
Derivative Instruments:
|
$
|
(6
|
)
|
$
|
(13
|
)
|
$
|
(7
|
)
|
$
|
(21
|
)
|
(1)
|
Tax expense
|
2
|
|
5
|
|
2
|
|
8
|
|
(2)
|
||||
After-tax
|
$
|
(4
|
)
|
$
|
(8
|
)
|
$
|
(5
|
)
|
$
|
(13
|
)
|
|
Amortization of pension benefit plans:
|
|
|
|
|
|
|
|
||||||
Prior service benefit
|
—
|
|
(1
|
)
|
—
|
|
(2
|
)
|
(3)
|
||||
Actuarial (gain) loss
|
(1
|
)
|
189
|
|
(1
|
)
|
379
|
|
(3)
|
||||
Settlement gain
|
(1
|
)
|
—
|
|
(1
|
)
|
—
|
|
(3)
|
||||
Total before tax
|
$
|
(2
|
)
|
$
|
188
|
|
$
|
(2
|
)
|
$
|
377
|
|
|
Tax benefit
|
—
|
|
(68
|
)
|
—
|
|
(133
|
)
|
(2)
|
||||
After-tax
|
$
|
(2
|
)
|
$
|
120
|
|
$
|
(2
|
)
|
$
|
244
|
|
|
Amortization of other benefit plans:
|
|
|
|
|
|
|
|
||||||
Prior service benefit
|
—
|
|
(18
|
)
|
—
|
|
(35
|
)
|
(3)
|
||||
Actuarial losses
|
—
|
|
23
|
|
—
|
|
46
|
|
(3)
|
||||
Total before tax
|
$
|
—
|
|
$
|
5
|
|
$
|
—
|
|
$
|
11
|
|
|
Tax benefit
|
—
|
|
(2
|
)
|
—
|
|
(4
|
)
|
(2)
|
||||
After-tax
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
$
|
7
|
|
|
Net realized losses on investments, before tax:
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(4)
|
||||
Tax expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(2)
|
||||
After-tax
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
|
Total reclassifications for the period, after-tax
|
$
|
(6
|
)
|
$
|
115
|
|
$
|
(7
|
)
|
$
|
237
|
|
|
1.
|
Cost of goods sold.
|
2.
|
Provision for income taxes from continuing operations.
|
3.
|
These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit (credit) cost of the company's pension and other benefit plans. See Note
16
for additional information.
|
4.
|
Sundry income (expense) - net.
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Defined Benefit Pension Plans:
|
|
|
|
|
||||||||
Service cost
|
$
|
33
|
|
$
|
34
|
|
$
|
67
|
|
$
|
67
|
|
Interest cost
|
189
|
|
197
|
|
379
|
|
392
|
|
||||
Expected return on plan assets
|
(301
|
)
|
(309
|
)
|
(604
|
)
|
(617
|
)
|
||||
Amortization of unrecognized (gain) loss
|
(1
|
)
|
189
|
|
(1
|
)
|
379
|
|
||||
Amortization of prior service benefit
|
—
|
|
(1
|
)
|
—
|
|
(2
|
)
|
||||
Curtailment/settlement gain
1
|
(4
|
)
|
—
|
|
(4
|
)
|
—
|
|
||||
Net periodic benefit (credit) cost - Total
|
$
|
(84
|
)
|
$
|
110
|
|
$
|
(163
|
)
|
$
|
219
|
|
Less: Discontinued operations
|
—
|
|
1
|
|
—
|
|
2
|
|
||||
Net periodic benefit (credit) cost - Continuing operations
|
$
|
(84
|
)
|
$
|
109
|
|
$
|
(163
|
)
|
$
|
217
|
|
Other Post Employment Benefits:
|
|
|
|
|
||||||||
Service cost
|
$
|
2
|
|
$
|
2
|
|
$
|
4
|
|
$
|
4
|
|
Interest cost
|
22
|
|
23
|
|
43
|
|
45
|
|
||||
Amortization of unrecognized loss
|
—
|
|
23
|
|
—
|
|
46
|
|
||||
Amortization of prior service benefit
|
—
|
|
(18
|
)
|
—
|
|
(35
|
)
|
||||
Net periodic benefit cost - Continuing operations
|
$
|
24
|
|
$
|
30
|
|
$
|
47
|
|
$
|
60
|
|
1.
|
The 2018 impact relates to the curtailment and settlement of pension plans in the U.S. and Australia.
