Announces New Share Repurchase Authorization
and Quarterly Dividend Increase
Fourth Quarter 2023 Highlights
- Net Sales of $2.9 billion
decreased 7%; organic sales decreased 10% versus year-ago
period
- GAAP Loss from continuing operations of $(300) million, includes ~$800 million non-cash goodwill impairment
charge; operating EBITDA of $715
million
- GAAP EPS from continuing operations of $(0.72); adjusted EPS of $0.87
- Cash provided by operating activities from continuing
operations of $646 million; adjusted
free cash flow of $501 million
Full Year 2023 Highlights
- Net Sales of $12.1 billion
decreased 7%; organic sales decreased 6% versus prior year
- GAAP Income from continuing operations of $533 million; operating EBITDA of $2.9 billion
- GAAP EPS from continuing operations of $1.09; adjusted EPS of $3.48
- Cash provided by operating activities from continuing
operations of $2.2 billion; adjusted
free cash flow of $1.6 billion
Capital Allocation Updates
- Completed the $2 billion
accelerated share repurchase transaction launched in September 2023
- Announces Board approval of new $1
billion share repurchase program authorization with intended
$500 million accelerated share
repurchase transaction to be launched imminently
- Announces Board declared the first quarter 2024 dividend,
representing a 6% increase to quarterly dividend
WILMINGTON, Del., Feb. 6, 2024
/PRNewswire/ -- DuPont (NYSE: DD) announced its financial
results(1) for the fourth quarter and full year ended
December 31, 2023.
"In the face of inventory destocking that impacted many of our
end-markets in 2023 and continued economic softness in China, our teams remained focused on sound
operational execution and driving productivity and cost
discipline," said Ed Breen, DuPont
Executive Chairman and Chief Executive Officer. "We delivered
significant year-over-year cash flow improvement in 2023, including
a strong fourth quarter finish, which underscores our ongoing
prioritization of working capital management."
"We continue to see demand stabilization within Semiconductor
Technologies and Interconnect Solutions and we remain confident of
a broad-based electronics materials recovery in 2024. We did,
however, see incremental channel inventory destocking within our
industrial-based businesses as we closed out 2023 and we are seeing
similar trends continue as we enter 2024 with recovery timing
expected to vary by end-market as the year progresses," Breen
added. "We remain confident in the through-cycle strength of our
portfolio as our businesses are well-equipped to leverage
market-leading positions and accelerate growth as inventories
normalize and key end-markets recover."
"We also continue to execute on our capital allocation
strategy," Breen continued. "Today we announced completion of the
$2 billion accelerated share
repurchase transaction launched last September, which completes our
previous $5 billion share repurchase
program announced in November 2022.
We also announced authorization of a new $1
billion share repurchase program and a 6% increase to our
quarterly dividend. These actions demonstrate our ongoing
commitment to a balanced capital allocation approach focused on
value creation for our shareholders."
(1)
|
Results and cash flows
are presented on a continuing operations basis. See page 8 for
further information, including the basis of presentation included
in this release.
|
(2)
|
Adjusted EPS, operating
EBITDA, organic sales, adjusted free cash flow and adjusted free
cash flow conversion are non-GAAP measures and only reflect
continuing operations. See pages 9-10 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 15 of this communication. Adjusted
EPS outlook on page 6 assumes $1B share repurchase program is
substantially complete by year-end 2024.
|
(3)
|
Future dividends are at
the discretion of the DuPont Board of Directors.
|
Fourth Quarter 2023
Results(1)
|
|
Dollars in millions,
unless noted
|
4Q'23
|
4Q'22
|
Change
vs.
4Q'22
|
Organic Sales
(2)
vs.
4Q'22
|
Net sales
|
$2,898
|
$3,104
|
(7) %
|
(10) %
|
GAAP (Loss) Income from
continuing operations
|
$(300)
|
$105
|
(385) %
|
|
Operating
EBITDA(2)
|
$715
|
$758
|
(6) %
|
|
Operating
EBITDA(2) margin %
|
24.7 %
|
24.4 %
|
30 bps
|
|
GAAP EPS from
continuing operations
|
$(0.72)
|
$0.20
|
(460) %
|
|
Adjusted
EPS(2)
|
$0.87
|
$0.89
|
(2) %
|
|
Cash provided by
operating activities – cont. ops.
|
$646
|
$185
|
249 %
|
|
Adjusted free cash
flow(2)
|
$501
|
$188
|
166 %
|
|
Net sales
- Net sales decreased 7% as organic sales(2) decline
of 10% was partially offset by favorable portfolio impact of 3%,
primarily reflecting the August
1st acquisition of Spectrum.
- Organic sales(2) decline of 10% consisted of a 9%
decrease in volume and a 1% decrease in price.
- Lower volume was driven primarily by the impact of channel
inventory destocking within Safety Solutions, most notably for
medical packaging, and within Water Solutions mainly in
China.
- 15% organic sales(2) decline in Water &
Protection; 7% organic sales(2) decline in Electronics
& Industrial; 4% organic sales(2) decline in the
retained businesses reported in Corporate.
- 13% organic sales(2) decline in U.S. &
Canada; 11% organic
sales(2) decline in Asia
Pacific; 9% organic sales(2) decline in
EMEA.
GAAP Loss from continuing operations
- GAAP Loss from continuing operations compared to GAAP Income
from continuing operations in the year-ago period resulted
primarily due to a goodwill impairment charge partially offset by a
tax benefit related to internal restructuring.
Goodwill Impairment
In connection with the preparation of year-end 2023 financial
statements, driven by the continuation of a challenging
macroeconomic environment primarily impacting construction markets,
as well as incremental channel inventory destocking in medical
packaging and industrial-based end-markets, DuPont identified a
triggering event as of December 31,
2023 and performed an impairment analysis of the Protection
reporting unit which consists of the Shelter Solutions and Safety
Solutions lines of business within Water & Protection. The
carrying value of the Protection reporting unit contains historical
DuPont assets and liabilities that were measured at fair value in
connection with the merger between Dow and DuPont, including the
recognition of significant goodwill and intangible asset balances.
Based on the analysis, DuPont recorded an $804 million non-cash goodwill impairment charge
which is reflected in fourth quarter and full year 2023 GAAP
earnings results.
