Market Overview

DowDuPont Reports Second Quarter 2018 Results

Share:
  • GAAP EPS from Continuing Operations of $0.76; Adj. EPS Increases 41%
    to $1.37
  • GAAP Net Income from Continuing Operations of $1.8B; Op. EBITDA Up 29%
    to $5.7B
  • Net Sales Up 17% to $24.2B; Volume and Local Price Gains in All
    Divisions and All Regions
  • Cost Synergy Savings of >$375MM; Raises YoY Savings Target >15% to
    $1.4B
  • Expects 3Q Op. EBITDA Growth in All Divisions: Ag mid-20s percent;
    Materials Science high-single digits percent; Specialty Products
    mid-teens percent

DowDuPont (NYSE:DWDP):

Second Quarter Financial Highlights

  • GAAP earnings per share from continuing operations was $0.76. Adjusted
    earnings1 per share increased 41 percent to $1.37, compared
    with pro forma adjusted earnings1 per share in the year-ago
    period of $0.97. Adjusted earnings per share excludes significant
    items in the quarter totaling net charges of $0.50 per share and an
    $0.11 per share charge for DuPont amortization of intangible assets.
  • Net sales increased 17 percent to $24.2 billion, with double-digit
    growth in all divisions and gains in all geographic regions, from pro
    forma net sales of $20.7 billion in the year-ago period. The
    Agriculture division increased sales 25 percent, driven by a recovery
    from weather-related delays in the first quarter and local price
    gains. The Materials Science division grew sales 18 percent, with
    double-digit gains in all segments and in all regions. The Specialty
    Products division increased sales 10 percent, with gains in most
    segments and all regions.
  • Volume grew 10 percent on a pro forma basis from the year-ago period,
    with gains in all divisions and all regions, led by double-digit gains
    in U.S. & Canada and Asia Pacific. Agriculture volume increased 20
    percent, primarily driven by a recovery from weather-related delays in
    the first quarter. Materials Science and Specialty Products volume
    increased 10 percent and 4 percent, respectively, both with gains in
    all segments and regions.
  • Local price rose 4 percent on a pro forma basis, with gains in all
    divisions and all regions, led by a 5 percent increase in Materials
    Science and a 4 percent increase in Agriculture.
  • Operating EBITDA1 increased 29 percent on a pro forma basis
    from the year-ago period to $5.7 billion. Agriculture achieved 45
    percent operating EBITDA growth. Specialty Products delivered
    operating EBITDA growth of 23 percent. Materials Science delivered
    operating EBITDA growth of 22 percent.
  • Operating EBITDA drivers in the quarter included volume and local
    price gains, cost synergies, currency, lower pension/OPEB costs2
    and higher equity earnings.
  • DowDuPont achieved cost synergy savings of more than $375 million in
    the quarter, reaching cumulative savings of nearly $900 million since
    merger close. The Company now expects to achieve year-over-year
    savings of $1.4 billion in 2018, a more than 15 percent increase from
    its previous target.
  • Cash flow from operations was $2.1 billion, driven by increased cash
    earnings.
  • The Company returned nearly $2 billion to shareholders in the quarter
    through dividends ($0.9 billion) and share repurchases ($1 billion).
    Since merger close, DowDuPont has returned $5.6 billion to
    shareholders.

CEO Quote

"We continued to deliver strong results in the second quarter, including
double-digit gains in sales and operating EBITDA," said Ed Breen, chief
executive officer of DowDuPont. "Volume growth, local price gains and
operating margin expansion were the key highlights, reflecting a clear
focus from the businesses on execution. Our new product launches are
resonating with customers, resulting in strong demand across each of our
targeted end-markets. These are indicators that our three divisions are
making a difference in the marketplace and for shareholders. We have
great momentum and our employees are enthusiastic about the future of
our intended industry-leading companies – Corteva, Dow and DuPont."

Second Quarter Division Highlights

Agriculture

  • Net sales of $5.7 billion increased 25 percent from pro forma net
    sales of $4.6 billion in the year-ago period, driven by sales
    recovered from weather-related delays to the Northern Hemisphere
    planting season, local price gains and double-digit growth in
    insecticides. Volume rose 20 percent, local price grew 4 percent and
    currency added 1 percent.
  • Operating EBITDA of $1.7 billion rose 45 percent versus pro forma
    operating EBITDA of $1.2 billion in the prior-year period.

Volume growth primarily reflected sales recovered from weather-related
delays to the start of the planting seasons in U.S. & Canada and EMEA,
which benefited both Seed and Crop Protection, partly offset by lower
expected planted area in U.S. & Canada. Price increases were driven by
Seed from continued penetration of new corn hybrids and A-series
soybeans. Total insecticide sales continued their growth trend and
increased nearly 20 percent in the quarter, driven by strong demand
creation efforts against competitive chemistries for Spinosyn™ products,
and new product launches.

Operating EBITDA improvement reflected volume growth in U.S. & Canada
and EMEA, higher selling prices in Seed, cost synergies, currency
benefits and lower pension/OPEB costs, partly offset by lower expected
planted area in U.S. & Canada, higher soybean royalty costs, increased
research and development spending to continue advancing the pipeline and
investments in digital platforms.

Agriculture First Half 2018 Results

First half net sales of $9.5 billion decreased 1 percent from pro forma
net sales of $9.6 billion in the year-ago period. Local price
improvement of 2 percent and currency benefits of 2 percent were more
than offset by a volume decline of 5 percent. Price increases reflected
continued penetration of new products, such as A-series soybeans. The
volume change was driven by lower expected planted area in U.S. & Canada
and a reduction in safrinha area in Brazil, partly offset by new product
launches in Crop Protection, such as Arylex™ herbicides and Isoclast™,
Pyraxalt™ and Spinosyn™ insecticides. Insecticide sales in the first
half continued to perform well with 17 percent growth versus prior year.

Operating EBITDA of $2.6 billion was down 2 percent versus the same
period last year. Cost synergies, favorable currency, lower pension/OPEB
costs and sales gains in Crop Protection were more than offset by higher
soybean royalty costs, lower expected planted area in U.S. and Canada, a
weaker safrinha season, and investments to support new product launches
and digital platforms.