|
Notional Amounts
|
Successor
|
|||||
(In millions)
|
June 30, 2018
|
December 31, 2017
|
||||
Derivatives designated as hedging instruments:
|
|
|
||||
Commodity contracts
|
$
|
145
|
|
$
|
587
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||
Foreign currency contracts
|
3,866
|
|
3,922
|
|
||
Commodity contracts
|
8
|
|
6
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Beginning balance
|
$
|
9
|
|
$
|
4
|
|
$
|
(2
|
)
|
$
|
7
|
|
Additions and revaluations of derivatives designated as cash flow hedges
|
(12
|
)
|
—
|
|
—
|
|
2
|
|
||||
Clearance of hedge results to earnings
|
(4
|
)
|
(8
|
)
|
(5
|
)
|
(13
|
)
|
||||
Ending balance
|
$
|
(7
|
)
|
$
|
(4
|
)
|
$
|
(7
|
)
|
$
|
(4
|
)
|
|
|
Successor
|
||||||||
|
|
June 30, 2018
|
||||||||
(In millions)
|
Balance Sheet Location
|
Gross
|
Counterparty and Cash Collateral Netting
1
|
Net Amounts Included in the Condensed Consolidated Balance Sheet
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||
Foreign currency contracts
|
Other current assets
|
$
|
153
|
|
$
|
(35
|
)
|
$
|
118
|
|
Commodity contracts
|
Other current assets
|
4
|
|
—
|
|
4
|
|
|||
Total asset derivatives
|
|
$
|
157
|
|
$
|
(35
|
)
|
$
|
122
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
35
|
|
$
|
9
|
|
$
|
44
|
|
Total liability derivatives
|
|
$
|
35
|
|
$
|
9
|
|
$
|
44
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
|
|
Successor
|
||||||||
|
|
December 31, 2017
|
||||||||
(In millions)
|
Balance Sheet Location
|
Gross
|
Counterparty and Cash Collateral Netting
1
|
Net Amounts Included in the Condensed Consolidated Balance Sheet
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||
Foreign currency contracts
|
Other current assets
|
$
|
46
|
|
$
|
(37
|
)
|
$
|
9
|
|
Total asset derivatives
|
|
$
|
46
|
|
$
|
(37
|
)
|
$
|
9
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
79
|
|
$
|
(32
|
)
|
$
|
47
|
|
Total liability derivatives
|
|
$
|
79
|
|
$
|
(32
|
)
|
$
|
47
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
|
Amount of (Loss) Gain Recognized in OCI
1
- Pre-Tax
|
|||||||||||
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
(15
|
)
|
$
|
—
|
|
$
|
1
|
|
$
|
4
|
|
Total derivatives designated as hedging instruments
|
(15
|
)
|
—
|
|
1
|
|
4
|
|
||||
Total derivatives
|
$
|
(15
|
)
|
$
|
—
|
|
$
|
1
|
|
$
|
4
|
|
1.
|
OCI is defined as other comprehensive income (loss).
|
|
Amount of Gain (Loss) Recognized in Income - Pre-Tax
1
|
|||||||||||
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
(In millions)
|
Three Months Ended June 30, 2018
|
Three Months Ended June 30, 2017
|
Six Months Ended June 30, 2018
|
Six Months Ended June 30, 2017
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
||||||||
Commodity contracts
2
|
$
|
6
|
|
$
|
13
|
|
$
|
7
|
|
$
|
21
|
|
Total derivatives designated as hedging instruments
|
6
|
|
13
|
|
7
|
|
21
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||||
Foreign currency contracts
3
|
177
|
|
(86
|
)
|
(4
|
)
|
(171
|
)
|
||||
Foreign currency contracts
4
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
||||
Commodity contracts
2
|
8
|
|
—
|
|
5
|
|
4
|
|
||||
Total derivatives not designated as hedging instruments
|
185
|
|
(87
|
)
|
1
|
|
(168
|
)
|
||||
Total derivatives
|
$
|
191
|
|
$
|
(74
|
)
|
$
|
8
|
|
$
|
(147
|
)
|
1.
|
For cash flow hedges, this represents the portion of the gain (loss) reclassified from accumulated OCI into income during the period.
|
2.
|
Recorded in cost of goods sold.
|
3.
|
Gain recognized in sundry income (expense) - net was partially offset by the related gain on the foreign currency-denominated monetary assets and liabilities of the company's operations. See Note
8
for additional information.
|
4.
|
Recorded in net sales.