Operating EBITDA(2)
- Operating EBITDA(2) decreased as volume declines and
the impact of reduced production rates to better align inventory
with demand were partially offset by lower input costs, certain
discrete items which benefited earnings by about $40 million and the earnings contribution from
the Spectrum acquisition.
Adjusted EPS(2)
- Adjusted EPS(2) decreased as lower segment earnings,
foreign exchange losses led by devaluation of the Argentinian peso
and higher depreciation more than offset the impact of a lower
share count and a lower tax rate.
Cash provided by operating activities from continuing
operations
- Cash provided by operating activities from continuing
operations in the quarter of $646
million and capital expenditures of $145 million resulted in adjusted free cash
flow(2) of $501 million.
Adjusted free cash flow conversion(2) during the quarter
was 133%.
Full Year 2023
Results(1)
|
|
Dollars in millions,
unless noted
|
FY'23
|
FY'22
|
Change
vs.
FY'22
|
Organic Sales
(2)
vs.
FY'22
|
Net sales
|
$12,068
|
$13,017
|
(7) %
|
(6) %
|
GAAP Income from
continuing operations
|
$533
|
$1,061
|
(50) %
|
|
Operating
EBITDA(2)
|
$2,942
|
$3,261
|
(10) %
|
|
Operating
EBITDA(2) margin %
|
24.4 %
|
25.1 %
|
(70)bps
|
|
GAAP EPS from
continuing operations
|
$1.09
|
$2.02
|
(46) %
|
|
Adjusted
EPS(2)
|
$3.48
|
$3.41
|
2 %
|
|
Cash provided by
operating activities – cont. ops.
|
$2,191
|
$1,249
|
75 %
|
|
Adjusted free cash
flow(2)
|
$1,572
|
$750
|
110 %
|
|
Net sales
- Net sales decreased 7% on organic sales(2) decline
of 6% and a currency headwind of 1%.
- Organic sales(2) decline of 6% consisted of an 8%
decrease in volume partially offset by a 2% increase in price.
- 11% organic sales(2) decline in Electronics &
Industrial; 4% organic sales(2) decline in Water &
Protection; 3% organic sales(2) growth in the retained
businesses reported in Corporate.
- 11% organic sales(2) decline in Asia Pacific; 6% organic sales(2)
decline in U.S. & Canada; 1%
organic sales(2) decline in EMEA.
GAAP Income/GAAP EPS from continuing operations
- GAAP income/GAAP EPS from continuing operations decreased as a
goodwill impairment charge and lower segment earnings more than
offset a tax benefit related to internal restructuring, lower net
interest expense and the impact of a lower share count.
Operating EBITDA(2)
- Operating EBITDA(2) decreased as volume declines and
the impact of reduced production rates to better align inventory
with demand were partially offset by the carryover impact of
pricing actions and lower input costs.
Adjusted EPS(2)
- Adjusted EPS(2) increased as the impact of a lower
share count and lower net interest expense more than offset lower
segment earnings.
Cash provided by operating activities from continuing
operations
- Cash provided by operating activities from continuing
operations for the year of $2.2
billion and capital expenditures of $0.6 billion resulted in adjusted free cash
flow(2) of $1.6 billion.
Adjusted free cash flow conversion(2) for the year was
100%.
Share Repurchase
DuPont today announced completion of the $2 billion accelerated share repurchase ("ASR")
transaction launched in September
2023 which completes its $5
billion share repurchase program announced in November 2022. In connection with completion of
the $2 billion ASR transaction,
DuPont received and retired in the first quarter of 2024 an
additional 6.7 million shares of its common stock. In total for the
$2B ASR transaction, DuPont received
and retired 27.9 million shares of its common stock.
Additionally, DuPont announced that its Board of Directors
approved a new share repurchase program authorizing the repurchase
and retirement of up to $1 billion of
common stock (the "$1B Program").
DuPont intends to enter into ASR transactions under the
$1B Program beginning with an ASR
transaction expected to be launched imminently to repurchase in
aggregate $500 million of common
stock. DuPont expects to complete the $1B Program by the end of 2024.
Under the $1B Program, repurchases
may be made from time to time on the open market at prevailing
market prices or in privately negotiated transactions off market.
The $1B Program terminates on
June 30, 2025, unless extended or
shortened by the Board of Directors. 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.
Quarterly Dividend
The Company today also announced that its Board of Directors has
declared a first quarter dividend of $0.38 per share on its outstanding common stock,
representing a 6% increase to its quarterly
dividend(3), payable March
15, 2024, to holders of record at the close of business on
February 29, 2024.
Segment Highlights
Fourth Quarter 2023
Electronics &
Industrial
|
|
Dollars in millions,
unless noted
|
4Q'23
|
4Q'22
|
Change
vs.
4Q'22
|
Organic
Sales(2)
vs.
4Q'22
|
Net sales
|
$1,361
|
$1,343
|
1 %
|
(7) %
|
Operating
EBITDA
|
$378
|
$407
|
(7) %
|
|
Operating EBITDA margin
%
|
27.8 %
|
30.3 %
|
(250) bps
|
|
Net sales
- Net sales increased 1% as favorable portfolio impact of 8%
reflecting the Spectrum acquisition was offset by organic
sales(2) decline of 7%.
- Organic sales(2) decline of 7% reflects a 5% decline
in volume and a 2% decline in price.
- Semiconductor Technologies sales down high-single digits
on an organic basis resulting from a continuation of customer
inventory destocking and reduced semiconductor fab utilization
rates. Semiconductor Technologies sales increased 2% sequentially
in the fourth quarter.
- Interconnect Solutions sales down mid-single digits on
an organic basis as low-single digit volume gains were more than
offset by the impact of lower pass-through metals prices.
- Industrial Solutions sales down mid-single digits on an
organic basis due primarily to channel inventory destocking within
biopharma markets and for semiconductor-related capex equipment,
slightly offset by increased demand for OLED materials.
Operating EBITDA
- Operating EBITDA decreased due to volume declines and reduced
production rates to better align inventory with demand, partly
offset by earnings associated with Spectrum.
Water &
Protection
|
|
Dollars in millions,
unless noted
|
4Q'23
|
4Q'22
|
Change
vs.
4Q'22
|
Organic
Sales(2)
vs.
