Announces Approval of $5.0 Billion Share Repurchase
Authorization
Third Quarter 2022 Highlights
- 3Q Net Sales of $3.3 billion
increased 4%; organic sales increased 11% versus year-ago
period
- 3Q GAAP Income from continuing operations of $359 million; operating EBITDA of $856 million increased 5% versus year-ago
period
- Operating EBITDA margin increased 30 basis points
year-over-year
- 3Q GAAP EPS from continuing operations of $0.69; adjusted EPS of $0.82 increased 4% versus year-ago period; higher
tax rate was a $0.05 headwind versus
previously issued guidance
- ~$415 million of capital returned
to shareholders through share repurchases and dividends
Transaction and Capital Allocation Updates
- M&M Divestiture to Celanese closed on November 1 with gross cash received of
$11.0 billion
- Rogers Corporation transaction terminated on November 1 due to lack of receipt of regulatory
clearance
- Announces Board approval of new $5.0
billion share repurchase program with intended $3.25 billion accelerated share repurchase
program to be executed imminently
- Announces intent to retire $2.5
billion of Senior Notes due in November 2023 as part of balanced capital
allocation framework
WILMINGTON, Del., Nov. 8, 2022
/PRNewswire/ -- DuPont (NYSE: DD) today announced financial
results(1) for the third quarter of 2022.
"Despite a continued challenging macro environment marked by
substantial cost inflation, we delivered better than expected
top-line and bottom-line financial performance through disciplined
operational execution including necessary targeted pricing
actions," said Ed Breen, DuPont
Executive Chairman and Chief Executive Officer. "Underlying demand
during the quarter remained strong in most of our key end-markets
notably semiconductor, water and general industrial. Looking ahead,
we remain focused on solid execution and operating discipline to
maintain strong financial performance in a global environment
facing continued uncertainties."
"Last week's closing of the M&M divestiture to Celanese was
a milestone event for DuPont, advancing our strategy to concentrate
the Company's portfolio in more stable, higher-growth and
higher-margin businesses," Breen continued. "With the M&M sale
now complete, we are returning substantial excess capital to
shareholders while also further strengthening our balance sheet to
maintain financial flexibility. Our announcement today of a new
$5.0 billion share repurchase program
and our intent to retire $2.5 billion
in long-term debt highlight our commitment to a balanced capital
allocation approach focused on shareholder value creation."
Third Quarter 2022
Results(1)
|
|
Dollars in millions,
unless noted
|
3Q'22
|
3Q'21
|
Change
vs.
3Q'21
|
Organic Sales
(2)
vs.
3Q'21
|
Net sales
|
$3,317
|
$3,199
|
4 %
|
11 %
|
GAAP Income from
continuing operations
|
$359
|
$259
|
39 %
|
|
Operating
EBITDA(2)
|
$856
|
$817
|
5 %
|
|
Operating
EBITDA(2) margin %
|
25.8 %
|
25.5 %
|
30 bps
|
|
GAAP EPS from
continuing operations
|
$0.69
|
$0.48
|
44 %
|
|
Adjusted
EPS(2)
|
$0.82
|
$0.79
|
4 %
|
|
Net sales
- Net sales increased 4% on organic sales(2) growth of
11%; currency and portfolio resulted in headwinds of 4% and 3%,
respectively.
- Organic sales(2) growth of 11% consisted of an 8%
increase in price and a 3% increase in volume.
-
- Price increase reflects actions taken to offset continued
broad-based cost inflation.
- Volume increase reflects continued strong demand in
semiconductor, water and industrial end-markets, muted primarily by
lower volumes from protective garments within Safety Solutions and
softness in smartphones and personal computing globally within
Interconnect Solutions.
- 15% organic sales(2) growth in Water &
Protection; 7% organic sales(2) growth in Electronics
& Industrial; 25% organic sales(2) growth in
retained businesses reported in Corporate & Other, which
predominantly consists of the auto adhesives portfolio.
- Organic sales(2) growth in all regions globally,
including 19% in U.S. & Canada, 7% in Asia
Pacific and 6% in EMEA.
GAAP Income/GAAP EPS from continuing operations
- GAAP income/GAAP EPS from continuing operations increased due
primarily to a one-time credit related to the CARES Act which is
reflected as a significant item, higher segment earnings and lower
integration costs partially offset by a higher tax rate.
Operating EBITDA(2)
- Operating EBITDA(2) increased on volume gains as
pricing actions were offset by higher input costs resulting from
inflation.
Adjusted EPS(2)
- Adjusted EPS increased due to higher segment earnings and a
lower share count partially offset by a higher tax rate.
Operating cash flow
- Operating cash flow in the quarter of $419 million, capital expenditures of
$172 million and an adjustment of
$115 million for a tax prepayment
related to the M&M Divestiture resulted in free cash
flow(2) of $362 million.
Free cash flow conversion(2) during the quarter was
73%.
Third Quarter 2022
Segment Highlights
|
|
Electronics &
Industrial
|
|
Dollars in millions,
unless noted
|
3Q'22
|
3Q'21
|
Change
vs.
3Q'21
|
Organic
Sales(2)
vs.