|
June 30, 2018
|
Significant Other Observable Inputs (Level 2)
|
||
(In millions)
|
|||
Assets at fair value:
|
|
||
Cash equivalents and restricted cash equivalents
1
|
$
|
3,020
|
|
Marketable securities
|
374
|
|
|
Derivatives relating to:
2
|
|
||
Commodities
|
4
|
|
|
Foreign currency
|
153
|
|
|
Total assets at fair value
|
$
|
3,551
|
|
Liabilities at fair value:
|
|
||
Long-term debt
|
$
|
11,186
|
|
Derivatives relating to:
2
|
|
||
Foreign currency
|
35
|
|
|
Total liabilities at fair value
|
$
|
11,221
|
|
1.
|
Time deposits included in cash and cash equivalents and money market funds included in other current assets in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value.
|
2.
|
See Note
17
for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.
|
December 31, 2017
|
Significant Other Observable Inputs (Level 2)
|
||
(In millions)
|
|||
Assets at fair value:
|
|
||
Cash equivalents and restricted cash equivalents
1
|
$
|
5,205
|
|
Marketable securities
|
952
|
|
|
Derivatives relating to:
2
|
|
||
Foreign currency
|
46
|
|
|
Total assets at fair value
|
$
|
6,203
|
|
Liabilities at fair value:
|
|
||
Long-term debt
|
$
|
11,560
|
|
Derivatives relating to:
2
|
|
|
|
Foreign currency
|
79
|
|
|
Total liabilities at fair value
|
$
|
11,639
|
|
1.
|
Time deposits included in cash and cash equivalents and money market funds included in other current assets in the interim Condensed Consolidated Balance Sheets are held at amortized cost, which approximates fair value.
|
2.
|
See Note
17
for the classification of derivatives in the interim Condensed Consolidated Balance Sheets.
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
||||||||
In millions, except per share amounts
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
||||||||
Net sales
|
$
|
8,545
|
|
$
|
6,971
|
|
$
|
15,244
|
|
$
|
14,290
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
$
|
5,669
|
|
$
|
3,963
|
|
$
|
10,516
|
|
$
|
8,115
|
|
Percent of net sales
|
66.3
|
%
|
56.8
|
%
|
69.0
|
%
|
56.8
|
%
|
||||
|
|
|
|
|
||||||||
Research and development expenses
|
$
|
396
|
|
$
|
387
|
|
$
|
778
|
|
$
|
755
|
|
Percent of net sales
|
4.6
|
%
|
5.6
|
%
|
5.1
|
%
|
5.3
|
%
|
||||
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
$
|
1,182
|
|
$
|
1,256
|
|
$
|
2,141
|
|
$
|
2,446
|
|
Percent of net sales
|
13.8
|
%
|
18.0
|
%
|
14.0
|
%
|
17.1
|
%
|
||||
|
|
|
|
|
||||||||
Effective tax rate on continuing operations
|
21.5
|
%
|
10.4
|
%
|
36.1
|
%
|
12.9
|
%
|
||||
|
|
|
|
|
||||||||
Net income
|
$
|
514
|
|
$
|
869
|
|
$
|
293
|
|
$
|
1,990
|
|
|
|
|
|
|
||||||||
Net income available for common stockholders
|
|
$
|
859
|
|
|
$
|
1,970
|
|
||||
|
|
|
|
|
||||||||
Basic earnings per share of common stock from continuing operations
|
|
$
|
0.82
|
|
|
$
|
2.17
|
|
||||
Diluted earnings per share of common stock from continuing operations
|
|
$
|
0.82
|
|
|
$
|
2.16
|
|
|
Successor
|
Predecessor
|
||||||
|
Three Months Ended
June 30, 2018 |
Three Months Ended
June 30, 2017 |
||||||
|
Net Sales
($ Billions)
|
%
|
Net Sales
($ Billions) |
%
|
||||
Worldwide
|
$
|
8.5
|
|
100
|
$
|
7.0
|
|
100
|
U.S. & Canada
|
4.8
|
|
56
|
3.7
|
|
53
|
||
Europe, Middle East & Africa (EMEA)
|
1.5
|
|
18
|
1.3
|
|
18
|
||
Asia Pacific
|
1.7
|
|
20
|
1.5
|
|
22
|
||
Latin America
|
0.5
|
|
6
|
0.5
|
|
7
|
|
Successor
|
Predecessor
|
||||||
|
Six Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2017 |
||||||
|
Net Sales
($ Billions)
|
%
|
Net Sales
($ Billions) |
%
|
||||
Worldwide
|
$
|
15.2
|
|
100
|
$
|
14.3
|
|
100
|
U.S. & Canada
|
7.3
|
|
48
|
7.2
|
|
51
|
||
Europe, Middle East & Africa (EMEA)
|
3.7
|
|
25
|
3.2
|
