DuPont Reports 4Q and Full-Year Operating EPS of $0.27 and $2.77

WILMINGTON, Del., Jan. 26, 2016 /PRNewswire/ --

Fourth-Quarter Highlights

• Fourth-quarter operating earnings per share were $0.27, in line with expectations, versus $0.57 in prior year. GAAP¹ (losses) earnings per share were ($0.26) versus $0.63 in prior year.
• Excluding currency, sales declined 1 percent. Currency negatively impacted sales by an additional 8 percent.
• Segment pre-tax operating earnings of $553 million included $170 million, or $0.17 per share, of negative impact from currency. Growth in Industrial Biosciences and Nutrition & Health was more than offset by declines in Agriculture, Performance Materials, Safety & Protection and Electronics & Communications.
• Cost reductions from operational redesign contributed an incremental $0.10 per share to fourth-quarter operating earnings.
• Actions underway for 2016 global cost savings and restructuring plan, expected to reduce operating costs² by about $1.0 billion on run-rate basis by end of 2016, which represents about $730 million in cost reductions in 2016 versus prior year.
• Completed $2 billion accelerated share repurchase program; announces first quarter dividend of $0.38 per share.

Full-Year Highlights

• Reported full-year operating earnings per share of $2.77 versus $3.36 in prior year. Operating earnings, excluding negative currency impact of $0.71 per share, increased 4 percent. GAAP¹ earnings per share were $2.09 versus $3.39 in prior year.
• Excluding currency and portfolio, sales declined 3 percent. Currency and portfolio negatively impacted sales by an additional 7 percent and 2 percent, respectively.
• Segment pre-tax operating earnings of $4.2 billion included approximately $785 million of negative impact from currency. Operating margins expanded in each segment, except Agriculture, on cost reductions and productivity.
• Cost reductions from 2014 operational redesign are essentially complete and contributed an incremental $0.40 per share to full-year operating earnings.

DuPont (NYSE: DD), a science company that brings world-class, innovative products, materials, and services to the global marketplace, today announced fourth-quarter 2015 operating earnings of $0.27 per share compared with $0.57 per share in the prior year.  GAAP¹ (losses) earnings were ($0.26) per share, compared with $0.63 per share in the prior year.  Refer to Schedule B for details of significant items.

For the full-year 2015, DuPont delivered operating earnings of $2.77 per share, compared with $3.36 per share in the prior year.  GAAP¹ earnings were $2.09 per share, compared with $3.39 per share in the prior year.

Fourth-quarter sales were $5.3 billion, down 9 percent versus prior year due to negative impacts from currency (8 percent) and volume (1 percent).  Full-year sales were $25.1 billion, down 12 percent versus prior year due to negative impacts from currency (7 percent), portfolio (2 percent) and volume (3 percent).

DuPont's board of directors approved a first-quarter dividend of 38 cents per share, the 446^th consecutive quarterly dividend since the company's first dividend in the fourth quarter of 1904. The first-quarter dividend of 38 cents per share of common stock is payable on March 14, 2016, to stockholders of record at the close of business on Feb. 12, 2016. Regular quarterly dividends of $1.125 per share on the $4.50 series preferred stock and $0.875 cents per share on the $3.50 series preferred stock also were declared, both payable on April 25, 2016, to stockholders of record as of April 8, 2016.

On Dec. 11, 2015, DuPont and The Dow Chemical Company announced that their boards of directors unanimously approved a definitive agreement under which the companies will combine in an all-stock merger of equals.  The combined company will be named DowDuPont.  The merger is expected to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals, and approval by both Dow and DuPont shareholders. The parties intend to subsequently pursue a separation of DowDuPont into three independent, publicly traded companies through tax-free spin-offs. These separations would occur as soon as feasible, subject to regulatory and board approval.  

"We are making progress on key initiatives, including further improving our cost structure and restructuring our organization to enhance our competitiveness," said Ed Breen, Chair and CEO of DuPont. "In this pivotal year for DuPont we have three priorities: deliver operating earnings growth while positioning our businesses to compete successfully over the long term; continue to improve our capital allocation and working capital performance; and complete the proposed merger of equals with Dow.  Our merger process is on track. We are meeting key milestones and have begun our planning to create three strong, highly focused, independent businesses in agriculture, material science and specialty products."

The following is a summary of business results for each of the company's reportable segments comparing fourth quarter with the prior year, unless otherwise noted.

Agriculture – An operating loss of $54 million resulted in $188 million lower operating earnings as increases in local price and cost reductions and continued productivity improvements were more than offset by a $139 million negative currency impact and about a $30 million negative impact from the continued shutdown of the LaPorte manufacturing facility.  Prior year results benefitted from a timing impact from performance-based compensation adjustments and $36 million in gains from portfolio actions. Excluding the impact of currency, the segment would have reported operating earnings of $85 million.