3Q'21
|
Net sales
|
$1,511
|
$1,467
|
3 %
|
7 %
|
Operating
EBITDA
|
$473
|
$475
|
- %
|
|
Operating EBITDA margin
%
|
31.3 %
|
32.4 %
|
(110) bps
|
|
Net sales
- Net sales increased 3% as organic sales(2) growth of
7% was partially offset by a 4% currency headwind.
- Organic sales(2) growth of 7% driven by a 4%
increase in volume and a 3% increase in price.
-
- Semiconductor Technologies sales up mid-teens on an
organic(2) basis as strong demand continued, led by the
on-going transition to more advanced node technologies and strong
fab utilization, along with growth in 5G communications and data
centers.
- Industrial Solutions sales up high single-digits on an
organic(2) basis, reflecting ongoing demand strength for
Kalrez® and Vespel® products, OLED materials and for applications
in healthcare markets such as biopharma tubing.
- Interconnect Solutions sales down mid single-digits on
an organic(2) basis due to volume declines. Softness in
smartphones and personal computing globally more than offset strong
demand for Kapton® film in industrial end-markets and
for applications requiring electromagnetic shielding and thermal
management.
Operating EBITDA
- Operating EBITDA was relatively flat as volume gains in
Semiconductor Technologies and Industrial Solutions were offset by
lower volumes and weaker product mix in Interconnect Solutions, as
well as lower equity earnings.
Water &
Protection
|
|
Dollars in millions,
unless noted
|
3Q'22
|
3Q'21
|
Change
vs.
3Q'21
|
Organic
Sales(2)
vs.
3Q'21
|
Net sales
|
$1,534
|
$1,397
|
10 %
|
15 %
|
Operating
EBITDA
|
382
|
353
|
8 %
|
|
Operating EBITDA margin
%
|
24.9 %
|
25.3 %
|
(40) bps
|
|
Net sales
- Net sales increased 10% as organic sales(2) growth
of 15% was partially offset by a 5% currency headwind.
- Organic sales(2) growth of 15% reflects a 13%
increase in price and a 2% increase in volume. The increase in
price reflects broad-based actions taken across the segment to
offset continued cost inflation.
-
- Shelter Solutions sales up high-teens on an
organic(2) basis driven by pricing gains, coupled with
continued demand strength in North
America commercial construction.
- Water Solutions sales up mid-teens on an
organic(2) basis on strong global demand across all
water technologies, as well as pricing gains.
- Safety Solutions sales up low double-digits on an
organic(2) basis as pricing actions were slightly offset
by lower volumes driven by Tyvek® garments.
Operating EBITDA
- Increase in operating EBITDA driven by pricing actions and
volume gains which more than offset higher product costs driven by
inflationary pressure, weaker product mix and currency
headwinds.
Outlook
|
|
Dollars in millions,
unless noted
|
|
Full Year
2022E
|
Net sales
|
|
~$13,000
|
Operating
EBITDA(2)
|
|
~$3,250
|
Adjusted
EPS(2)
|
|
~$3.30
|
"As demonstrated by our third quarter results, demand across
most of our key end-markets remained strong in the period and our
teams continued to successfully execute in a challenging macro
environment marked by inflation and foreign currency headwinds,"
said Lori Koch, Chief Financial
Officer of DuPont. "For the fourth quarter, we expect demand to
remain strong in most end-markets, notably water, industrial and
auto adhesives, but do anticipate continued softness in consumer
electronics globally and some expected slowing in customer
semiconductor fab production rates. Further, we plan to reduce our
production rates to realign working capital in anticipation of a
more normal supply chain environment. Lastly, we expect incremental
currency headwinds to further impact both top and bottom-line
results."
"As we look to close out the year, our expectation for full year
organic sales growth of high-single digits remains unchanged," Koch
continued. "Our updated full year adjusted EPS guidance is
inclusive of a $0.09 headwind
resulting from an increase in the anticipated tax rate for the full
year 2022, offset by an assumed lower share count resulting from
planned share repurchases and net interest benefits expected to be
realized related to cash proceeds received from the M&M
transaction."
Capital Allocation Update
On November 7, 2022, DuPont's
Board of Directors approved a new share repurchase program
authorizing the repurchase and retirement of up to $5 billion of common stock. This new repurchase
authorization is in addition to the $250
million remaining under the Company's existing share
repurchase program which was approved in February 2022. The Company intends to enter
accelerated share repurchase agreements ("ASR Agreements")
imminently, for the repurchase of an aggregate of approximately
$3.25 billion of common stock with
$250 million of such repurchases
under the existing program and the remaining $3 billion under the new program. Any additional
repurchases under the new share repurchase program will be made
from time to time on the open market at prevailing market prices or
in privately negotiated transactions off the market, which may
include additional accelerated share repurchase agreements. The
timing and number of shares to be repurchased will depend on
factors such as the share price, economic and market conditions,
and corporate and regulatory requirements. The new repurchase
program terminates on June 30, 2024,
unless extended or shortened by the Board of Directors.
Reflecting DuPont's commitment to a balanced capital allocation
framework, the Company announced its intent to retire $2.5 billion of Senior Notes due in November 2023 during the fourth quarter of 2022.
This will enable approximately $100
million of annual interest savings. Additionally in the
fourth quarter, the Company plans to reduce its commercial paper
balance to zero. As of September 30,
2022, the Company had $1.3
billion of commercial paper outstanding.