4Q'22
|
Net sales
|
$1,277
|
$1,497
|
(15) %
|
(15) %
|
Operating
EBITDA
|
$314
|
$360
|
(13) %
|
|
Operating EBITDA margin
%
|
24.6 %
|
24.0 %
|
60 bps
|
|
Net sales
- Net sales decreased 15% due to lower volumes.
- Safety Solutions sales down 20% on an
organic(2) basis on volume declines driven mainly by
channel inventory destocking, most notably for medical packaging
products within healthcare markets.
- Water Solutions sales down high-teens on an
organic(2) basis driven by lower volumes resulting from
distributor inventory destocking and weaker industrial demand in
China.
- Shelter Solutions sales down mid-single digits on an
organic(2) basis, however, the year-over-year decline
continues to improve and channel inventory destocking is
complete.
Operating EBITDA
- Operating EBITDA decreased due to lower volumes and reduced
production rates partially offset by the impact of lower input
costs and certain discrete items of about $25 million which benefited earnings.
Full Year 2023
Electronics &
Industrial
|
|
Dollars in millions,
unless noted
|
FY'23
|
FY'22
|
Change
vs.
FY'22
|
Organic
Sales(2)
vs.
FY'22
|
Net sales
|
$5,337
|
$5,917
|
(10) %
|
(11) %
|
Operating
EBITDA
|
$1,472
|
$1,836
|
(20) %
|
|
Operating EBITDA margin
%
|
27.6 %
|
31.0 %
|
(340) bps
|
|
Net sales
- Net sales decreased 10% as organic sales(2) decline
of 11% and a currency headwind of 1% was slightly offset by
favorable portfolio impact of 2%, primarily reflecting the Spectrum
acquisition.
- Organic sales(2) decline of 11% reflects a decline
in volume.
- Semiconductor Technologies sales down mid-teens on an
organic basis resulting from channel inventory destocking and
reduced semiconductor fab utilization rates.
- Interconnect Solutions sales down mid-teens on an
organic basis driven by lower consumer electronics volumes and
channel inventory destocking compared to the prior year, as well as
the impact of lower pass-through metals prices.
- Industrial Solutions sales down low-single digits on an
organic basis due primarily to channel inventory destocking within
biopharma markets and continued lower demand in electronics-related
markets, slightly offset by increased demand for OLED
materials.
Operating EBITDA
- Operating EBITDA decreased due to volume declines and reduced
production rates to better align inventory with demand, slightly
offset by contribution associated with Spectrum.
Water &
Protection
|
|
Dollars in millions,
unless noted
|
FY'23
|
FY'22
|
Change
vs.
FY'22
|
Organic
Sales(2)
vs.
FY'22
|
Net sales
|
$5,633
|
$5,957
|
(5) %
|
(4) %
|
Operating
EBITDA
|
$1,388
|
$1,431
|
(3) %
|
|
Operating EBITDA margin
%
|
24.6 %
|
24.0 %
|
60 bps
|
|
Net sales
- Net sales decreased 5% due to organic sales(2)
decline of 4% and a currency headwind of 1%.
- Organic sales(2) decline of 4% consists a 7% decline
in volume partially offset by a 3% increase in price reflecting the
carryover impact of actions taken in the prior year to offset
inflation.
- Shelter Solutions sales down high-single digits on an
organic(2) basis.
- Safety Solutions sales down mid-single digits on an
organic(2) basis due to volume declines driven by
channel inventory destocking.
- Water Solutions sales down low-single digits on an
organic(2) basis driven by lower volumes resulting
distributor inventory destocking and weaker industrial demand in
China.
Operating EBITDA
- Operating EBITDA decreased due to lower volumes, reduced
production rates and currency headwinds partly offset by the
impact of net pricing benefits.
2024 Financial
Outlook
|
|
Dollars in millions,
unless noted
|
|
1Q'24E
|
Full Year
2024E
|
Net sales
|
|
~$2,800
|
$11,900 -
$12,300
|
Operating
EBITDA(2)
|
|
~$610
|
$2,800 -
$3,000
|
Adjusted
EPS(2)
|
|
$0.63 -
$0.65
|
$3.25 -
$3.65
|
"Despite significant volume pressure in 2023, we maintained
sound focus on the operational levers within our control, working
to minimize margin impacts while driving substantial cash flow
improvement versus last year," said Lori
Koch, Chief Financial Officer of DuPont. "In addition, we
acted quickly in executing restructuring actions to reduce costs
that we announced this past November and will begin to realize the
associated savings later in the first quarter."
"For the first quarter of 2024, we expect sequential sales and
earnings decline from the fourth quarter driven by additional
channel inventory destocking within our industrial-based businesses
along with continued weak demand in China. We also note the absence of about
$40 million of certain discrete items
which benefited fourth quarter operating EBITDA," Koch continued.
"We expect sequential sales improvement and an approximate ten
percent increase in operating EBITDA in the second quarter of 2024
from first quarter driven by some inventory destocking abatement,
seasonality factors and realization of cost savings."
"Our current expectation for full year 2024 forecasts a return
to year-over-year sales and earnings growth in the second half
driven by anticipated electronics market recovery, including
improvement in semiconductor fab utilization rates, as well as
improved orders within industrial markets as customer inventory
levels normalize," Koch concluded.
Conference Call
The Company will host a live
webcast of its quarterly 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.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
Overview
On November 1,
2022, DuPont completed the divestiture, previously announced
on February 18, 2022, of the majority
of the historical Mobility & Materials segment, including the
Engineering Polymers business line and select product lines within
the Advanced Solutions and Performance Resins business lines (the
"M&M Divestiture"), to Celanese Corporation ("Celanese"). The
Company also announced on February 18,
2022, that its Board of Directors approved the divestiture
of the Delrin® acetal homopolymer (H-POM) business. On November 1, 2023, DuPont completed the
divestiture of the Delrin® business to TJC LP, (the "Delrin®
Divestiture" and together with the M&M Divestiture, the
"M&M Divestitures")
The results of operations for the three and twelve months ended
December 31, 2023, present the
financial results of the Delrin® Divestiture as discontinued
operations. In the comparative periods, the results of operations
for both the M&M Divestiture and the Delrin® Divestiture are
presented as discontinued operations. Unless otherwise indicated,
the discussion of results, including the financial measures further
discussed below, refers only to DuPont's Continuing Operations and
does not include discussion of balances or activity of the M&M
Divestitures.
