Delaware
|
81-1224539
|
State or other jurisdiction of incorporation or organization
|
(I.R.S. Employer Identification No.)
|
c/o The Dow Chemical Company
|
|
c/o E. I. du Pont de Nemours and Company
|
2030 Dow Center, Midland, MI 48674
|
|
974 Centre Road, Wilmington, DE 19805
|
(989) 636-1000
|
|
(302) 774-1000
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
|
þ
|
|
Accelerated filer
|
|
¨
|
|
Non-accelerated filer
|
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
PAGE
|
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|||
|
|
|
|
|
|
DowDuPont Inc. and Subsidiaries
|
*
|
Europe, Middle East and Africa.
|
|
Crop Application
|
|||||||||
Key Product Lines
|
Canola
|
Cereals
|
Corn
|
Cotton
|
Range and Pasture
|
Rice
|
Soybeans
|
Sunflower
|
Trees, Fruits and Vegetables
|
Others
|
Seeds
|
x
|
x
|
x
|
x
|
|
x
|
x
|
x
|
|
x
|
Insecticides
|
x
|
x
|
x
|
x
|
|
x
|
x
|
x
|
x
|
x
|
Fungicides
|
|
x
|
x
|
|
|
x
|
x
|
|
x
|
x
|
Herbicides
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
Other
|
x
|
|
x
|
x
|
|
|
|
|
|
|
Key Product Lines
|
Brands and Technologies
|
Seed Brands
|
AGROMEN™
1
; DOW™ Seeds; MYCOGEN™ Seeds; NEXERA™; Omega-9 Healthier Oils; OPTIMUM®AQUAMAX® hybrids; PHYTOGEN™; PIONEER® brand corn hybrids; Pioneer Premium Seed Treatment; PIONEER® brand T Series soybeans; PIONEER® brand soybeans with the PLENISH® high oleic trait; PIONEER® brand sunflowers with DUPONT™ EXPRESSSUN® trait; Pioneer PROTECTOR® resistance trait for canola and sunflower; Pioneer MAXIMUS® rapeseed hybrids; and PROPOUND™
|
Seed Traits and Technologies
|
ENCIRCA™ Services; ENLIST™; ENLIST DUO™; EXZACT™ Precision Technology; HERCULEX® Insect Protection; GRANULAR®; ACREVALUE™; LEPTRA® hybrids; POWERCORE™ Insect Trait Technology 2; OPTIMUM® ACREMAX™ Family of products; REFUGE ADVANCED™ powered by SMARTSTAX® 2; and SMARTSTAX® Insect Trait Technology
2
|
Insecticides
|
ISOCLAST™; LORSBAN™; OPTIMUM® INTRASECT® insect protection products RADIANT™; SENTRICON™; and TRACER™
|
Fungicides
|
DITHANE™; INATREQ™; Penthiopyrad family of disease control products - FONTELIS®, VERTISAN®, TREORIS®, FRELIZON®, AYLORA®, INTELLIS®, ORLIAN™, REFINZAR™; and ZORVEC®
|
Herbicides
|
ARIGO®; ARYLEX™; BROADWAY™; CLINCHER™; DURANGO™; FENCER™; GARLON™; INSTIGATE®; LONTREL™; MILESTONE™; PANZER™; PRIMUS™; RESICORE™; RINSKOR™; SPIDER™; STARANE™; SURESTART™; and TORDON™
|
Other
|
INSTINCT®; LUMIGEN™ Seed Sense family of seed treatment products - LUMIDERM™ and LUMIVIA™; N-SERVE™ Nitrogen Stabilizer; and TELONE™
|
1.
|
AGROMEN™ trademark used under license from Agromen Sementes Agricolas Ltda.
|
2.
|
SMARTSTAX® and POWERCORE
™
multi-event technology developed by Dow AgroSciences LLC and Monsanto Technology LLC. SMARTSTAX®
,
the SMARTSTAX® logo, POWERCORE
™
and the POWERCORE
™
logo are trademarks of Monsanto Technology LLC.