The new share repurchase program and the intended de-levering
actions demonstrate the Company's continued commitment to return
value to shareholders and in maintaining a strong balance sheet
within the framework of its balanced capital allocation policy. In
addition, the Company's M&A focus remains on bolt-on targets
that fit within its key growth pillars and are aligned with secular
trends.
Conference Call
The Company will host a live webcast of its third quarter
earnings conference call with investors to discuss its results and
business outlook beginning today at 8:00
a.m. ET. The slide presentation that accompanies the
conference call will be posted on the DuPont's Investor Relations
Events and Presentations page. A replay of the webcast also will be
available on the DuPont's Investor Relations Events and
Presentations page following the live event.
About DuPont
DuPont (NYSE: DD) is a global innovation leader with
technology-based materials and solutions that help transform
industries and everyday life. Our employees apply diverse science
and expertise to help customers advance their best ideas and
deliver essential innovations in key markets including electronics,
transportation, construction, water, healthcare and worker safety.
More information about the company, its businesses and solutions
can be found at www.dupont.com. Investors can access information
included on the Investor Relations section of the website at
investors.dupont.com.
DuPont™ and all products, unless otherwise noted, denoted
with TM, SM or ® are trademarks,
service marks or registered trademarks of affiliates of DuPont de
Nemours, Inc.
Overview
On February 17, 2022, DuPont
announced that it has entered into definitive agreements to divest
a majority of its historic Mobility & Materials segment,
excluding certain Advanced Solutions and Performance Resins
businesses, to Celanese Corporation ("Celanese"), (the "M&M
Divestiture"). On November 1, 2022,
DuPont completed the previously announced M&M Divestiture. The
Company also announced on February
18, 2022, that its Board of Directors has approved the
divestiture of the Delrin® acetal homopolymer (H-POM)
business. In addition to the entry into definitive agreements, the
Company anticipates that the closing of the sale of
Delrin® would be subject to regulatory approvals and
other customary closing conditions, (the "Delrin® Divestiture" and
together with the M&M Divestiture, the "M&M
Divestitures").
As of March 31, 2022, the results
of operations and the assets and liabilities of the businesses in
scope for the M&M Divestitures are presented as discontinued
operations for all periods presented. The cash flows of these
businesses have not been segregated and are included in the interim
Consolidated Statement of Cash Flows. Unless otherwise indicated,
the discussion of results, including the financial measures further
discussed below, refer only to DuPont's Continuing Operations and
do not include discussion of balances or activity of the businesses
in scope for the M&M Divestitures. The Auto Adhesives &
Fluids, MultibaseTM and Tedlar® product lines
previously within the historic Mobility & Materials segment
(the "Retained Businesses") are not included in the scope of the
M&M Divestitures. The Retained Businesses are reported in
Corporate & Other. The reporting changes have been
retrospectively applied for all periods presented.
Cautionary Statement about Forward-looking
Statements
This communication contains "forward-looking statements" within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan,"
"believe," "seek," "see," "will," "would," "target," and similar
expressions and variations or negatives of these words.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties, and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) the possibility
that the Company may fail to realize the anticipated benefits of
the $5 billion share repurchase
program announced on November 8, 2022
and that the program may be suspended, discontinued or not
completed prior to its termination on June
30, 2024; (ii) ability to achieve anticipated tax treatments
in connection with mergers, acquisitions, divestitures, (including
in connection with the divestiture of the majority of its
historic Mobility & Materials segment to Celanese completed on
November 1, 2022, and DuPont's
pursuit of plans to divest the Delrin® acetal homopolymer
business), and other portfolio changes actions and impact of
changes in relevant tax and other laws; (iii) indemnification of
certain legacy liabilities; (iv) risks and costs related to each of
the parties respective performance under and the impact of the
arrangement to share future eligible PFAS costs by and between
DuPont, Corteva and Chemours; (v) failure to timely close on
anticipated terms (or at all), realize expected benefits and
effectively manage and achieve anticipated synergies and
operational efficiencies in connection with mergers, acquisitions,
divestitures and other portfolio changes; (vi) risks and
uncertainties, including increased costs and the ability to obtain
raw materials and meet customer needs, related to operational and
supply chain impacts or disruptions, which may result from, among
other events, the COVID-19 pandemic and actions in response to it,
and geo-political and weather related events; (vii) ability to
offset increases in cost of inputs, including raw materials, energy
and logistics; (viii) risks, including ability to achieve, and
costs associated with DuPont's sustainability strategy including
the actual conduct of the company's activities and results thereof,
and the development, implementation, achievement or continuation of
any goal, program, policy or initiative discussed or expected; and
(ix) other risks to DuPont's business, operations; each as further
discussed in DuPont's most recent annual report and subsequent
current and periodic reports filed with the U.S. Securities and
Exchange Commission. Unlisted factors may present significant
additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as
compared with those anticipated in the forward-looking statements
could include, among other things, business or supply chain
disruption, operational problems, financial loss, legal liability
to third parties and similar risks, any of which could have a
material adverse effect on DuPont's consolidated financial
condition, results of operations, credit rating or liquidity. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. DuPont assumes no
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
Non-GAAP Financial Measures
This earnings release includes information that does not conform
to accounting principles generally accepted in the United States of America ("U.S. GAAP") and
are considered non-GAAP measures. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company, including allocating resources. DuPont's management
believes these non-GAAP financial measures are useful to investors
because they provide additional information related to the ongoing
performance of DuPont to offer a more meaningful comparison related
to future results of operations. These non-GAAP financial measures
supplement disclosures prepared in accordance with U.S. GAAP, and
should not be viewed as an alternative to U.S. GAAP. Furthermore,
such non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Reconciliations for these
non-GAAP measures to U.S. GAAP are provided in the Selected
Financial Information and Non-GAAP Measures starting on page 12 and
in the Reconciliation to Non-GAAP Measures on the Investors section
of the Company's website. Non-GAAP measures included in this
release are defined below. The Company has not provided
forward-looking U.S. GAAP financial measures or a reconciliation of
forward-looking non-GAAP financial measures to the most comparable
U.S. GAAP financial measures on a forward-looking basis because the
Company is unable to predict with reasonable certainty the ultimate
outcome of certain future events. These events include, among
others, the impact of portfolio changes, including asset sales,
mergers, acquisitions, and divestitures; contingent liabilities
related to litigation, environmental and indemnifications matters;
impairments and discrete tax items. These items are uncertain,
depend on various factors, and could have a material impact on U.S.