Materials Science

  • Net sales increased 18 percent to $12.6 billion versus pro forma net
    sales in the year-ago period, with double-digit gains in all segments
    and in all regions. Volume grew 10 percent and local price rose 5
    percent, both with gains in all segments and all regions. Currency
    improved 3 percent.
  • Operating EBITDA grew 22 percent to $2.6 billion versus pro forma
    operating EBITDA in the same quarter last year, with double-digit
    gains in most segments.
  • Equity earnings improved $175 million, driven by increased earnings
    from the Kuwait joint ventures and improved results from Sadara.

Performance Materials & Coatings

Performance Materials & Coatings achieved net sales of $2.6 billion, up
15 percent versus pro forma net sales of $2.3 billion in the year-ago
period. Sales rose in all regions, led by double-digit increases in Asia
Pacific, EMEA and Latin America. Local price increased 10 percent, with
gains in all regions and in both businesses. Volume increased 2 percent
and currency benefited sales by 3 percent.

Consumer Solutions delivered double-digit sales growth, driven by
double-digit local price gains in all regions, disciplined price/volume
management in upstream silicone intermediate products and continued
delivery of growth synergies. Coatings & Performance Monomers achieved
high single-digit sales growth, driven by local price increases in all
regions in response to higher raw material costs, and volume gains in
Asia Pacific and Latin America.

Operating EBITDA increased to $569 million, up 5 percent from pro forma
operating EBITDA of $540 million in the year-ago period, primarily due
to increases in price, as well as other tailwinds including currency and
growth synergies.

Equity earnings for the segment totaled $36 million, compared with pro
forma equity earnings of $41 million in the year-ago period.

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure delivered net sales of $3.9
billion, up 29 percent versus pro forma net sales of $3.0 billion in the
year-ago period. Double-digit sales gains were achieved in all regions.
Volume grew 18 percent and local price rose 8 percent, both with gains
in all regions. Currency benefited sales by 3 percent.

Polyurethanes & CAV delivered double-digit sales gains in all regions,
driven by broad-based local price and volume growth. Volume growth was
led by Asia Pacific, driven by the continued ramp up of capacity at the
Sadara joint venture, and U.S & Canada on increased demand across vinyl
chloride monomer (VCM) and methylene diphenyl diisocyanate (MDI).
Industrial Solutions reported double-digit sales growth, driven by
volume and local price gains in all regions. Volume growth was led by
increasing production from the Sadara joint venture, as well as strong
gains in downstream intermediates, including polyglycols and heat
transfer fluids.

Operating EBITDA in the second quarter was $682 million, up 64 percent
from pro forma operating EBITDA of $417 million in the year-ago period.
Local price gains, cost synergies and improved equity earnings more than
offset the impact of higher raw material costs.

Equity earnings for the segment totaled $96 million, compared with pro
forma equity losses of $13 million in the year-ago period. The
year-over-year growth was driven by a reduction in equity losses from
the Sadara joint venture, resulting from the operation of new
facilities, and higher monoethylene glycol (MEG) pricing that benefited
the Kuwait joint ventures.

Packaging & Specialty Plastics

The Packaging & Specialty Plastics segment achieved net sales of $6.1
billion, up 12 percent from pro forma net sales of $5.4 billion in the
year-ago period. Sales rose in all regions, with double-digit increases
in Asia Pacific, EMEA and Latin America. Volume grew 8 percent, with
gains in all regions, while local price increased 1 percent. Currency
benefited sales by 3 percent, primarily in Europe.

The Packaging and Specialty Plastics business grew volume by 9 percent,
with gains in all regions, supported by broad-based demand strength, new
capacity additions on the U.S. Gulf Coast and increased Sadara
production. Double-digit demand growth was achieved in food and
specialty packaging, industrial and consumer packaging and rigid
packaging end-markets. The business also delivered growth in elastomers
applications, with double-digit volume gains in most regions, as well as
high single-digit demand growth in wire and cable applications, led by
U.S. & Canada and EMEA.

Operating EBITDA for the segment totaled $1.3 billion, up 14 percent
from pro forma operating EBITDA of $1.2 billion in the year-ago period.
Broad-based price increases; volume gains, including increased supply
from growth projects; lower commissioning and startup costs; higher
equity earnings; and cost synergies more than offset increased feedstock
costs and higher year-over-year planned maintenance activity.

Equity earnings for the segment were $108 million, up from pro forma
equity earnings of $37 million in the year-ago period, driven by higher
contributions from the Kuwait joint ventures and improved results from
the Sadara joint venture.

Specialty Products

  • Net sales increased 10 percent to $5.9 billion versus pro forma net
    sales in the year-ago period, with gains in all regions and in most
    segments. Volume grew 4 percent, local price rose 1 percent, currency
    improved 3 percent and portfolio benefited sales by 2 percent.
  • Operating EBITDA grew 23 percent to $1.6 billion versus pro forma
    operating EBITDA in the same quarter last year, with gains in most
    segments.

Electronics & Imaging

Electronics & Imaging delivered net sales of $1.2 billion, a decrease of
1 percent versus pro forma net sales in the year-ago period. Net sales
declined as volume growth of 3 percent and a 1 percent benefit from
currency were more than offset by a 5 percent negative impact from
portfolio-related actions (sale of the Display Films business).

Volume growth in the segment was led by a double-digit gain in
interconnect solutions and continued strength in semiconductor
technologies, primarily in Asia Pacific. Continued demand for consumer
electronics, as well as industrial applications, drove volume gains in
interconnect solutions. Increased semiconductor content in end-use
applications drove strong demand in both chemical mechanical
planarization (CMP) and advanced packaging market segments. Partially
offsetting this growth was a decline in photovoltaics on reduced demand
for Tedlar® film and Solamet® paste as module
production slowed in the quarter resulting from revised incentive
policies in China.

Operating EBITDA for the segment was $372 million, down 9 percent from
pro forma operating EBITDA of $410 million in the year-ago period. Cost
synergies, volume growth, lower pension/OPEB costs and a currency
benefit were more than offset by the absence of a prior-year gain on the
sale of a business ($48 million) and higher unit costs.

Nutrition & Biosciences

Nutrition & Biosciences reported net sales of $1.8 billion, an increase
of 19 percent from pro forma net sales of $1.5 billion in the year-ago
period. The increase was due to an 11 percent net benefit from
portfolio, 4 percent from volume, 3 percent from currency, and 1 percent
from local price. The net positive impact from portfolio-related actions
was due to the acquisition of FMC's Health & Nutrition business.