|
22
|
||
Asia Pacific
|
3.2
|
|
21
|
2.9
|
|
20
|
||
Latin America
|
1.0
|
|
6
|
1.0
|
|
7
|
|
Successor
|
|||||
(Dollars in millions)
|
June 30, 2018
|
December 31, 2017
|
||||
Cash, cash equivalents and marketable securities
|
$
|
4,795
|
|
$
|
8,202
|
|
Total debt
|
13,429
|
|
13,070
|
|
Reporting Unit
|
Goodwill
|
Indefinite-Lived Intangible Assets
|
||||
Agriculture
|
$
|
13,267
|
|
$
|
8,749
|
|
Electronics and Communications
|
4,037
|
|
495
|
|
||
Protection Solutions
|
5,473
|
|
260
|
|
||
Nutrition and Health
|
8,833
|
|
1,437
|
|
||
Transportation and Advanced Polymers
|
6,360
|
|
310
|
|
||
Packaging and Specialty Plastics
|
3,597
|
|
—
|
|
||
Industrial Biosciences
|
3,394
|
|
403
|
|
||
Clean Tech
|
549
|
|
—
|
|
||
Total
|
$
|
45,510
|
|
$
|
11,654
|
|
|
|
Payments Due In
|
|||||||||||||
(Dollars in millions)
|
Total at June 30, 2018
|
Remainder of 2018
|
2019-2020
|
2021-2022
|
2023 and beyond
|
||||||||||
Purchase obligations
|
|
|
|
|
|
||||||||||
Raw material obligations
|
$
|
1,999
|
|
$
|
544
|
|
$
|
759
|
|
$
|
677
|
|
$
|
19
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 1.
|
LEGAL PROCEEDINGS
|
Summary of Changes to the Consolidated Income Statement (Unaudited)
|
For the Period September 1 through December 31, 2017 (Successor)
|
||||||||
(in millions)
|
As reported
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
6,165
|
|
$
|
75
|
|
$
|
6,240
|
|
Research and development expense
|
$
|
473
|
|
$
|
19
|
|
$
|
492
|
|
Selling, general and administrative expenses
|
$
|
1,101
|
|
$
|
40
|
|
$
|
1,141
|
|
Sundry income - net
|
$
|
90
|
|
$
|
134
|
|
$
|
224
|
|
Summary of Changes to the Consolidated Income Statement (Unaudited)
|
For the Period January 1 through August 31, 2017 (Predecessor)
|
||||||||
(in millions)
|
As reported
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
10,205
|
|
$
|
(153
|
)
|
$
|
10,052
|
|
Research and development expense
|
$
|
1,064
|
|
$
|
(42
|
)
|
$
|
1,022
|
|
Selling, general and administrative expenses
|
$
|
3,306
|
|
$
|
(84
|
)
|
$
|
3,222
|
|
Sundry income (expense) - net
|
$
|
166
|
|
$
|
(279
|
)
|
$
|
(113
|
)
|
Summary of Changes to the Consolidated Income Statement (Unaudited)
|
For the Year Ended December 31, 2016 (Predecessor)
|
||||||||
(in millions)
|
As reported
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
13,955
|
|
$
|
(18
|
)
|
$
|
13,937
|
|
Research and development expense
|
$
|
1,502
|
|
$
|
(6
|
)
|
$
|
1,496
|
|
Selling, general and administrative expenses
|
$
|
4,143
|
|
$
|
(16
|
)
|
$
|
4,127
|
|
Sundry income (expense) - net
|
$
|
707
|
|
$
|
(40
|
)
|
$
|
667
|
|
Summary of Changes to the Consolidated Income Statement (Unaudited)
|
For the Year Ended December 31, 2015 (Predecessor)
|
||||||||
(in millions)
|
As reported
|
Effect of Change
|
Updated
|
||||||
Cost of goods sold
|
$
|
14,591
|
|
$
|
(168
|
)
|
$
|
14,423
|
|
Research and development expense
|
$
|
1,735
|
|
$
|
(56
|
)
|
$
|
1,679
|
|
Selling, general and administrative expenses
|
$
|
4,428
|
|
$
|
(150
|
)
|
$
|
4,278
|
|
Sundry income (expense) - net
|
$
|
690
|
|
$
|
(374
|
)
|
$
|
316
|
|
Item 6.
|
EXHIBITS
|
|
E. I. DU PONT DE NEMOURS AND COMPANY
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
August 3, 2018
|
|
|
|
|
|
|
|
By:
|
/s/ Nicholas C. Fanandakis
|
|
|
|
|
|
Nicholas C. Fanandakis
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
(As Duly Authorized Officer and
|
|
|
Principal Financial and Accounting Officer)
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Company’s Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the company’s Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017).