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,"
"stabilization," "confident," "preliminary," "initial," and similar
expressions and variations or negatives of these words. All
statements, other than statements of historical fact, are
forward-looking statements, including statements regarding
outlook.
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 $1 billion share
repurchase program announced on February 6,
2024 and that the program may be suspended, discontinued or
not completed prior to its termination on June 30, 2025; (ii) risks and uncertainties
related to the settlement agreement concerning PFAS liabilities
reached June 2023 with plaintiff
water utilities by Chemours, Corteva, EIDP and DuPont, including
timing of court approval; (iii) 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, including the outcome of any pending
or future litigation related to PFAS or PFOA, including personal
injury claims and natural resource damages claims; the extent and
cost of ongoing remediation obligations and potential future
remediation obligations; changes in laws and regulations applicable
to PFAS chemicals; (iv) ability to achieve anticipated tax
treatments in connection with completed and future, if any,
divestitures, mergers, acquisitions and other portfolio changes
actions and impact of changes in relevant tax and other laws; (v)
indemnification of certain legacy liabilities; (vi) failure to
realize expected benefits and effectively manage and achieve
anticipated synergies and operational efficiencies in connection
with completed and future, if any, divestitures, mergers,
acquisitions, and other portfolio management, productivity and
infrastructure actions; (vii) risks and uncertainties, including
increased costs and the ability to obtain raw materials and meet
customer needs from, among other events, pandemics and responsive
actions; timing and recovery from demand declines in
consumer-facing markets, including in China; adverse changes in worldwide economic,
political, regulatory, international trade, geopolitical, capital
markets and other external conditions; and other factors beyond the
Company's control, including inflation, recession, military
conflicts, natural and other disasters or weather related events,
that impact the operations of the Company, its customers and/or
suppliers; (viii) ability to offset increases in cost of inputs,
including raw materials, energy and logistics; (ix) risks
associated with demand and market conditions in the semiconductor
industry and associated end markets, including from continuing or
expanding trade disputes or restrictions, including on exports to
China of U.S.-regulated products
and technology; (x) 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 (xi)
other risks to DuPont's business and operations, including the risk
of impairment; 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
Unless otherwise
indicated, all financial metrics presented reflect continuing
operations only.
This communication 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 15 and
in the Reconciliation to Non-GAAP Measures on the Investors section
of the Company's website. Non-GAAP measures included in this
communication 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.
Indirect costs, such as those related to corporate and shared
service functions previously allocated to the M&M Divestitures,
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 is performing
post-closing of the M&M Divestiture or will perform post-close
of the Delrin Divestiture and for which it is/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 (formerly referred to as "Adjusted results")
is defined as income from continuing operations 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. Adjusted
Earnings is the numerator used in the calculation of Adjusted EPS,
as well as the denominator in the revised Adjusted Free Cash Flow
Conversion definition discussed below.
Adjusted EPS is defined as Adjusted Earnings per common share -
diluted. Management estimates amortization expense in 2024
associated with intangibles to be about $600
million on a pre-tax basis, or approximately $1.10 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.
Operating EBITDA Margin is defined as Operating EBITDA divided
by Net Sales.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
Adjusted Free Cash Flow is defined as cash provided by/used for
operating activities from continuing operations less capital
expenditures and excluding the impact of cash inflows/outflows that
are unusual in nature and/or infrequent in occurrence that neither
relate to the ordinary course of the Company's business nor reflect
the Company's underlying business liquidity. As a result, adjusted
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 from continuing operations. Management believes adjusted
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.
Beginning in the second quarter of 2023, the Company has
segregated the cash flows from discontinued operations from the
cash flows from continuing operations in accordance with ASC 230,
Statement of Cash Flows. In connection with this change, the
Company updated the definition of adjusted free cash flow to
include only activities from continuing operations. The Company
believes that excluding cash flows from discontinued operations
provides the Company's investors with better visibility into the
underlying businesses cash generation for ongoing businesses.
Adjusted Free Cash Flows has been recast for all periods to reflect
the change in definition.
As previously disclosed, in connection with its earnings release
for the third quarter of 2022, the Company updated the definition
of adjusted free cash flow to exclude the impact of cash
inflows/outflows that are of a certain magnitude, unusual in nature
and/or infrequent in occurrence that neither relate to the ordinary
course of the Company's business nor reflect the Company's
underlying business liquidity. Therefore, adjustments to exclude
the impact of cash inflows/outflows that are unusual in nature
and/or infrequent in occurrence that neither relate to the ordinary
course of the Company's business nor reflect the Company's
underlying business liquidity are adjusted to the extent they
relate to continuing operations. Management notes that for the
three and twelve month periods ended December 31, 2023, there were no exclusions for
items that are unusual in nature and/or infrequent in occurrence.
For the three and twelve month periods ended December 31, 2022, there is an exclusion of
$163 million related to the
termination fee associated with the Terminated Intended Rogers
Transaction which is considered by management to be unusual and
infrequent in nature and occurrence.
Management uses Adjusted Free Cash Flow Conversion as an
indicator of our ability to convert earnings to cash. The Company
has updated its definition of Adjusted Free Cash Flow Conversion to
Adjusted Free Cash Flow divided by Adjusted Earnings. Adjusted
Earnings is also the existing income measure used within the
calculation of Adjusted EPS (Non-GAAP). The previous definition of
Adjusted free cash flow conversion was adjusted free cash flow from
continuing operations divided by net income from continuing
operations adjusted to exclude the after-tax impact of noncash
impairment charges, gains or losses on divestitures and
amortization expense of intangibles. Management believes the
revised definition of adjusted free cash flow conversion provides
more consistency across the inputs used in the calculation of
performance metrics and better aligns with the segregation of
continuing operations within our Statement of Cash Flows. For the
three and twelve month periods ended December 31, 2023, the primary change in the
calculation from the previous definition is the exclusion of a
$324 million tax benefit due to an
internal restructuring involving certain foreign subsidiaries which
is a significant item recognized in the fourth quarter earnings of
2023. Adjusted free cash flow conversion has been recast for all
periods to reflect the change in definition and there were no
similar events of this magnitude in such periods. The information
in Non-GAAP Measures starting on page 15 is based upon the current
definition.
DuPont de Nemours,
Inc.