Volume growth in the segment was led by Nutrition & Health on improved
demand for specialty proteins and continued gains in probiotics and
pharmaceutical excipients, primarily in Asia Pacific and U.S. & Canada.
Industrial Biosciences volumes grew on increased demand for bioactives
in animal nutrition and home and personal care applications, coupled
with a double-digit improvement in CleanTech, led by alkylation
offerings in Asia Pacific and EMEA and acid equipment sales.

Operating EBITDA for the segment was $433 million, up 36 percent from
pro forma operating EBITDA of $318 million in the year-ago period driven
by a portfolio benefit, cost synergies, volume growth and lower
pension/OPEB costs.

Transportation & Advanced Polymers

Transportation & Advanced Polymers reported net sales of $1.5 billion,
up 14 percent from pro forma net sales of $1.3 billion in the year-ago
period. Organic sales increased 11 percent with strength in both price
and volume. Currency was a 3 percent benefit.

Volume gains of 6 percent reflected increases across all key
end-markets, including strong demand in automotive, electronics,
aerospace and healthcare. Volume was up in all regions, led by growth in
Asia Pacific and EMEA.

Price increased 5 percent, mainly within nylon enterprise and
polyesters, reflecting tight polymer supply and higher feedstock costs.

Operating EBITDA for the segment totaled $446 million, an increase of 45
percent from pro forma operating EBITDA of $308 million in the year-ago
period. Price and volume gains, lower pension/OPEB costs, currency and
cost synergies contributed to the improvement, partly offset by higher
raw material costs and increased planned turnaround activity.

Safety & Construction

Safety and Construction delivered net sales of $1.4 billion up 6 percent
from pro forma net sales of $1.3 billion in the prior year. Organic
sales increased 4 percent and currency was up 2 percent.

Volume was up 3 percent, driven by strength in aramids and
construction. Aramids growth was led by increased Nomex® thermal
resistant fiber sales into industrial and aircraft markets and increased
sales of Kevlar® high strength materials. Construction volumes increased
due to end-market improvement. Volumes were up across most regions, with
the strongest growth in U.S. & Canada and EMEA. Price was up 1 percent
with gains across all businesses.

Operating EBITDA for the segment totaled $341 million, an increase of 30
percent from pro forma operating EBITDA of $262 million in the year-ago
period. Lower pension/OPEB costs, increased volume, cost synergies and
favorable currency more than offset higher raw material and freight
costs.

Outlook

"Broad-based consumer strength continues to drive economic expansion and
our underlying business growth," said Howard Ungerleider, chief
financial officer of DowDuPont. "Leading indicators, such as
manufacturing output, employment, wages and consumer spending remain
largely constructive, supporting increased global economic activity. We
see some discrete headwinds, most notably currency fluctuations,
particularly in Agriculture, and higher raw materials costs in all three
divisions. Looking ahead, we continue to expect above-market growth
through much of DowDuPont's business portfolio, driven by our
innovations, growth investments, geographic reach and leading market
positions. We expect third quarter net sales to be up more than 10
percent and operating EBITDA up more than 12 percent year-over-year."

Conference Call

The Company will host a live
webcast
of its second quarter earnings conference call with
investors to discuss its results, business outlook and other matters
today at 8:00 a.m. ET. The slide presentation that accompanies the
conference call will be posted on the DowDuPont Investor Relations
events and presentations page.
A replay of the webcast will also be available on the investor events
and presentations page of www.dow-dupont.com.

 
(1) Adjusted earnings per share, Pro forma adjusted earnings per share,
Operating EBITDA and Pro forma operating EBITDA are non-GAAP
measures. See page 9 for further discussion. Second quarter 2017
information is on a pro forma basis and was determined in accordance
with Article 11 of Regulation S-X.
(2) Pension/OPEB (other post employment benefit plans) costs include all
components of net periodic benefit cost from continuing operations.
 

About DowDuPont™

DowDuPont (NYSE:DWDP) is a holding company comprised of The Dow
Chemical Company and DuPont with the intent to form strong, independent,
publicly traded companies in agriculture, materials science and
specialty products sectors that will lead their respective industries
through productive, science-based innovation to meet the needs of
customers and help solve global challenges. For more information, please
visit us at www.dow-dupont.com.

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.

On December 11, 2015, The Dow Chemical Company ("Dow") and E. I. du Pont
de Nemours and Company ("DuPont") entered into an Agreement and Plan of
Merger, as amended on March 31, 2017, (the "Merger Agreement") under
which the companies would combine in an all-stock merger of equals
transaction (the "Merger"). Effective August 31, 2017, the Merger was
completed and each of Dow and DuPont became subsidiaries of DowDuPont
(Dow and DuPont, and their respective subsidiaries, collectively
referred to as the "Subsidiaries").