GAAP results for the guidance period.
The historic Mobility & Material segment costs that are
classified as discontinued operations include only direct operating
expenses incurred by the M&M Businesses which the Company will
cease to incur upon the close of the M&M Divestitures. Indirect
costs, such as those related to corporate and shared service
functions previously allocated to the M&M Businesses, do not
meet the criteria for discontinued operations and remain reported
within continuing operations. A portion of these indirect costs
include costs related to activities the Company will continue to
undertake post-closing of the M&M Divestiture, and for which it
will be reimbursed ("Future Reimbursable Indirect Costs"). Future
Reimbursable Indirect Costs are reported within continuing
operations but are excluded from operating EBITDA as defined below.
The remaining portion of these indirect costs is not subject to
future reimbursement ("Stranded Costs"). Stranded Costs are
reported within continuing operations in Corporate & Other and
are included within Operating EBITDA.
Adjusted earnings per common share from continuing operations -
diluted ("Adjusted EPS"), is defined as earnings per common share
from continuing operations - diluted, excluding the after-tax
impact of significant items, after-tax impact of amortization
expense of intangibles, the after-tax impact of non-operating
pension / other post employment benefits ("OPEB") credits / costs
and Future Reimbursable Indirect Costs. Management estimates
amortization expense in 2022 associated with intangibles to be
approximately $600 million on a
pre-tax basis, or approximately $0.91
per share.
The Company's measure of profit/loss for segment reporting
purposes is Operating EBITDA as this is the manner in which the
Company's chief operating decision maker ("CODM") assesses
performance and allocates resources. The Company defines Operating
EBITDA as earnings (i.e., "Income from continuing operations before
income taxes") before interest, depreciation, amortization,
non-operating pension / OPEB benefits / charges, and foreign
exchange gains / losses, excluding Future Reimbursable Indirect
Costs, and adjusted for significant items. Reconciliations of these
measures are provided on the following pages.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
Free cash flow is defined as cash provided by/used for operating
activities less capital expenditures and excluding the impact of
cash inflows/outflows that are unusual in nature and/or infrequent
in occurrence. As a result, free cash flow represents cash that is
available to the Company, after investing in its asset base, to
fund obligations using the Company's primary source of liquidity,
cash provided by operating activities. Management believes free
cash flow, even though it may be defined differently from other
companies, is useful to investors, analysts and others to evaluate
the Company's cash flow and financial performance, and it is an
integral measure used in the Company's financial planning process.
Free cash flow conversion is defined as free cash flow divided by
net income adjusted to exclude the after-tax impact of non-cash
impairment charges, gains or losses on divestitures, amortization
expense of intangibles and tax benefit/expense from discontinued
operations.
(1)
|
During the first
quarter of 2022, a substantial portion of the Company's historic
Mobility & Materials segment met the criteria to be classified
as discontinued operations for current and historical periods. See
page 6 for further information, including the basis of presentation
included in this release.
|
(2)
|
Adjusted EPS, operating
EBITDA, organic sales, free cash flow and free cash flow conversion
are non-GAAP measures. See page 7 for further discussion, including
a definition of significant items. Reconciliation to the most
directly comparable GAAP measure, including details of significant
items begins on page 12 of this communication.
|
DuPont de Nemours,
Inc.