|
Business
|
Applications/Market Segments
|
Major Products/Technologies
|
Coatings & Performance Monomers
|
Acrylic binders for architectural paints and coatings, industrial coatings and paper; acrylic sheets; adhesives; coatings; dispersants; flocculants and detergents; impact modifiers; inks and paints; molding compounds; opacifiers and surfactants for both architectural and industrial applications; plastics additives; processing aids; protective and functional coatings; rheology modifiers; super absorbents; and textiles
|
ACOUSTICRYL™ liquid-applied sound damping technology; acrylates; ACRYSOL™ Rheology Modifiers; AVANSE™ acrylic binders; EVOQUE™ Pre-Composite Polymer; foam cell promoters; FORMASHIELD™ acrylic binder; high-quality impact modifiers; MAINCOTE™ acrylic epoxy hybrid; methacrylates; PARALOID™ Edge ISO-free technology; processing aids; RHOPLEX™ acrylic resin; TAMOL™ Dispersants; vinyl acetate monomers; and weatherable acrylic capstock compounds for
thermoplastic and thermosetting materials
|
Consumer Solutions
|
Personal care, color cosmetics, baby care, home care and specialty applications with a key focus on hair care, skin care, sun care, cleansing, as well as fabric, dish, floor, hard surface and air care applications; commercial glazing; electrical and high-voltage insulation; lamp and luminaire modules assembly; oil and gas; paints and inks; release liners, specialty films and tapes; sporting goods; and 3D printing
|
Adhesives and sealants; antifoams and surfactants; coatings and controlled release; coupling agents and crosslinkers; EVOLV3D™ printing technology; fluids, emulsions and dispersions; formulating and processing aids; granulation and binders; oils; polymers and emollients; opacifiers; reagents; resins, gels and powders; rheology modifiers; rubber; silicone elastomers; silicon-based materials; solubility enhancers; aerospace composites; surfactants and solvents; XIAMETER® silicones; and DOWSIL™ high-performance silicone-based building products
|
1.
|
Hydrogen peroxide to propylene oxide manufacturing technology is utilized by MTP HPPO Manufacturing Company Limited, a Thailand-based consolidated variable interest entity ultimately owned 50 percent by the Company and 50 percent by SCG Chemicals Co. Ltd.; and BASF DOW HPPO Production B.V.B.A., a Belgium-based joint venture ultimately owned 100 percent by HPPO Holding & Finance C.V., which is owned 50 percent by the Company and 50 percent by BASF.
|
•
|
EQUATE Petrochemical Company K.S.C. ("EQUATE") - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned 42.5 percent by the Company.
|
•
|
The Kuwait Olefins Company K.S.C. ("TKOC") - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned 42.5 percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited - effective ownership is 32.77 percent of which the Company directly owns 20.27 percent (aligned with Industrial Intermediates & Infrastructure) and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited (both part of The SCG-Dow Group and aligned with Packaging & Specialty Plastics). This Thailand-based company manufactures propylene and ethylene.
|
•
|
Sadara Chemical Company ("Sadara") - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned 35 percent by the Company.
|
Business
|
Applications/Market Segments
|
Major Products
|
Hydrocarbons & Energy
|
Purchaser of feedstocks; production of cost competitive hydrocarbon monomers utilized by derivative businesses; and energy, principally for use in the Company's global operations
|
Ethylene, propylene, benzene, butadiene, octene, aromatics co-products, power, steam, other utilities
Advantaged feedstock positions in the United States, Canada, Argentina and the Middle East
|
Packaging and Specialty Plastics
|
Adhesives, construction, cosmetics, electrical transmission and distribution, food and supply chain packaging, footwear, housewares, health and hygiene, industrial specialties, irrigation pipe, photovoltaic, sporting goods, telecommunications infrastructure, and toys and infant products
|
Acrylics, bio-based plasticizers, elastomers, ethylene copolymer resins, ethylene propylene diene monomer elastomers ("EPDMs"), ethylene vinyl acetate copolymer, methacrylic acid copolymer resins, polyethylene, high-density polyethylene, low-density polyethylene, linear low-density polyethylene, polyolefin plastomers, resin additives and modifiers, semiconductive and jacketing compound solutions and wire and cable insulation
|
•
|
The Kuwait Styrene Company K.S.C. - a Kuwait-based company that manufactures styrene monomer; owned 42.5 percent by the Company.