Forward-looking statements by their nature address matters that are, to
varying degrees, uncertain, including the intended separation, subject
to approval of the Company's Board of Directors and customary closing
conditions of DowDuPont's agriculture, materials science and specialty
products businesses in one or more tax-efficient transactions on
anticipated terms (the "Intended Business Separations"). 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 DowDuPont's, Dow's or DuPont's
actual results to differ materially from those projected in any such
forward-looking statements include, but are not limited to: (i) costs to
achieve and achieving the successful integration of the respective
agriculture, materials science and specialty products businesses of Dow
and DuPont, anticipated tax treatment, unforeseen liabilities, future
capital expenditures, revenues, expenses, earnings, productivity
actions, economic performance, indebtedness, financial condition,
losses, future prospects, business and management strategies for the
management, expansion and growth of the combined operations; (ii) costs
to achieve and achievement of the anticipated synergies by the combined
agriculture, materials science and specialty products businesses; (iii)
risks associated with the Intended Business Separations, including
conditions which could delay, prevent or otherwise adversely affect the
proposed transactions, including possible issues or delays in obtaining
required regulatory approvals or clearances related to the Intended
Business Separations, associated costs, disruptions in the financial
markets or other potential barriers; (iv) disruptions or business
uncertainty, including from the Intended Business Separations, could
adversely impact DowDuPont's business (either directly or as conducted
by and through Dow or DuPont), or financial performance and its ability
to retain and hire key personnel; (v) uncertainty as to the long-term
value of DowDuPont common stock; and (vi) risks to DowDuPont's, Dow's
and DuPont's business, operations and results of operations from: the
availability of and fluctuations in the cost of feedstocks and energy;
balance of supply and demand and the impact of balance on prices;
failure to develop and market new products and optimally manage product
life cycles; ability, cost and impact on business operations, including
the supply chain, of responding to changes in market acceptance, rules,
regulations and policies and failure to respond to such changes; outcome
of significant litigation, environmental matters and other commitments
and contingencies; failure to appropriately manage process safety and
product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange rates;
changes in political conditions, including trade disputes and
retaliatory actions; business or supply disruptions; security threats,
such as acts of sabotage, terrorism or war, natural disasters and
weather events and patterns which could result in a significant
operational event for the Company, adversely impact demand or
production; ability to discover, develop and protect new technologies
and to protect and enforce the Company's intellectual property rights;
failure to effectively manage acquisitions, divestitures, alliances,
joint ventures and other portfolio changes; unpredictability and
severity of catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as management's
response to any of the aforementioned factors. These risks are and will
be more fully discussed in the current, quarterly and annual reports
filed with the U. S. Securities and Exchange Commission by DowDuPont.
While the list of factors presented here is, considered representative,
no such list should be considered to be a complete statement of all
potential risks and uncertainties. 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 disruption, operational problems, financial
loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on DowDuPont's, Dow's or DuPont's
consolidated financial condition, results of operations, credit rating
or liquidity. None of DowDuPont, Dow or DuPont assumes any 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. A detailed discussion of some of
the significant risks and uncertainties which may cause results and
events to differ materially from such forward-looking statements is
included in the section titled "Risk Factors" (Part I, Item 1A) of
DowDuPont's 2017 annual report on Form 10-K.

Discussion of segment revenue, operating EBITDA and price/volume metrics
on a divisional basis for Agriculture is based on the results of the
Agriculture segment; for Materials Science is based on the combined
results of the Performance Materials & Coatings, Industrial &
Infrastructure, and Packaging & Specialty Plastics segments; and for
Specialty Products is based on the combined results of the Electronics &
Imaging, Nutrition & Biosciences, Transportation & Advanced Polymers,
and Safety & Construction segments. The segment disclosures have been
presented in this manner for informational purposes only and should not
be viewed as an indication of each division's current or future
operating results on a standalone basis assuming completion of the
Intended Business Separations.

The Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all
products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks,
service marks or registered trademarks of The Dow Chemical Company, E.
I. du Pont de Nemours and Company, DowDuPont Inc. or their affiliates.

Merger of Equals

Effective August 31, 2017, pursuant to the merger of equals transaction
contemplated by the Agreement and Plan of Merger, dated as of December
11, 2015, as amended on March 31, 2017 (the "Merger Agreement"), The Dow
Chemical Company ("Dow") and E. I. du Pont de Nemours & Company
("DuPont") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont"
or the "Company") and, as a result, Dow and DuPont became subsidiaries
of DowDuPont Inc. (the "Merger"). Dow was determined to be the
accounting acquirer in the Merger and, as a result, the historical
financial statements of Dow, prepared under U.S. generally accepted
accounting principles ("U.S. GAAP"), for the periods prior to the Merger
are considered to be the historical financial statements of DowDuPont.

Unaudited Pro Forma Financial Information

In order to provide the most meaningful comparison of results of
operations and results by segment, supplemental unaudited pro forma
financial information has been included in the following financial
schedules. The unaudited pro forma financial information is based on the
historical consolidated financial statements and accompanying notes of
both Dow and DuPont and has been prepared to illustrate the effects of
the Merger, assuming the Merger had been consummated on January 1, 2016.
For the three and six months ended June 30, 2017, pro forma adjustments
have been made for (1) the preliminary purchase accounting impact, (2)
accounting policy alignment, (3) the elimination of the effect of events
that are directly attributable to the Merger Agreement (e.g., one-time
transaction costs), (4) the elimination of the impact of transactions
between Dow and DuPont, and (5) the elimination of the effect of
consummated divestitures agreed to with certain regulatory agencies as a
condition of approval for the Merger. The unaudited pro forma financial
information was based on and should be read in conjunction with the
separate historical financial statements and accompanying notes
contained in each of the Dow and DuPont Quarterly Reports on Form 10-Q
for the quarter ended June 30, 2017. The pro forma financial information
was prepared in accordance with Article 11 of Regulation S-X. The
results for the three and six months ended June 30, 2018, are presented
on a U.S. GAAP basis.

The unaudited pro forma financial information has been presented for
informational purposes only and is not necessarily indicative of what
DowDuPont's results of operations actually would have been had the
Merger been completed as of January 1, 2016, nor is it indicative of the
future operating results of DowDuPont. The unaudited pro forma
information does not reflect restructuring or integration activities or
other costs following the Merger that may be incurred to achieve cost or
growth synergies of DowDuPont. For further information on the unaudited
pro forma financial information, please refer to the Company's Current
Report on Form 8-K dated October 26, 2017.

Non-GAAP Financial Measures

This earnings release includes information that does not conform to U.S.
GAAP and are considered non-GAAP measures. These measures include the
Company's pro forma consolidated results and pro forma earnings per
share on an adjusted basis. Management uses these measures internally
for planning, forecasting and evaluating the performance of the
Company's segments, including allocating resources. DowDuPont's
management believes that these non-GAAP measures best reflect the
ongoing performance of the Company during the periods presented and
provide more relevant and meaningful information to investors as they
provide insight with respect to ongoing operating results of the Company
and a more useful comparison of year-over-year results. These non-GAAP
measures supplement the Company's U.S. GAAP disclosures and should not
be viewed as an alternative to U.S. GAAP measures of performance.
Furthermore, such non-GAAP measures may not be consistent with similar
measures provided or used by other companies. Non-GAAP measures included
in this release are defined below. 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. DowDuPont does not provide
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
pending litigation, unusual gains and losses, foreign currency exchange
gains or losses, potential future asset impairments and purchase
accounting fair value adjustments, as well as discrete taxable events,
without unreasonable effort. These items are uncertain, depend on
various factors, and could have a material impact on U.S. GAAP results
for the guidance period.