Consolidated
Statements of Operations
|
|
In millions, except per
share amounts (Unaudited)
|
Three Months
Ended
December 31,
|
Twelve Months
Ended
December 31,
|
2023
|
2022
|
2023
|
2022
|
Net sales
|
$
2,898
|
$
3,104
|
$ 12,068
|
$ 13,017
|
Cost of
sales
|
1,868
|
2,048
|
7,835
|
8,402
|
Research and
development expenses
|
128
|
123
|
508
|
536
|
Selling, general and
administrative expenses
|
350
|
337
|
1,408
|
1,467
|
Amortization of
intangibles
|
152
|
143
|
600
|
590
|
Restructuring and
asset related charges - net
|
107
|
54
|
146
|
155
|
Goodwill impairment
charges
|
804
|
—
|
804
|
—
|
Acquisition,
integration and separation costs
|
5
|
165
|
20
|
193
|
Equity in earnings of
nonconsolidated affiliates
|
11
|
13
|
51
|
75
|
Sundry income
(expense) - net
|
(10)
|
68
|
102
|
191
|
Interest
expense
|
101
|
122
|
396
|
492
|
(Loss) Income from
continuing operations before income taxes
|
(616)
|
193
|
504
|
1,448
|
(Benefit from)
Provision for income taxes on continuing operations
|
(316)
|
88
|
(29)
|
387
|
(Loss) Income from
continuing operations, net of tax
|
(300)
|
105
|
533
|
1,061
|
Income (loss) from
discontinued operations, net of tax
|
286
|
4,133
|
(71)
|
4,856
|
Net (loss)
income
|
(14)
|
4,238
|
462
|
5,917
|
Net income
attributable to noncontrolling interests
|
8
|
12
|
39
|
49
|
Net (loss) income
available for DuPont common stockholders
|
$
(22)
|
$
4,226
|
$
423
|
$
5,868
|
|
Per common share
data:
|
|
|
|
|
(Loss) earnings per
common share from continuing operations - basic
|
$
(0.72)
|
$
0.20
|
$
1.10
|
$
2.02
|
Earnings (loss) per
common share from discontinued operations - basic
|
0.66
|
8.66
|
(0.16)
|
9.75
|
(Loss) earnings per
common share - basic
|
$
(0.05)
|
$
8.85
|
$
0.94
|
$
11.77
|
(Loss) earnings per
common share from continuing operations - diluted
|
$
(0.72)
|
$
0.20
|
$
1.09
|
$
2.02
|
Earnings (loss) per
common share from discontinued operations - diluted
|
0.66
|
8.64
|
(0.16)
|
9.73
|
(Loss) earnings per
common share - diluted
|
$
(0.05)
|
$
8.83
|
$
0.94
|
$
11.75
|
|
Weighted-average common
shares outstanding - basic
|
430.3
|
477.3
|
449.9
|
498.5
|
Weighted-average common
shares outstanding - diluted
|
430.3
|
478.4
|
451.2
|
499.4
|
DuPont de Nemours,
Inc.
Consolidated
Balance Sheets
|
|
(In millions, except
share and per share amounts)
|
December 31,
2023
|
December 31,
2022
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
2,392
|
$
3,662
|
Marketable
securities
|
—
|
1,302
|
Restricted cash and
cash equivalents
|
411
|
7
|
Accounts and notes
receivable - net
|
2,370
|
2,518
|
Inventories
|
2,147
|
2,329
|
Prepaid and other
current assets
|
194
|
161
|
Assets of discontinued
operations
|
—
|
1,291
|
Total current
assets
|
7,514
|
11,270
|
Property
|
|
|
Property, plant and
equipment
|
10,725
|
10,179
|
Less: Accumulated
depreciation
|
4,841
|
4,448
|
Property, plant and
equipment - net
|
5,884
|
5,731
|
Other Assets
|
|
|
Goodwill
|
16,720
|
16,663
|
Other intangible
assets
|
5,814
|
5,495
|
Restricted cash and
cash equivalents - noncurrent
|
—
|
103
|
Investments and
noncurrent receivables
|
1,071
|
733
|
Deferred income tax
assets
|
312
|
109
|
Deferred charges and
other assets
|
1,237
|
1,251
|
Total other
assets
|
25,154
|
24,354
|
Total Assets
|
$
38,552
|
$
41,355
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term
borrowings
|
$
—
|
$
300
|
Accounts
payable
|
1,675
|
2,103
|
Income taxes
payable
|
154
|
233
|
Accrued and other
current liabilities
|
1,269
|
951
|
Liabilities of
discontinued operations
|
—
|
146
|
Total current
liabilities
|
3,098
|
3,733
|
Long-Term
Debt
|
7,800
|
7,774
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
1,130
|
1,158
|
Pension and other
post-employment benefits - noncurrent
|
565
|
522
|
Other noncurrent
obligations
|
1,234
|
1,151
|
Total other noncurrent
liabilities
|
2,929
|
2,831
|
Total
Liabilities
|
13,827
|
14,338
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value each; issued
2023:
430,110,140 shares; 2022: 458,124,262
shares)
|
4
|
5
|
Additional paid-in
capital
|
48,059
|
48,420
|
Accumulated
deficit
|
(22,874)
|
(21,065)
|
Accumulated other
comprehensive loss
|
(910)
|
(791)
|
Total DuPont
stockholders' equity
|
24,279
|
26,569
|
Noncontrolling
interests
|
446
|
448
|
Total
equity
|
24,725
|
27,017
|
Total Liabilities and
Equity
|
$
38,552
|
$
41,355
|
DuPont de Nemours,
Inc.