|
Consolidated
Statements of Operations
|
|
In millions, except per
share amounts (Unaudited)
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
2022
|
2021
|
2022
|
2021
|
Net sales
|
$
3,317
|
$
3,199
|
$
9,913
|
$
9,320
|
Cost of
sales
|
2,095
|
2,032
|
6,354
|
5,852
|
Research and
development expenses
|
129
|
137
|
413
|
409
|
Selling, general and
administrative expenses
|
356
|
411
|
1,130
|
1,201
|
Amortization of
intangibles
|
146
|
158
|
447
|
410
|
Restructuring and
asset related charges - net
|
—
|
1
|
101
|
8
|
Acquisition,
integration and separation costs
|
7
|
29
|
28
|
58
|
Equity in earnings of
nonconsolidated affiliates
|
16
|
22
|
62
|
65
|
Sundry income
(expense) - net
|
26
|
1
|
123
|
155
|
Interest
expense
|
128
|
115
|
370
|
390
|
Income from continuing
operations before income taxes
|
498
|
339
|
1,255
|
1,212
|
Provision for income
taxes on continuing operations
|
139
|
80
|
299
|
172
|
Income from continuing
operations, net of tax
|
359
|
259
|
956
|
1,040
|
Income from
discontinued operations, net of tax
|
17
|
145
|
723
|
5,249
|
Net income
|
376
|
404
|
1,679
|
6,289
|
Net income
attributable to noncontrolling interests
|
9
|
13
|
37
|
26
|
Net income available
for DuPont common stockholders
|
$
367
|
$
391
|
$
1,642
|
$
6,263
|
|
Per common share
data:
|
|
|
|
|
Earnings per common
share from continuing operations - basic
|
$
0.69
|
$
0.48
|
$
1.81
|
$
1.86
|
Earnings per common
share from discontinued operations - basic
|
0.05
|
0.27
|
1.44
|
9.49
|
Earnings per common
share - basic
|
$
0.73
|
$
0.75
|
$
3.25
|
$
11.35
|
Earnings per common
share from continuing operations - diluted
|
$
0.69
|
$
0.48
|
$
1.80
|
$
1.86
|
Earnings per common
share from discontinued operations - diluted
|
0.05
|
0.27
|
1.44
|
9.46
|
Earnings per common
share - diluted
|
$
0.73
|
$
0.75
|
$
3.24
|
$
11.32
|
|
Weighted-average common
shares outstanding - basic
|
499.4
|
521.5
|
505.6
|
551.7
|
Weighted-average common
shares outstanding - diluted
|
500.4
|
523.1
|
506.9
|
553.1
|
DuPont de Nemours,
Inc.
|
Consolidated Balance
Sheets
|
|
In millions, except
share amounts (Unaudited)
|
September 30,
2022
|
December 31,
2021
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
1,785
|
$
1,972
|
Accounts and notes
receivable - net
|
2,257
|
2,159
|
Inventories
|
2,359
|
2,086
|
Prepaid and other
current assets
|
216
|
177
|
Assets held for
sale
|
—
|
245
|
Assets of discontinued
operations
|
7,733
|
7,664
|
Total current
assets
|
14,350
|
14,303
|
Property, plant and
equipment - net of accumulated depreciation (September 30,
2022 - $4,227; December 31, 2021 - $4,142)
|
5,477
|
5,753
|
Other Assets
|
|
|
Goodwill
|
16,302
|
16,981
|
Other intangible
assets
|
5,550
|
6,222
|
Restricted cash and
cash equivalents
|
103
|
53
|
Investments and
noncurrent receivables
|
779
|
919
|
Deferred income tax
assets
|
122
|
116
|
Deferred charges and
other assets
|
1,416
|
1,360
|
Total other
assets
|
24,272
|
25,651
|
Total Assets
|
$
44,099
|
$
45,707
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term
borrowings
|
$
1,287
|
$
150
|
Accounts
payable
|
2,061
|
2,102
|
Income taxes
payable
|
284
|
201
|
Accrued and other
current liabilities
|
990
|
1,040
|
Liabilities related to
assets held for sale
|
—
|
25
|
Liabilities of
discontinued operations
|
1,392
|
1,413
|
Total current
liabilities
|
6,014
|
4,931
|
Long-Term
Debt
|
10,564
|
10,632
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
464
|
1,459
|
Pension and other
post-employment benefits - noncurrent
|
625
|
762
|
Other noncurrent
obligations
|
929
|
873
|
Total other noncurrent
liabilities
|
2,018
|
3,094
|
Total
Liabilities
|
18,596
|
18,657
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value
each;
issued 2022:
496,738,067 shares; 2021: 511,792,785 shares)
|
5
|
5
|
Additional paid-in
capital
|
49,199
|
49,574
|
Accumulated
deficit
|
(22,692)
|
(23,187)
|
Accumulated other
comprehensive (loss) income
|
(1,603)
|
41
|
Total DuPont
stockholders' equity
|
24,909
|
26,433
|
Noncontrolling
interests
|
594
|
617
|
Total
equity
|
25,503
|
27,050
|
Total Liabilities and
Equity
|
$
44,099
|
$
45,707
|
DuPont de Nemours,
Inc.