Adjusted earnings per share is defined as "Earnings per common share
from continuing operations - diluted" excluding the after-tax impact of
significant items and the after-tax impact of amortization expense
associated with DuPont's intangible assets. Pro forma adjusted earnings
per share is defined as "Pro Forma earnings per common share from
continuing operations - diluted" excluding the after-tax impact of pro
forma significant items and the after-tax impact of pro forma
amortization expense associated with DuPont's intangible assets.
Although amortization of DuPont's intangible assets is excluded from
these non-GAAP measures, management believes it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of intangible assets that relate to
past acquisitions will recur in future periods until such intangible
assets have been fully amortized. Any future acquisitions may result in
amortization of additional intangible assets.

Operating EBITDA is defined as earnings (i.e., "Income from continuing
operations before income taxes") before interest, depreciation,
amortization and foreign exchange gains (losses), excluding the impact
of significant items. Pro forma operating EBITDA is defined as pro forma
earnings (i.e., "Pro Forma income from continuing operations before
income taxes") before interest, depreciation, amortization and foreign
exchange gains (losses), excluding the impact of significant items.

Discussion of segment revenue, operating EBITDA and price/volume metrics
on a divisional basis for Agriculture is based on the results of the
Agriculture segment; for Materials Science is based on the combined
results of the Performance Materials & Coatings segment, the Industrial
Intermediates & Infrastructure segment and the Packaging & Specialty
Plastics segment; and for Specialty Products is based on the combined
results of the Electronics & Imaging segment, the Nutrition &
Biosciences segment, the Transportation & Advanced Polymers segment and
the Safety & Construction segment. The Corporate segment is not included
in the division metrics. The segment disclosures have been presented in
this manner for informational purposes only and should not be viewed as
an indication of each division's current or future operating results on
a standalone basis assuming completion of the Intended Business
Separations.

 
DowDuPont Inc.
Consolidated Statements of Income
         
In millions, except per share amounts (Unaudited)   Three Months Ended   Six Months Ended
 

Jun 30,
2018

 

Jun 30,
2017

 

Jun 30,
2018

 

Jun 30,
2017

Net sales   $ 24,245     $ 13,834     $ 45,755     $ 27,064  
Cost of sales 17,974   10,761   34,289   20,955
Research and development expenses 803 408 1,571 827
Selling, general and administrative expenses 1,933 720 3,647 1,479
Amortization of intangibles 488 157 962 312
Restructuring and asset related charges (credits) - net 189 (12 ) 451 (13 )
Integration and separation costs 558 136 1,015 245
Equity in earnings of nonconsolidated affiliates 250 54 507 250
Sundry income (expense) - net 178 322 293 (122 )
Interest expense and amortization of debt discount   360     226     710     445  
Income from continuing operations before income taxes   2,368     1,814     3,910     2,942  
Provision for income taxes on continuing operations   565     455     954     668  
Income from continuing operations, net of tax   1,803     1,359     2,956     2,274  
Loss from discontinued operations, net of tax           (5 )    
Net income   1,803     1,359     2,951     2,274  
Net income attributable to noncontrolling interests   35     38     79     65  
Net income available for DowDuPont Inc. common stockholders   $ 1,768     $ 1,321     $ 2,872     $ 2,209  
                 
Per common share data:
Earnings per common share from continuing operations - basic $ 0.76 $ 1.08 $ 1.24 $ 1.82
Loss per common share from discontinued operations - basic                
Earnings per common share - basic   $ 0.76     $ 1.08     $ 1.24     $ 1.82  
Earnings per common share from continuing operations - diluted $ 0.76 $ 1.07 $ 1.23 $ 1.79
Loss per common share from discontinued operations - diluted                
Earnings per common share - diluted   $ 0.76     $ 1.07     $ 1.23     $ 1.79  
                 
Dividends declared per share of common stock $ 0.76 $ 0.46 $ 1.14 $ 0.92
Weighted-average common shares outstanding - basic 2,308.9 1,211.8 2,312.9 1,207.2
Weighted-average common shares outstanding - diluted   2,323.6     1,229.0     2,329.0     1,225.5  
 
Note:   The consolidated statements of income for the three and six months
ended June 30, 2018, reflect the results of Dow and DuPont and the
consolidated statements of income for the three and six months ended
June 30, 2017, reflect the results of Dow.
 
 
DowDuPont Inc.
Consolidated Balance Sheets
         
 

Jun 30,

 

Dec 31,

In millions, except per share amounts (Unaudited)  

2018

 

2017

Assets        
Current Assets
Cash and cash equivalents (variable interest entities restricted -
2018: $116; 2017: $107)
$ 9,244 $ 13,438
Marketable securities 507 956
Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2018: $156; 2017:
$127)
15,379 11,314
Other 4,924 5,579
Inventories 15,630 16,992
Other current assets   2,213     1,614  
Total current assets   47,897     49,893  
Investments
Investment in nonconsolidated affiliates 5,214 5,336
Other investments (investments carried at fair value - 2018: $1,730;
2017: $1,512)
2,538 2,564
Noncurrent receivables   578     680  
Total investments   8,330     8,580  
Property
Property 73,664 73,304
Less accumulated depreciation   38,440     37,057  
Net property (variable interest entities restricted - 2018: $786;
2017: $907)
  35,224     36,247  
Other Assets
Goodwill 59,404 59,527
Other intangible assets (net of accumulated amortization - 2018:
$6,451; 2017: $5,550)
32,102 33,274
Deferred income tax assets 1,701 1,869
Deferred charges and other assets   2,709     2,774  
Total other assets   95,916     97,444  
Total Assets   $ 187,367     $ 192,164  
Liabilities and Equity        
Current Liabilities
Notes payable $ 2,794 $ 1,948
Long-term debt due within one year 4,606 2,067
Accounts payable:
Trade 7,983 9,134
Other 4,662 3,727
Income taxes payable 874 843
Accrued and other current liabilities   7,191     8,409  
Total current liabilities   28,110     26,128  
Long-Term Debt (variable interest entities nonrecourse - 2018: $147;
2017: $249)
  26,850     30,056  