Consolidated
Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Twelve Months Ended
December 31,
|
2023
|
2022
|
Operating
Activities
|
|
|
Net income
|
$
462
|
$
5,917
|
(Loss) income from
discontinued operations
|
(71)
|
4,856
|
Net income from
continuing operations
|
$
533
|
$
1,061
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
1,147
|
1,135
|
Credit for deferred
income tax and other tax related items
|
(381)
|
(157)
|
Earnings of
nonconsolidated affiliates less than (in excess of) dividends
received
|
20
|
36
|
Net periodic pension
benefit cost
|
31
|
2
|
Periodic benefit plan
contributions
|
(63)
|
(66)
|
Net gain on sales of
assets, businesses and investments
|
(19)
|
(78)
|
Restructuring and
asset related charges - net
|
146
|
155
|
Goodwill impairment
charge
|
804
|
—
|
Other net
loss
|
128
|
16
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
202
|
(79)
|
Inventories
|
227
|
(215)
|
Accounts
payable
|
(310)
|
(138)
|
Other assets and
liabilities, net
|
(274)
|
(423)
|
Cash provided by
operating activities - continuing operations
|
2,191
|
1,249
|
Investing
Activities
|
|
|
Capital
expenditures
|
(619)
|
(662)
|
Proceeds from sales of
property, businesses, and ownership interests in nonconsolidated
affiliates, net of cash divested
|
1,244
|
10,951
|
Acquisitions of
property and businesses, net of cash acquired
|
(1,761)
|
5
|
Purchases of
investments
|
(32)
|
(1,317)
|
Proceeds from sales
and maturities of investments
|
1,334
|
15
|
Other investing
activities, net
|
6
|
12
|
Cash provided by
investing activities - continuing operations
|
172
|
9,004
|
Financing
Activities
|
|
|
Changes in short-term
borrowings
|
—
|
(150)
|
Proceeds from credit
facility
|
—
|
600
|
Repayment of credit
facility
|
—
|
(600)
|
Payments on long-term
debt
|
(300)
|
(2,500)
|
Purchases of common
stock and forward contracts
|
(2,000)
|
(4,375)
|
Proceeds from issuance
of Company stock
|
27
|
88
|
Employee taxes paid
for share-based payment arrangements
|
(27)
|
(27)
|
Distributions to
noncontrolling interests
|
(37)
|
(26)
|
Dividends paid to
stockholders
|
(651)
|
(652)
|
Other financing
activities, net
|
(1)
|
(4)
|
Cash used for
financing activities - continuing operations
|
(2,989)
|
(7,646)
|
Cash Flows from
Discontinued Operations
|
|
|
Cash used for
operations - discontinued operations
|
(273)
|
(661)
|
Cash used for
investing activities - discontinued operations
|
(33)
|
(81)
|
Cash used for
financing activities - discontinued operations
|
—
|
(21)
|
Cash used in
discontinued operations
|
(306)
|
(763)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(37)
|
(148)
|
(Decrease) increase
in cash, cash equivalents and restricted cash
|
(969)
|
1,696
|
Cash, cash equivalents
and restricted cash from continuing operations, beginning of
period
|
3,772
|
2,037
|
Cash, cash equivalents
and restricted cash from discontinued operations, beginning of
period
|
—
|
39
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
3,772
|
2,076
|
Cash, cash equivalents
and restricted cash from continuing operations, end of
period
|
2,803
|
3,772
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
—
|
—
|
Cash, cash
equivalents and restricted cash at end of period
|
$
2,803
|
$
3,772
|
DuPont de Nemours,
Inc.
Net Sales by
Segment and Geographic Region
|
|
Net Sales by Segment
and Geographic Region
|
Three Months
Ended
|
Twelve Months
Ended
|
In millions
(Unaudited)
|
Dec 31,
2023
|
Dec 31,
2022
|
Dec 31,
2023
|
Dec 31,
2022
|
Electronics &
Industrial
|
$
1,361
|
$
1,343
|
$
5,337
|
$
5,917
|
Water &
Protection
|
1,277
|
1,497
|
5,633
|
5,957
|
Corporate & Other
1
|
260
|
264
|
1,098
|
1,143
|
Total
|
$
2,898
|
$
3,104
|
$
12,068
|
$
13,017
|
U.S. &
Canada
|
$
1,024
|
$
1,066
|
$
4,185
|
$
4,359
|
EMEA
2
|
501
|
528
|
2,203
|
2,193
|
Asia
Pacific3
|
1,246
|
1,400
|
5,191
|
6,022
|
Latin
America
|
127
|
110
|
489
|
443
|
Total
|
$
2,898
|
$
3,104
|
$
12,068
|
$
13,017
|
Net Sales Variance
by Segment and
Geographic Region
|
Three Months Ended
December 31, 2023
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Industrial
|
(2) %
|
(5) %
|
(7) %
|
— %
|
8 %
|
1 %
|
|
Water &
Protection
|
—
|
(15)
|
(15)
|
—
|
—
|
(15)
|
|
Corporate & Other
1
|
(3)
|
(1)
|
(4)
|
2
|
—
|
(2)
|
|
Total
|
(1) %
|
(9) %
|
(10) %
|
— %
|
3 %
|
(7) %
|
|
U.S. &
Canada
|
(1) %
|
(12) %
|
(13) %
|
— %
|
9 %
|
(4) %
|
|
EMEA2
|
2
|
(11)
|
(9)
|
4
|
—
|
(5)
|
|
Asia
Pacific3
|
(2)
|
(9)
|
(11)
|
—
|
—
|
(11)
|
|
Latin
America
|
(2)
|
10
|
8
|
1
|
6
|
15
|
|
Total
|
(1) %
|
(9) %
|
(10) %
|
— %
|
3 %
|
(7) %
|
|
|
|
Net Sales Variance
by Segment and
Geographic Region
|
Twelve Months Ended
December 31, 2023
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Industrial
|
— %
|
(11) %
|
(11) %
|
(1) %
|
2 %
|
(10) %
|
|
Water &
Protection
|
3
|
(7)
|
(4)
|
(1)
|
—
|
(5)
|
|
Corporate & Other
1
|
1
|
2
|
3
|
—
|
(7)
|
(4)
|
|
Total
|
2 %
|
(8) %
|
(6) %
|
(1) %
|
— %
|
(7) %
|
|
U.S. &
Canada
|
3 %
|
(9) %
|
(6) %
|
— %
|
2 %
|
(4) %
|
|
EMEA2
|
3
|
(4)
|
(1)
|
1
|
—
|
—
|
|
Asia
Pacific3
|
—
|
(11)
|
(11)
|
(2)
|
(1)
|
(14)
|
|
Latin
America
|
1
|
7
|
8
|
—
|
2
|
10
|
|
Total
|
2 %
|
(8) %
|
(6) %
|
(1) %
|
— %
|
(7) %
|
|
1.
|
Corporate & Other
includes activities of the Retained Businesses and Biomaterials
prior to its May 2022 divestiture.
|
2.
|
Europe, Middle East and
Africa.
|
3.
|
Net sales attributed to
China/Hong Kong, for the three months ended December 31, 2023 and
2022 were $537 million and $625 million, respectively,
while for the twelve months ended December 31, 2023 and 2022 net
sales attributed to China/Hong Kong were $2,206 million and
$2,744 million, respectively.