|
Consolidated
Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Nine Months Ended
September 30,
|
2022
|
2021
|
Operating
Activities
|
|
|
Net income
|
$
1,679
|
$
6,289
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
906
|
1,094
|
Credit for deferred
income tax and other tax related items
|
(977)
|
(182)
|
Earnings of
nonconsolidated affiliates less than (in excess of) dividends
received
|
10
|
(41)
|
Net periodic benefit
(credit) cost
|
(6)
|
2
|
Periodic benefit plan
contributions
|
(51)
|
(62)
|
Net gain on sales and
split-offs of assets, businesses and investments
|
(73)
|
(5,117)
|
Restructuring and
asset related charges - net
|
101
|
15
|
Inventory step-up
amortization
|
—
|
12
|
Other net
loss
|
39
|
128
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
(342)
|
(399)
|
Inventories
|
(688)
|
(515)
|
Accounts
payable
|
194
|
379
|
Other assets and
liabilities, net
|
(78)
|
57
|
Cash provided by
operating activities
|
714
|
1,660
|
Investing
Activities
|
|
|
Capital
expenditures
|
(558)
|
(707)
|
Proceeds from sales of
property and businesses, net of cash divested
|
364
|
285
|
Acquisitions of
property and businesses, net of cash acquired
|
5
|
(2,323)
|
Purchases of
investments
|
(15)
|
(2,001)
|
Proceeds from sales
and maturities of investments
|
15
|
2,001
|
Other investing
activities, net
|
4
|
18
|
Cash used for
investing activities
|
(185)
|
(2,727)
|
Financing
Activities
|
|
|
Changes in short-term
notes borrowings
|
1,137
|
—
|
Proceeds from credit
facility
|
600
|
—
|
Proceeds from issuance
of long-term debt transferred to IFF at split-off
|
—
|
1,250
|
Repayment of credit
facility
|
(600)
|
—
|
Payments on long-term
debt
|
—
|
(5,000)
|
Purchases of common
stock
|
(1,125)
|
(1,643)
|
Proceeds from issuance
of Company stock
|
83
|
110
|
Employee taxes paid
for share-based payment arrangements
|
(25)
|
(26)
|
Distributions to
noncontrolling interests
|
(35)
|
(34)
|
Dividends paid to
stockholders
|
(500)
|
(476)
|
Cash transferred to
IFF and subsequent adjustments
|
(11)
|
(100)
|
Other financing
activities, net
|
(4)
|
(2)
|
Cash used for
financing activities
|
(480)
|
(5,921)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(191)
|
(49)
|
Decrease in cash,
cash equivalents and restricted cash
|
(142)
|
(7,037)
|
Cash, cash equivalents
and restricted cash from continuing operations, beginning of
period
|
2,037
|
8,733
|
Cash, cash equivalents
and restricted cash from discontinued operations, beginning of
period
|
39
|
42
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
2,076
|
8,775
|
Cash, cash equivalents
and restricted cash from continuing operations, end of
period
|
1,896
|
1,700
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
38
|
38
|
Cash, cash
equivalents and restricted cash at end of period
|
$
1,934
|
$
1,738
|
DuPont de Nemours,
Inc.
|
Net Sales by Segment
and Geographic Region
|
|
Net Sales by Segment
and Geographic Region
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2022
|
Sep 30,
2021
|
Sep 30,
2022
|
Sep 30,
2021
|
Electronics &
Industrial
|
$
1,511
|
$
1,467
|
$
4,574
|
$
4,087
|
Water &
Protection
|
1,534
|
1,397
|
4,460
|
4,137
|
Corporate & Other
1
|
272
|
335
|
879
|
1,096
|
Total
|
$
3,317
|
$
3,199
|
$
9,913
|
$
9,320
|
U.S. &
Canada
|
$
1,149
|
$
1,011
|
$
3,293
|
$
2,875
|
EMEA
2
|
523
|
562
|
1,665
|
1,672
|
Asia Pacific
|
1,524
|
1,529
|
4,622
|
4,490
|
Latin
America
|
121
|
97
|
333
|
283
|
Total
|
$
3,317
|
$
3,199
|
$
9,913
|
$
9,320
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
September 30, 2022
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
Percent change from
prior year
(Unaudited)
|
Electronics &
Industrial
|
3 %
|
4 %
|
7 %
|
(4) %
|
— %
|
3 %
|
Water &
Protection
|
13
|
2
|
15
|
(5)
|
—
|
10
|
Corporate & Other
1
|
10
|
5
|
15
|
(4)
|
(30)
|
(19)
|
Total
|
8 %
|
3 %
|
11 %
|
(4) %
|
(3) %
|
4 %
|
U.S. &
Canada
|
12 %
|
7 %
|
19 %
|
— %
|
(5) %
|
14 %
|
EMEA2
|
9
|
(3)
|
6
|
(10)
|
(4)
|
(8)
|
Asia Pacific
|
5
|
2
|
7
|
(5)
|
(2)
|
—
|
Latin
America
|
12
|
15
|
27
|
—
|
(2)
|
25
|
Total
|
8 %
|
3 %
|
11 %
|
(4) %
|
(3) %
|
4 %
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Nine Months Ended
September 30, 2022
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
Percent change from
prior year
(Unaudited)
|
Electronics &
Industrial
|
2 %
|
6 %
|
8 %
|
(3) %
|
7 %
|
12 %
|
Water &
Protection
|
12
|
(1)
|
11
|
(3)
|
—
|
8
|
Corporate & Other
1
|
10
|
—
|
10
|
(3)
|
(27)
|
(20)
|
Total
|
7 %
|
2 %
|
9 %
|
(3) %
|
— %
|
6 %
|
U.S. &
Canada
|
12 %
|
5 %
|
17 %
|
— %
|
(2) %
|
15 %
|
EMEA2
|
9
|
(1)
|
8
|
(8)
|
(1)
|
(1)
|
Asia Pacific
|
3
|
2
|
5
|
(3)
|
1
|
3
|
Latin
America
|
9
|
8
|
17
|
—
|
1
|
18
|
Total
|
7 %
|
2 %
|
9 %
|
(3) %
|
— %
|
6 %
|
|
|
1.