Other Noncurrent Liabilities

Deferred income tax liabilities 5,885 6,266
Pension and other postretirement benefits - noncurrent 17,694 18,581
Asbestos-related liabilities - noncurrent 1,179 1,237
Other noncurrent obligations   7,767     7,969  
Total other noncurrent liabilities   32,525     34,053  
Stockholders' Equity
Common stock (authorized 5,000,000,000 shares of $0.01 par value
each;

issued 2018: 2,350,333,589 shares; 2017: 2,341,455,518 shares)

24 23
Additional paid-in capital 81,683 81,257
Retained earnings 30,432 29,211
Accumulated other comprehensive loss (10,732 ) (8,972 )
Unearned ESOP shares (145 ) (189 )
Treasury stock at cost (2018: 43,239,857 shares; 2017: 14,123,049
shares)
  (3,000 )   (1,000 )
DowDuPont's stockholders' equity   98,262     100,330  
Noncontrolling interests   1,620     1,597  
Total equity   99,882     101,927  
Total Liabilities and Equity   $ 187,367     $ 192,164  
 
 
DowDuPont Inc.
Pro Forma Consolidated Statements of Income
         
  Three Months Ended  

Six Months Ended

In millions, except per share amounts (Unaudited)

Jun 30,
2018

 

Jun 30,
2017

 

Jun 30,
2018

 

Jun 30,
2017

  As Reported   Pro Forma   As Reported   Pro Forma
Net sales   $ 24,245     $ 20,717     $ 45,755     $ 41,184  
Cost of sales 1 17,974   14,876   34,289   29,309
Research and development expenses 1 803 788 1,571 1,569
Selling, general and administrative expenses 1 1,933 1,770 3,647 3,580
Amortization of intangibles 488 435 962 863
Restructuring and asset related charges - net 189 148 451 299
Integration and separation costs 558 296 1,015 538
Equity in earnings of nonconsolidated affiliates 250 73 507 281
Sundry income (expense) - net 1 178 141 293 (206 )
Interest expense and amortization of debt discount   360     295     710     568  
Income from continuing operations before income taxes   2,368     2,323     3,910     4,533  
Provision for income taxes on continuing operations   565     440     954     721  
Income from continuing operations, net of tax   1,803     1,883     2,956     3,812  
Net income attributable to noncontrolling interests   35     48     79     85  
Net income from continuing operations available for DowDuPont Inc.
common stockholders
  $ 1,768     $ 1,835     $ 2,877     $ 3,727  
                 
Per common share data:
Earnings per common share from continuing operations - basic $ 0.76 $ 0.79 $ 1.24 $ 1.60
Earnings per common share from continuing operations - diluted   $ 0.76     $ 0.78     $ 1.23     $ 1.59  
                 
Weighted-average common shares outstanding - basic 2,308.9 2,325.0 2,312.9 2,320.4
Weighted-average common shares outstanding - diluted   2,323.6     2,347.7     2,329.0     2,344.4  
 
1.   Amounts shown in the pro forma consolidated statements of income for
the three and six months ended June 30, 2017, have been updated from
the Company's Current Report on Form 8-K dated October 26, 2017, to
reflect reclassifications required under Accounting Standards Update
2017-07, "Compensation - Retirement Benefits (Topic 715): Improving
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost," which was adopted on January 1, 2018
and required retrospective application.
 
DowDuPont Inc.
Net Sales by Segment and Geographic Region
         
Net Sales by Segment and Geographic Region   Three Months Ended   Six Months Ended
Jun 30, 2018   Jun 30, 2017   Jun 30, 2018   Jun 30, 2017
In millions (Unaudited)   As Reported   Pro Forma   As Reported   Pro Forma
Agriculture $ 5,730   $ 4,595   $ 9,538   $ 9,644
Performance Materials & Coatings 2,599 2,255 4,903 4,318
Industrial Intermediates & Infrastructure 3,885 3,013 7,600 5,860
Packaging & Specialty Plastics 6,099 5,428 12,109 10,810
Electronics & Imaging 1,203 1,221 2,356 2,385
Nutrition & Biosciences 1,775 1,494 3,495 2,918
Transportation & Advanced Polymers 1,468 1,284 2,893 2,535
Safety & Construction 1,411 1,329 2,710 2,542
Corporate   75     98     151     172
Total   $ 24,245     $ 20,717     $ 45,755     $ 41,184
U.S. & Canada $ 10,452 $ 8,898 $ 18,361 $ 17,613
EMEA 1 6,294 5,336 13,213 11,144
Asia Pacific 5,398 4,499 10,188 8,573
Latin America   2,101     1,984     3,993     3,854
Total   $ 24,245     $ 20,717     $ 45,755     $ 41,184
 
         
Pro Forma Net Sales Variance by Segment, Geographic Region and
Division
  Three Months Ended Jun 30, 2018   Six Months Ended Jun 30, 2018

Local
Price &
Product
Mix

  Currency   Volume  

Portfolio
/ Other 2

  Total  

Local
Price &
Product
Mix

  Currency   Volume  

Portfolio
/ Other 2

  Total
Percent change from prior year                    
Agriculture 4 % 1 % 20 % % 25 % 2 % 2 % (5 )% % (1 )%
Performance Materials & Coatings 10 3 2 15 10 4 14
Industrial Intermediates & Infrastructure 8 3 18 29 10 4 16 30
Packaging & Specialty Plastics 1 3 8 12 1 3 8 12
Electronics & Imaging 1 3 (5 ) (1 ) 2 2 (5 ) (1 )
Nutrition & Biosciences 1 3 4 11 19 1 4 4 11 20
Transportation & Advanced Polymers 5 3 6 14 5 4 5 14
Safety & Construction   1     2     3         6     1     3     3         7  
Total   4 %   2 %   10 %   1 %   17 %   3 %   3 %   4 %   1 %   11 %
U.S. & Canada 4 % % 13 % % 17 % 3 % % 1 % % 4 %
EMEA 1 4 7 6 1 18 4 10 4 1 19
Asia Pacific 3 2 15 20 3 3 13 19
Latin America   5     (1 )   1     1     6     5     (1 )   (1 )   1     4  
Total   4 %   2 %   10 %   1 %   17 %   3 %   3 %   4 %   1 %   11 %
Agriculture 4 % 1 % 20 % % 25 % 2 % 2 % (5 )% % (1 )%
Materials Science 5 3 10 18 5 4 8 17
Specialty Products   1     3     4     2     10     2     3     3     2     10  
Total   4 %   2 %   10 %   1 %   17 %   3 %   3 %   4 %   1 %   11 %
 