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
|
|
|
Operating
EBITDA by Segment
|
Three Months
Ended
|
Twelve Months
Ended
|
|
In millions
(Unaudited)
|
Dec 31,
2023
|
Dec 31,
2022
|
Dec 31,
2023
|
Dec 31,
2022
|
|
Electronics &
Industrial
|
$
378
|
$
407
|
$
1,472
|
$
1,836
|
|
Water &
Protection
|
314
|
360
|
1,388
|
1,431
|
|
Corporate & Other
1
|
23
|
(9)
|
82
|
(6)
|
|
Total
|
$
715
|
$
758
|
$
2,942
|
$
3,261
|
|
1. In addition to
corporate expenses, Corporate & Other includes activities of
the Retained Businesses and Biomaterials prior to its May 2022
divestiture.
|
|
|
|
|
|
|
|
|
Equity in Earnings
of Nonconsolidated Affiliates by Segment
|
Three Months
Ended
|
Twelve Months
Ended
|
|
In millions
(Unaudited)
|
Dec 31,
2023
|
Dec 31,
2022
|
Dec 31,
2023
|
Dec 31,
2022
|
|
Electronics &
Industrial
|
$
5
|
$
5
|
$
16
|
$
31
|
|
Water &
Protection
|
6
|
8
|
35
|
39
|
|
Corporate & Other
1
|
—
|
—
|
—
|
5
|
|
Total equity earnings
included in operating EBITDA (GAAP)
|
$
11
|
$
13
|
$
51
|
$
75
|
|
1. Corporate &
Other includes activities of the Retained Businesses and
Biomaterials prior to its May 2022 divestiture.
|
|
|
|
|
|
|
|
|
Reconciliation of
"Income from continuing operations, net of tax" to
"Operating EBITDA"
|
Three Months
Ended
|
Twelve Months
Ended
|
|
|
In millions
(Unaudited)
|
Dec 31,
2023
|
Dec 31,
2022
|
Dec 31,
2023
|
Dec 31,
2022
|
|
(Loss) income from
continuing operations, net of tax (GAAP)
|
$
(300)
|
$
105
|
$
533
|
$
1,061
|
|
+ (Benefit from)
Provision for income taxes on continuing operations
|
(316)
|
88
|
(29)
|
387
|
|
(Loss) income from
continuing operations before income taxes
|
$
(616)
|
$
193
|
$
504
|
$
1,448
|
|
+ Depreciation and
amortization
|
294
|
274
|
1,147
|
1,135
|
|
- Interest
income 1
|
23
|
42
|
155
|
50
|
|
+ Interest
expense
|
101
|
121
|
396
|
486
|
|
- Non-operating
pension/OPEB benefit (costs) credits 1
|
(2)
|
8
|
(9)
|
28
|
|
- Foreign
exchange (losses) gains, net 1
|
(42)
|
6
|
(73)
|
15
|
|
+ Future reimbursable
indirect costs
|
1
|
7
|
7
|
52
|
|
- Significant items
(charge) benefit
|
(914)
|
(219)
|
(961)
|
(233)
|
|
Operating EBITDA
(non-GAAP)
|
$
715
|
$
758
|
$
2,942
|
$
3,261
|
|
1. Included in
"Sundry income (expense) - net."
|
|
|
|
Reconciliation of
"Cash provided by operating activities - continuing
operations" to
"Adjusted free cash flow" 1 and calculation of
"Adjusted
free cash flow conversion"
|
Three Months
Ended
|
Twelve Months
Ended
|
|
In millions
(Unaudited)
|
Dec 31,
2023
|
Dec 31,
2022
|
Dec 31,
2023
|
Dec 31,
2022
|
|
Cash provided by
operating activities - continuing operations (GAAP)
2
|
$
646
|
$
185
|
$
2,191
|
$
1,249
|
|
Capital
expenditures
|
(145)
|
(160)
|
(619)
|
(662)
|
|
Rogers termination fee
3
|
—
|
163
|
—
|
163
|
|
Adjusted free cash flow
(non-GAAP)
|
$
501
|
$
188
|
$
1,572
|
$
750
|
|
Adjusted
earnings4 (non-GAAP)
|
$
376
|
$
425
|
$
1,570
|
$
1,702
|
|
Adjusted free cash flow
conversion (non-GAAP)5
|
133 %
|
44 %
|
100 %
|
44 %
|
|
1.
|
Adjusted free cash flow
is calculated on a continuing operations basis for all periods
presented. Refer to the definitions of Non-GAAP metrics on page
9-10 for additional information.
|
2.
|
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 -
continuing operations" for the twelve month periods
noted.
|
3.
|
Represents the
termination fee associated with the Terminated Intended Rogers
Transaction.
|
4.
|
Refer to pages 16-17
for the Non-GAAP reconciliation of Net income from continuing
operations available for DuPont common stockholders to Adjusted
Earnings (Non-GAAP).
|
5.
|
For the three and
twelve month periods ended December 31, 2023, the primary change in
the calculation from the previous definition is the exclusion of a
$324 million tax benefit due to an internal restructuring involving
certain foreign subsidiaries which is a significant item recognized
in the fourth quarter earnings of 2023. Adjusted free cash flow
conversion has been recast for all periods to reflect the change in
definition and there were no similar events of this magnitude in
such periods. Refer to the definitions on page 10 for further
information.