|
Corporate & Other
includes activities of the Retained Businesses and previously
divested businesses including Biomaterials, Clean Technologies and
Solamet®.
|
2.
|
Europe, Middle East and
Africa.
|
DuPont de Nemours,
Inc.
|
|
|
|
|
|
Selected Financial
Information and Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA by
Segment
|
Three Months Ended
|
Nine Months Ended
|
|
In millions
(Unaudited)
|
Sep 30, 2022
|
Sep 30, 2021
|
Sep 30, 2022
|
Sep 30, 2021
|
|
Electronics &
Industrial
|
$
473
|
$
475
|
$
1,429
|
$
1,335
|
|
Water &
Protection
|
382
|
353
|
1,071
|
1,060
|
|
Corporate & Other
1
|
1
|
(11)
|
3
|
5
|
|
Total
|
$
856
|
$
817
|
$
2,503
|
$
2,400
|
|
1. In addition
to corporate expenses, Corporate & Other includes activities of
the Retained Businesses and previously divested businesses,
including
Biomaterials, Clean Technologies and Solamet®.
|
|
|
|
|
|
|
|
|
Equity in Earnings of Nonconsolidated Affiliates by
Segment
|
Three Months Ended
|
Nine Months Ended
|
|
In millions
(Unaudited)
|
Sep 30, 2022
|
Sep 30, 2021
|
Sep 30, 2022
|
Sep 30, 2021
|
|
Electronics &
Industrial
|
$
7
|
$
13
|
$
26
|
$
32
|
|
Water &
Protection
|
9
|
7
|
31
|
27
|
|
Corporate & Other
1
|
—
|
2
|
5
|
6
|
|
Total equity earnings
included in operating EBITDA (GAAP)
|
$
16
|
$
22
|
$
62
|
$
65
|
|
1. Corporate &
Other includes activities of the Retained Businesses and previously
divested businesses, including Biomaterials, Clean Technologies
and
Solamet®.
|
|
|
|
|
|
|
|
|
Reconciliation of "Income from continuing operations,
net of tax" to
"Operating EBITDA"
|
Three Months Ended
|
Nine Months Ended
|
|
|
In millions
(Unaudited)
|
Sep 30, 2022
|
Sep 30, 2021
|
Sep 30, 2022
|
Sep 30, 2021
|
|
Income from continuing
operations, net of tax (GAAP)
|
$
359
|
$
259
|
$
956
|
$
1,040
|
|
+ Provision for income
taxes on continuing operations
|
139
|
80
|
299
|
172
|
|
Income from continuing
operations before income taxes
|
$
498
|
$
339
|
$
1,255
|
$
1,212
|
|
+ Depreciation and
amortization
|
283
|
300
|
861
|
817
|
|
- Interest
income 1
|
5
|
1
|
8
|
10
|
|
+ Interest
expense
|
127
|
115
|
365
|
390
|
|
- Non-operating
pension/OPEB benefit 1
|
7
|
9
|
20
|
22
|
|
'- Foreign exchange (gains) losses, net
1
|
5
|
(19)
|
9
|
(35)
|
|
+ Future reimbursable
indirect costs
|
14
|
15
|
45
|
46
|
|
- Significant
items
|
49
|
(39)
|
(14)
|
68
|
|
Operating EBITDA
(non-GAAP)
|
$
856
|
$
817
|
$
2,503
|
$
2,400
|
|
1. Included in
"Sundry income (expense) - net."
|
|
Reconciliation of
"Cash provided by operating activities" to
Free Cash Flow
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2022
|
Sep 30,
2021
|
Sep 30,
2022
|
Sep 30,
2021
|
Cash provided by
operating activities (GAAP) 1
|
$
419
|
$
842
|
$
714
|
$
1,660
|
Capital
expenditures
|
(172)
|
(208)
|
(558)
|
(707)
|
Other
2
|
115
|
—
|
115
|
—
|
Free cash flow
(non-GAAP)
|
$
362
|
$
634
|
$
271
|
$
953
|
|
|
1.
|
Refer to the
Consolidated Statement of Cash Flows included in the schedules
above for major GAAP cash flow categories as well as further detail
relating to the changes in "Cash provided by operating activities"
for the nine month periods noted. In addition, includes cash
activity related to the M&M Businesses and in the comparative
period, the former Nutrition & Biosciences business segment
prior to separation.
|
2.
|
Other represents
estimated tax payments associated with the M&M
Divestiture.
|
DuPont de Nemours,
Inc.
|
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 498
|
$ 343
|
$ 0.69
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(7)
|
(5)
|
(0.01)
|
Acquisition,
integration and separation
costs
|
Gain on divestiture
5
|
5
|
3
|
0.01
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 6
|
(1)
|
(1)
|
—
|
Interest
expense
|
Income tax related
item
|
—
|
13
|
0.02
|
Provision for income
taxes on
continuing operation
|
Employee Retention
Credit 7
|
52
|
40
|
0.08
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Total significant
items
|
$
49
|
$
50
|
$ 0.10
|
|
Less: Amortization of
intangibles
|
(146)
|
(113)
|
(0.22)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
7
|
6
|
0.01
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(14)
|
(11)
|
(0.02)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$ 602
|
$ 411
|
$ 0.82
|
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2021
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 339
|
250
|
$ 0.48
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 8
|
(29)
|
(29)
|
(0.05)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 9
|
(1)
|
—
|
—
|
Restructuring and asset
related charges -
net
|
Gain on divestiture
10
|
3
|
3
|
—
|
Sundry income (expense)
- net
|
Inventory step-up
amortization 11
|
(12)
|
(10)
|
(0.02)
|
Cost of
sales
|
Total significant
items
|
$ (39)
|
$ (36)
|
$
(0.07)
|
|
Less: Amortization of
intangibles
|
(158)
|
(124)
|
(0.23)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
9
|
6
|
0.01
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(15)
|
(11)
|
(0.02)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$ 542
|
$ 415
|
$ 0.79
|
|
|
|
1.