1.   Europe, Middle East and Africa.
2. Pro forma net sales for Agriculture excludes sales related to the
November 30, 2017, divestiture of a portion of Dow AgroSciences'
corn seed business in Brazil for the period January 1, 2017 through
June 30, 2017. Pro forma net sales for Packaging & Specialty
Plastics excludes sales related to the September 1, 2017,
divestiture of the global Ethylene Acrylic Acid ("EAA") copolymers
and ionomers business for the period January 1, 2017 through June
30, 2017. Portfolio & Other includes sales for the acquisition of
the H&N Business acquired on November 1, 2017, impacting Nutrition &
Biosciences. Portfolio & Other also reflects the following
divestitures: SKC Haas Display Films group of companies (divested
June 30, 2017) and the authentication business (divested on January
6, 2017), both impacting Electronics & Imaging; and, the divestiture
of the global food safety diagnostic business (divested February 28,
2017), impacting Nutrition & Biosciences.
 
DowDuPont Inc.
Selected Financial Information and Non-GAAP Measures
         
Operating EBITDA by Segment 1   Three Months Ended   Six Months Ended
Jun 30, 2018   Jun 30, 2017   Jun 30, 2018   Jun 30, 2017
In millions (Unaudited)   As Reported   Pro Forma   As Reported   Pro Forma
Agriculture $ 1,685   $ 1,165   $ 2,576   $ 2,626
Performance Materials & Coatings 569 540 1,197 1,021
Industrial Intermediates & Infrastructure 682 417 1,336 929
Packaging & Specialty Plastics 1,330 1,163 2,631 2,277
Electronics & Imaging 372 410 729 737
Nutrition & Biosciences 433 318 851 635
Transportation & Advanced Polymers 446 308 883 629
Safety & Construction 341 262 695 554
Corporate   (182 )   (190 )   (351 )   (401 )
Total   $ 5,676     $ 4,393     $ 10,547     $ 9,007  
                 
Equity in Earnings (Losses) of Nonconsolidated Affiliates by
Segment
2
Three Months Ended   Six Months Ended
Jun 30, 2018   Jun 30, 2017   Jun 30, 2018   Jun 30, 2017
In millions (Unaudited)   As Reported   Pro Forma   As Reported   Pro Forma
Agriculture $ 3 $ (1 ) $ 2 $ 3
Performance Materials & Coatings 36 41 77 132
Industrial Intermediates & Infrastructure 96 (13 ) 245 60
Packaging & Specialty Plastics 108 37 167 69
Electronics & Imaging 6 6 13 12
Nutrition & Biosciences 5 5 8 11
Transportation & Advanced Polymers 1 6 4 6
Safety & Construction 8 5 13 11
Corporate   (13 )   (13 )   (22 )   (23 )
Total   $ 250     $ 73     $ 507     $ 281  
                 
Reconciliation of "Income from continuing operations, net of tax"
to "Operating EBITDA"
Three Months Ended   Six Months Ended
Jun 30, 2018   Jun 30, 2017   Jun 30, 2018   Jun 30, 2017
In millions (Unaudited)   As Reported   Pro Forma   As Reported   Pro Forma
Income from continuing operations, net of tax $ 1,803 $ 1,883 $ 2,956 $ 3,812
+ Provision for income taxes on continuing operations   565     440     954     721  
Income from continuing operations before income taxes   $ 2,368     $ 2,323     $ 3,910     $ 4,533  
+ Depreciation and amortization 1,496 1,338 2,980 2,706
- Interest income 3 51 55 106 104
+ Interest expense and amortization of debt discount 360 295 710 568
- Foreign exchange gains (losses), net 3, 4 (57 ) (170 ) (155 ) (255 )
- Significant items 5   (1,446 )   (322 )   (2,898 )   (1,049 )
Operating EBITDA 1   $ 5,676     $ 4,393     $ 10,547     $ 9,007  
 
 
1. The Company uses Operating EBITDA (for the three and six months
ended June 30, 2018) and Pro Forma Operating EBITDA (for the three
and six months ended June 30, 2017), as its measure of profit/loss
for segment reporting. The Company defines Operating EBITDA as
earnings (i.e., "Income from continuing operations before income
taxes") before interest, depreciation, amortization and foreign
exchange gains (losses), excluding the impact of significant items.
Pro Forma Operating EBITDA is defined as pro forma earnings (i.e.,
pro forma "Income from continuing operations before income taxes")
before interest, depreciation, amortization and foreign exchange
gains (losses), excluding the impact of adjusted significant items.
2. Does not exclude the impact of significant items.
3. Included in "Sundry income (expense) - net."
4. Excludes a $50 million pretax foreign exchange loss significant item
related to adjustments to foreign currency exchange contracts for
the change in the U.S. tax rate during the six months ended June 30,
2018.
5. For the three and six months ended June 30, 2017, significant items
exclude the impact of one-time transaction costs directly
attributable to the Merger and reflected in the pro forma
adjustments.
 
 
DowDuPont Inc.
Selected Financial Information and Non-GAAP Measures
 
Significant Items Impacting Results for the Three Months Ended
Jun 30, 2018
In millions, except per share amounts (Unaudited)   Pretax 1   Net Income 2   EPS 3   Income Statement Classification
Reported results   $ 2,368   $ 1,768   $ 0.76  
Less: Significant items
Inventory step-up amortization (682 ) (548 ) (0.24 ) Cost of sales
Integration and separation costs (558 ) (447 ) (0.19 ) Integration and separation costs
Restructuring and asset related charges - net (189 ) (150 ) (0.06 ) Restructuring and asset related charges (credits) - net
Net loss on divestiture and change in joint venture ownership 4 (17 ) (17 ) (0.01 ) Sundry income (expense) - net
Income tax related items 5       (7 )       Provision for income taxes on continuing operations
Total significant items   $ (1,446 )   $ (1,169 )   $ (0.50 )    
Less: DuPont amortization of intangibles   (333 )   (263 )   (0.11 )   Amortization of intangibles
Adjusted results (non-GAAP)   $ 4,147     $ 3,200     $ 1.37      
 