|
|
|
|
|
|
Company’s Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the company's Current Report on Form 8-K (Commission file number 1-815) for the period ended September 1, 2017).
|
|
|
|
|
4
|
|
The Company agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of the company and its subsidiaries.
|
|
|
|
|
Separation Agreement by and between the Company and The Chemours Company (incorporated by reference to Exhibit 2.1 to the company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).
|
|
|
|
|
|
Amendment No. 1 to Separation Agreement by and between the Company and The Chemours Company, dated August 24, 2017 (incorporated by reference to Exhibit 2.1 to the company's Current Report on Form 8-K (Commission file number 1-815) dated August 25, 2017).
|
|
|
|
|
|
Tax Matters Agreement by and between the Company and The Chemours Company (incorporated by reference to Exhibit 2.2 to the company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).
|
|
|
|
|
|
Master Repurchase Agreement by and among Cooperatieve Rabobank, U.A. (New York Branch), The Bank of Tokyo Mitsubishi UFJ Ltd. (New York Branch) and PHI Financial Services, Inc., dated as of February 13, 2018 (incorporated by reference to Exhibit 10.4 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the period ended December 31, 2017).
|
|
|
|
|
|
Master Framework Agreement by and among Cooperatieve Rabobank, U.A. (New York Branch), The Bank of Tokyo Mitsubishi UFJ Ltd. (New York Branch) and PHI Financial Services, Inc. dated as of February 13, 2018 (incorporated by reference to Exhibit 10.5 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the period ended December 31, 2017).
|
|
|
|
|
|
Transaction Agreement, dated as of March 31, 2017, by and between the Company and FMC Corporation (incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended March 31, 2017).
|
|
|
|
|
|
Purchase Price Allocation Side Letter Agreement, dated as of May 12, 2017, by and between the Company and FMC Corporation (incorporated by reference to Exhibit 10.26 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2017).
|
|
|
|
|
|
Employment Agreement by and between the Company and Edward D. Breen, dated as of August 31, 2017, (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (Commission file number 1-815) dated September 1, 2017).
|
|
|
|
|
|
The E. I. du Pont de Nemours and Company Equity Incentive Plan, incorporated by reference to Exhibit 4.1 to DowDuPont Inc. Registration Statement on Form S-8 filed September 1, 2017.
|
|
|
|
|
|
The E. I. du Pont de Nemours and Company Stock Performance Plan, incorporated by reference to Exhibit 4.2 to DowDuPont Inc. Registration Statement on Form S-8 filed September 1, 2017.
|
|
|
|
|
|
The E. I. du Pont de Nemours and Company Management Deferred Compensation Plan, incorporated by reference to Exhibit 4.3 to DowDuPont Inc. Registration Statement on Form S-8 filed September 1, 2017.
|
|
|
|
|
|
The E. I. du Pont de Nemours and Company Stock Accumulation and Deferred Compensation Plan for Directors, incorporated by reference to Exhibit 4.4 to DowDuPont Inc. Registration Statement on Form S-8 filed September 1, 2017.
|
|
|
|
|
|
DuPont’s Pension Restoration Plan, as last amended effective June 29, 2015 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2015).
|
|
|
|
|
|
DuPont’s Supplemental Retirement Income Plan, as last amended effective December 18, 1996 (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2011).
|
|
|
|
|
|
DuPont’s Rules for Lump Sum Payments, as last amended effective May 15, 2014 (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2015).
|
|
|
|
|
|
DuPont’s Retirement Savings Restoration Plan, as last amended effective May 15, 2014. (incorporated by reference to Exhibit 10.08 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2014).
|
|
|
|
|
|
DuPont’s Retirement Income Plan for Directors, as last amended January 2011 (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended March 31, 2012).
|
|
|
|
|
|
DuPont's Senior Executive Severance Plan, as amended and restated effective December 10, 2015 (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2015).
|
|
|
|
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the company’s Principal Executive Officer.
|
|
|
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the company’s Principal Financial Officer.
|
|
|
|
|
|
Section 1350 Certification of the company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
|
|
Section 1350 Certification of the company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Management contract or compensatory plan or arrangement.
|
**
|
DuPont hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit, and amendments or modifications thereto, to such agreement to the U.S. Securities and Exchange Commission upon request.
|
1 Year DuPont de Nemours Chart |
1 Month DuPont de Nemours Chart |
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