|
Income from
continuing operations before income taxes.
|
2.
|
Net income from
continuing operations available for DuPont common stockholders. The
income tax effect on significant items was calculated based upon
the enacted tax laws and statutory income tax rates applicable in
the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings per common
share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to strategic initiatives
including the sale of the Biomaterials business unit, the
acquisition of Laird PM and the Intended Rogers
Acquisition.
|
5.
|
Reflects gain related
to interest on a milestone payment associated with the TCS/HSC
disposal.
|
6.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Intended Rogers
Acquisition.
|
7.
|
Employee Retention
Credit pursuant to the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act as enhanced by the Consolidated
Appropriations Act ("CAA") and American Rescue Plan Act
("ARPA").
|
8.
|
Acquisition,
integration and separation costs related to strategic initiatives,
which primarily includes the sale of the Solamet®, Biomaterials,
and Clean Technologies business units and the acquisition of Laird
PM..
|
9.
|
Includes Board
approved restructuring plans and asset related charges.
|
10.
|
Reflects an
additional gain related to the historical sales of Solamet and
TCS/HSC reflected in Corporate.
|
11.
|
Reflects the
amortization of the inventory step-up related to the Laird
acquisition.
|
DuPont de Nemours,
Inc.
|
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
1,255
|
$ 914
|
$ 1.80
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(28)
|
(22)
|
(0.04)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(7)
|
(5)
|
(0.01)
|
Restructuring and asset
related charges -
net
|
Asset impairment
charges 6
|
(94)
|
(65)
|
(0.13)
|
Restructuring and asset
related charges -
net
|
Gain on divestiture
7
|
68
|
60
|
0.12
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 8
|
(5)
|
(4)
|
(0.01)
|
Interest
expense
|
Income tax related
item
|
—
|
(1)
|
—
|
Provision for income
taxes on
continuing operations
|
Employee Retention
Credit 9
|
52
|
40
|
0.08
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Total significant
items
|
$ (14)
|
$
3
|
$ 0.01
|
|
Less: Amortization of
intangibles
|
(447)
|
(347)
|
(0.69)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
20
|
16
|
0.03
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(45)
|
(35)
|
(0.07)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$
1,741
|
$
1,277
|
$ 2.52
|
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2021
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
1,212
|
$
1,028
|
$ 1.86
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 10
|
(58)
|
(55)
|
(0.10)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(8)
|
(5)
|
(0.01)
|
Restructuring and asset
related charges -
net
|
Gain on divestitures
11
|
146
|
111
|
0.20
|
Sundry income (expense)
- net
|
Inventory step-up
amortization
|
(12)
|
(10)
|
(0.02)
|
Cost of
sales
|
Income tax related
item 12
|
—
|
75
|
0.14
|
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$
68
|
$ 116
|
$ 0.21
|
|
Less: Amortization of
intangibles
|
(410)
|
(321)
|
(0.58)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
22
|
13
|
0.02
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(46)
|
(35)
|
(0.06)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$
1,578
|
$
1,255
|
$ 2.27
|
|
|
|
1.
|
Income from
continuing operations before income taxes.
|
2.
|
Net income from
continuing operations available for DuPont common stockholders. The
income tax effect on significant items was calculated based upon
the enacted tax laws and statutory income tax rates applicable in
the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings per common
share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to primarily related to
costs associated with the divestiture of the Biomaterials business
unit, acquisition of Laird PM and the Intended Rogers
Acquisition.
|
5.
|
Includes Board
approved restructuring plans and asset related charges.
|
6.
|
Reflects a pre-tax
impairment charge related to an equity method
investment.
|
7.
|
Reflects the gains on
sale of the Biomaterials business unit within Corporate &
Other, the sale of land use right within the Water & Protection
segment, and the gain related to interest on a milestone payment
associated with the TCS/HSC Disposal.
|
8.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Intended Rogers
Acquisition.
|
9.
|
Employee Retention
Credit pursuant to the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act as enhanced by the Consolidated
Appropriations Act ("CAA") and American Rescue Plan Act
("ARPA").
|
10.
|
Acquisition,
integration and separation costs primarily associated with the
execution of activities related to strategic initiatives including
the divestiture of the Biomaterials business unit, the
acquisition of Laird PM and the divestitures of the Clean
Technologies and Solamet® business units.
|
11.
|
Reflects the gain
from the sale of the Solamet® business within Corporate & Other
and post-closing adjustments related to previously divested
businesses.
|
12.
|
Includes a net $77
million tax benefit primarily related to the impact of tax reform
in Switzerland.
|
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SOURCE DuPont