Electronics & Communications – Operating earnings of $87 million decreased $5 million, or 5 percent, as cost reductions and continued productivity improvements were more than offset by competitive pressures impacting Solamet® paste. Excluding the impact of currency, operating earnings would have decreased by about 10 percent.

Industrial Biosciences – Operating earnings of $55 million increased $11 million, or 25 percent, as benefits from cost reductions and continued productivity improvements were partially offset by a $2 million negative impact from currency and slightly lower pricing. Operating margins improved 450 basis points. Excluding the impact of currency, operating earnings would have increased 30 percent.

Nutrition & Health – Operating earnings of $85 million increased $6 million, or 8 percent, as cost reductions, continued productivity improvements and broad-based volume growth led by probiotics, cultures, and ingredient systems, more than offset the absence of an $18 million gain on termination of a distribution agreement in the prior year and a $12 million negative currency impact.  Excluding the impact of currency, operating earnings would have increased by about 23 percent.

Performance Materials – Operating earnings of $281 million decreased $45 million, or 14 percent. Cost reductions, continued productivity improvements and increased demand for Performance Polymers in global automotive markets, were more than offset by lower ethylene price and volume and $19 million of negative currency impact. Operating earnings included a $33 million benefit from the sale of a business and tax benefits associated with a manufacturing site.  Excluding the impact of currency, operating earnings would have decreased by about 8 percent.

Safety & Protection – Operating earnings of $182 million decreased $23 million, or 11 percent. Cost reductions and productivity improvements were more than offset by lower demand and a $2 million negative currency impact. Volume declines in Nomex® thermal-resistant fiber, Kevlar® high-strength material and Sustainable Solutions offerings were driven by weakness in the oil and gas industry and in military spending.  Excluding the impact of currency, operating earnings would have decreased by about 10 percent.

2016 Outlook
Current difficult global economic conditions in agriculture and slower growth in emerging markets are expected to continue, challenging the company's sales growth in 2016. The company expects 2016 operating earnings of $2.95 to $3.10 per share, including an expected benefit of $0.64 per share from the 2016 global cost savings and restructuring plan.  The increase in the expected benefit results from identification of additional savings that will be delivered from the existing plans, including previously announced employee reduction estimates. The benefit from the 2016 global cost savings and restructuring plan will be weighted toward the second half of 2016 as specific actions continue to be implemented in the first and second quarters.  2016 operating earnings also includes approximately $0.30 per share of estimated negative currency impact due to the continued strengthening of the U.S. dollar, pressuring both the top and bottom line.   A higher base tax rate, reflecting the expected geographic mix of earnings, is expected to negatively impact operating earnings by $0.05 - $0.10 per share.  The currency impact is expected to be most significant in the first half of the year due to a further weakening of the U.S dollar.  Given the seasonality of the company's operating earnings from Agriculture in the northern hemisphere, the company anticipates approximately two-thirds of the expected currency impact to occur in the first half of 2016. Excluding the impact of currency, the guidance for full-year operating earnings per share, including expected benefits from cost savings and share repurchases, represents a 17-23 percent increase year over year.

DuPont will hold a conference call and webcast on Tuesday, Jan. 26, 2016, at 8:00 AM EDT to discuss this news release.  The webcast and additional presentation materials can be accessed by visiting the company's investor website (Events & Presentations) at www.investors.dupont.com.  A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 9594983#.  For additional information see the investor center at http://www.dupont.com.

Use of Non-GAAP Measures
Management believes that certain non-GAAP measurements are meaningful to investors because they provide insight with respect to ongoing operating results of the company.  Such measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.  Reconciliations of non-GAAP measures to GAAP are provided in schedules A, C and D.

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

Forward-Looking Statements: This document contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "believes," "intends," "estimates," "anticipates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, and timing of, as well as expected benefits, including synergies, from proposed merger with The Dow Chemical Company and intended post-merger separations, are forward looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting products based on biotechnology and, in general, for  products for the agriculture industry; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could affect demand as well as availability of products for the agriculture industry; ability to protect and enforce the company's intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses; and risks related to the agreement entered on December 11, 2015,  with The Dow Chemical Company pursuant to which the companies  have agreed to effect an all-stock merger of equals, including the completion of the proposed transaction on anticipated terms and timing, the ability to fully and timely realize the expected benefits of the proposed transaction and risks related to the intended business separations contemplated to occur after the completion of the proposed transaction.  The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.