 
Significant Items Impacting Pro Forma Results for the Three
Months Ended Jun 30, 2017
In millions, except per share amounts (Unaudited)   Pretax 1   Net Income 2   EPS 3   Income Statement Classification
Pro forma results   $ 2,323   $ 1,835   $ 0.78  
Less: Significant items
Litigation related charges, awards and judgments 6 137 80 0.03 Sundry income (expense) - net
Integration and separation costs (296 ) (200 ) (0.08 ) Integration and separation costs
Restructuring and asset related charges - net (148 ) (94 ) (0.04 ) Restructuring and asset related charges (credits) - net
Gain on divestiture 7 7 5 Sundry income (expense) - net
Transaction costs and productivity actions (22 ) (15 ) (0.01 ) Cost of sales ($18 million);

Selling, general and administrative

expenses ($4 million)

Income tax related items 8       (29 )   (0.01 )   Provision for income taxes on continuing operations
Total significant items   $ (322 )   $ (253 )   $ (0.11 )    
Less: DuPont amortization of intangibles   (278 )   (189 )   (0.08 )   Amortization of intangibles
Adjusted pro forma results (non-GAAP)   $ 2,923     $ 2,277     $ 0.97      
 
1.   "Income from continuing operations before income taxes" or pro forma
"Income from continuing operations before income taxes."
2. "Net income available for DowDuPont Inc. common stockholders"
excluding the impact of discontinued operations, or pro forma "Net
income from continuing operations available for DowDuPont Inc.
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" or
pro forma "Earnings per common share from continuing operations -
diluted."
4. Includes a pretax gain of $24 million on Agriculture asset sales and
a pretax loss of $41 million for post-closing adjustments related to
the Dow Silicones ownership restructure.
5. Related to effects of U.S. Tax Reform.
6. Pretax gain related to a Dow patent infringement matter with Nova
Chemicals Corporation.
7. Pretax gain related to post-closing adjustments on the 2015
split-off of Dow's chlorine value chain.
8. Related to the elimination of a DuPont tax benefit recorded in 2016
due to DuPont's second quarter 2017 principal U.S. pension plan
contribution.
 

DowDuPont Inc.

Selected Financial Information and Non-GAAP Measures

 
Significant Items Impacting Results for the Six Months Ended Jun
30, 2018
In millions, except per share amounts (Unaudited)   Pretax 1   Net Income 2   EPS 3   Income Statement Classification
Reported results   $ 3,910   $ 2,877   $ 1.23  
Less: Significant items
Inventory step-up amortization (1,385 ) (1,166 ) (0.50 ) Cost of sales
Integration and separation costs (1,015 ) (803 ) (0.34 ) Integration and separation costs
Restructuring and asset related charges - net (451 ) (355 ) (0.15 ) Restructuring and asset related charges (credits) - net
Net gain (loss) on divestitures and change in joint venture
ownership 4
3 (2 ) Sundry income (expense) - net
Income tax related items 5   (50 )   (116 )   (0.05 )   Sundry income (expense) - net ($50 million);

Provision for income taxes on continuing operations ($78 million)

Total significant items   $ (2,898 )   $ (2,442 )   $ (1.04 )    
Less: DuPont amortization of intangibles   (648 )   (512 )   (0.22 )   Amortization of intangibles
Adjusted results (non-GAAP)   $ 7,456     $ 5,831     $ 2.49      
 
 
Significant Items Impacting Pro Forma Results for the Six Months
Ended Jun 30, 2017
In millions, except per share amounts (Unaudited)   Pretax 1   Net Income 2   EPS 3   Income Statement Classification
Pro forma results   $ 4,533   $ 3,727   $ 1.59  
Less: Significant items
Litigation related charges, awards and judgments 6 (332 ) (215 ) (0.09 ) Sundry income (expense) - net
Integration and separation costs (538 ) (362 ) (0.15 ) Integration and separation costs
Restructuring and asset related charges - net (300 ) (194 ) (0.08 ) Restructuring and asset related charges (credits) - net
Gains on divestitures 7 169 91 0.04 Sundry income (expense) - net
Transaction costs and productivity actions (48 ) (31 ) (0.02 ) Cost of sales ($41 million);

Selling, general and administrative

expenses ($7 million)

Income tax related items 8       71     0.03     Provision for income taxes on continuing operations
Total significant items   $ (1,049 )   $ (640 )   $ (0.27 )    
Less: DuPont amortization of intangibles   (551 )   (375 )   (0.16 )   Amortization of intangibles
Adjusted pro forma results (non-GAAP)   $ 6,133     $ 4,742     $ 2.02      
 
 
1. "Income from continuing operations before income taxes" or pro forma
"Income from continuing operations before income taxes."
2. "Net income available for DowDuPont Inc. common stockholders"
excluding the impact of discontinued operations, or pro forma "Net
income from continuing operations available for DowDuPont Inc.
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" or
pro forma "Earnings per common share from continuing operations -
diluted."
4. Includes a $20 million pretax gain related to Dow's sale of its
equity interest in MEGlobal, a $24 million pretax gain on
Agriculture asset sales and a pretax loss of $41 million for
post-closing adjustments related to the Dow Silicones ownership
restructure.
5. Related to effects of U.S. Tax Reform. Impacts include a $50 million
pretax foreign exchange loss ($38 million after tax) related to
adjustments to foreign currency exchange contracts for the change in
the U.S. tax rate.
6. Reflects a pretax gain related to a Dow patent infringement matter
with Nova Chemicals Corporation ($137 million) and a pretax charge
for Dow AgroSciences' arbitration matter with Bayer CropScience
($469 million).
7. Reflects a pretax gain of $162 million related to the sale of
DuPont's global food safety diagnostics business and a pretax gain
of $7 million related to post-closing adjustments on the 2015
split-off of Dow's chlorine value chain.
8. Related to the elimination of a DuPont tax benefit recorded in 2016
due to DuPont's second quarter 2017 principal U.S. pension plan
contribution (expense of $29 million) and a reduction in DuPont's
unrecognized tax benefits and reversal of associated interest due to
the closure of various tax statutes of limitations (benefit of $100
million).

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