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
Significant Items
Impacting Results for the Three Months Ended December 31,
2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported earnings
(GAAP)
|
$ (616)
|
$ (308)
|
$ (0.72)
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(5)
|
(4)
|
(0.01)
|
Acquisition,
integration and separation costs
|
Restructuring and
asset related charges - net 5
|
(107)
|
(81)
|
(0.19)
|
Restructuring and asset
related charges - net
|
Goodwill impairment
charges 6
|
(804)
|
(804)
|
(1.86)
|
Goodwill impairment
charges
|
Gain on
divestiture
|
2
|
1
|
—
|
Sundry income (expense)
- net
|
Income tax related
item 7
|
—
|
324
|
0.75
|
(Benefit from)
provision for income taxes on
continuing operation
|
Total significant
items
|
$ (914)
|
$ (564)
|
$ (1.31)
|
|
Less: Amortization of
intangibles
|
(152)
|
(118)
|
(0.27)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit costs
|
(2)
|
(2)
|
(0.01)
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(1)
|
—
|
—
|
Selling, general and
administrative expenses
|
Adjusted earnings
(non-GAAP)
|
$
453
|
$
376
|
$ 0.87
|
|
|
Significant Items
Impacting Results for the Three Months Ended December 31,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported earnings
(GAAP)
|
$
193
|
$
94
|
$ 0.20
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 8
|
(165)
|
(128)
|
(0.27)
|
Acquisition,
integration and separation costs
|
Restructuring and
asset related charges - net 5
|
(54)
|
(42)
|
(0.09)
|
Restructuring and asset
related charges - net
|
Gain on divestiture
9
|
1
|
1
|
—
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 10
|
(1)
|
(1)
|
—
|
Interest
expense
|
Income tax related
item
|
—
|
(51)
|
(0.10)
|
(Benefit from)
provision for income taxes on
continuing operation
|
Total significant
items
|
$ (219)
|
$ (221)
|
$ (0.46)
|
|
Less: Amortization of
intangibles
|
(143)
|
(112)
|
(0.23)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit credits
|
8
|
7
|
0.01
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(7)
|
(5)
|
(0.01)
|
Cost of sales; Research
and development
expenses; Selling, general and
administrative expenses
|
Adjusted earnings
(non-GAAP)
|
$
554
|
$
425
|
$ 0.89
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income (loss) from
continuing operations available for DuPont common stockholders. The
income tax effect on significant items was calculated based upon
the enacted tax laws and statutory income tax rates applicable in
the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings (loss) per
common share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to the Spectrum
Acquisition.
|
5.
|
Includes restructuring
actions and asset related charges.
|
6.
|
Reflects a non-cash
goodwill impairment charge in the Protection Reporting unit
(aggregation of the Safety and Shelter businesses).
|
7.
|
Reflects the global
income tax impact of an internal restructuring involving certain
foreign subsidiaries.
|
8.
|
Acquisition,
integration and separation costs primarily reflect the termination
fee related to the Terminated Intended Rogers
Acquisition.
|
9.
|
Reflects a gain
adjustment related to the historical sales of Solamet® and TCS/HSC
reflected in Corporate & Other.
|
10.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Terminated Intended
Rogers Acquisition.
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
Significant Items
Impacting Results for the Twelve Months Ended December 31,
2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported earnings
(GAAP)
|
$ 504
|
$ 494
|
$ 1.09
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(20)
|
(18)
|
(0.04)
|
Acquisition,
integration and separation costs
|
Restructuring and
asset related charges - net 5
|
(146)
|
(111)
|
(0.25)
|
Restructuring and asset
related charges - net
|
Goodwill impairment
charges 6
|
(804)
|
(804)
|
(1.78)
|
Goodwill impairment
charges
|
Gain on divestiture
7
|
9
|
7
|
0.02
|
Sundry income (expense)
- net
|
Income tax related
item 8
|
—
|
329
|
0.73
|
Provision for income
taxes on continuing operations
|
Total significant
items
|
$ (961)
|
$ (597)
|
$
(1.32)
|
|
Less: Amortization of
intangibles
|
(600)
|
(468)
|
(1.04)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit costs
|
(9)
|
(7)
|
(0.02)
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(7)
|
(4)
|
(0.01)
|
Selling, general and
administrative expenses
|
Adjusted earnings
(non-GAAP)
|
$
2,081
|
$
1,570
|
$ 3.48
|
|
|
Significant Items
Impacting Results for the Twelve Months Ended December 31,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported earnings
(GAAP)
|
$
1,448
|
$
1,008
|
$ 2.02
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 9
|
(193)
|
(150)
|
(0.30)
|
Acquisition,
integration and separation costs
|
Restructuring and
asset related charges - net 5
|
(61)
|
(47)
|
(0.09)
|
Restructuring and asset
related charges - net
|
Asset impairment
charges 10
|
(94)
|
(65)
|
(0.13)
|
Restructuring and asset
related charges - net
|
Gain on divestitures
11
|
69
|
61
|
0.12
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 12
|
(6)
|
(5)
|
(0.01)
|
Interest
Expense
|
Income tax related
item
|
—
|
(52)
|
(0.11)
|
(Benefit from)
provision for income taxes
on continuing operations
|
Employee Retention
Credit 13
|
52
|
40
|
0.08
|
Cost of sales; Research
and development
expenses; Selling, general and
administrative expenses
|
Total significant
items
|
$ (233)
|
$ (218)
|
$
(0.44)
|
|
Less: Amortization of
intangibles
|
(590)
|
(459)
|
(0.92)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit credits
|
28
|
23
|
0.05
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(52)
|
(40)
|
(0.08)
|
Cost of sales; Research
and development
expenses; Selling, general and
administrative expenses
|
Adjusted earnings
(non-GAAP)
|
$
2,295
|
$
1,702
|
$ 3.41
|
|
1.
|
Income (loss) 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 (loss) per
common share from continuing operations - diluted.
|
4.
|
Acquisition,
integration and separation costs related to the Spectrum
Acquisition.
|
5.
|
Includes restructuring
actions and asset related charges.
|
6.
|
Reflects a non-cash
goodwill impairment charge in the Protection Reporting unit
(aggregation of the Safety and Shelter businesses).
|
7.
|
Reflects post-closing
adjustments related to previously divested businesses.
|
8.
|
Reflects the global
income tax impact of an internal restructuring involving certain
foreign subsidiaries.
|
9.
|
Acquisition,
integration and separation costs primarily related to the Intended
Rogers Acquisition and costs associated with the divestiture of the
Biomaterials business unit.
|
10.
|
Reflects a pre-tax
impairment charge related to an equity method
investment.
|
11.
|
Reflects a gain
adjustment primarily related to the historical sale of Biomaterials
reflected in Corporate & Other.
|
12.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Terminated Intended
Rogers Acquisition.
|
13.
|
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").
|
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SOURCE DuPont