|
•
|
The SCG-Dow Group consists of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Co., Ltd.; and Siam Synthetic Latex Company Limited. These Thailand-based companies manufacture polyethylene, polystyrene, styrene and latex; owned 50 percent by the Company.
|
•
|
EQUATE - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol; and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned 42.5 percent by the Company.
|
•
|
TKOC - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned 42.5 percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited - effective ownership is 32.77 percent of which the Company directly owns 20.27 percent (aligned with Industrial Intermediates & Infrastructure) and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited (both part of The SCG-Dow Group and aligned with Packaging & Specialty Plastics). This Thailand-based company manufactures propylene and ethylene.
|
•
|
Sadara - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned 35 percent by the Company.
|
Major Product Line
|
Applications/Market Segments
|
Technologies
|
Semiconductor Technologies
|
Integrated circuit fabrication for memory and logic and semiconductor fabrication
|
CMP consumables, photolithography materials, semiconductor fabrication materials, fabrication cleaners and removers, advanced chip packaging materials and thermal management materials
|
Circuit & Industrial Technologies
|
Printed circuit board, electronic and industrial finishing
|
Circuit packaging materials, Interconnect metallization and imaging process chemistries, dry film laminates, and flexible circuit materials
|
Photovoltaic and Advanced Materials
|
Photovoltaics, aerospace/aircraft, automotive, military and consumer electronics
|
Metallization pastes, thick film pastes, polyvinyl fluoromaterials, silicone encapsulants and silane precursors
|
Advanced Printing
|
Flexographic printing and inkjet printing
|
Flexographic printing plates and materials and digital inks
|
Display Technologies
|
Display materials
|
OLED materials, Cd-free quantum dots, diplay process chemistries, LED encapsulants and display enhancement solutions
|
Business
|
Applications
|
Major Products
|
Industrial Biosciences
|
Animal nutrition, detergents, biofuels production, food and beverage, carpet and apparel fiber, sulfuric acid, oil refining, phosphate fertilizer and providing expertise and localized solutions for microbial control for well souring, industrial cooling water, fabric odor elimination and in-can preservation and dry film protection
|
Enzymes, BIO-PDO™ propanediol, SORONA® PTT polymer, yeast, betaine, direct-fed microbials, MECS® sulfuric acid technology, BELCO® clean air technologies, STRATCO® alkylation technology, ISOTHERMING® hydroprocessing, SILVADUR™ antimicrobial, glutaraldehyde
|
Nutrition & Health
|
Food and beverage, dietary supplements, child nutrition, sports nutrition and oral dosage pharmaceuticals excipients
|
Cellulosic and other technologies help bring new classes of medicines to market and enable foods that are healthier (gluten-free, reduced oil/fat content). Notable technologies include excipients and active pharmaceutical ingredients, solubility enhancers, reagents, granulation and binders, as well as coatings and controlled release.
Other major products include probiotics, soy protein, fibers, cultures, antioxidants, antimicrobials, emulsifiers, texturants, ingredient systems and sweeteners.
|
Major Product Line
|
Major Products
|
Performance Resins
|
HYTREL® polyester thermoplastic elastomer resins, DELRIN® acetal resins, VAMAC® ethylene acrylic elastomer, and MULTIBASE™ TPSiV™ silicones for thermoplastics
|
Nylon & Polyesters
|
DUPONT™ ZYTEL® nylon resins, CRASTIN® PBT thermoplastic polyester resin, RYNITE® PET polyester resin and TYNEX® filaments
|
Performance Solutions
|
KALREZ® perfluoroelastomer, VESPEL® parts and shapes, MOLYKOTE® lubricants, DOW CORNING® silicone solutions for healthcare, BETASEAL™, BETAMATE™ and BETAFORCE™ structural and elastic adhesives
|
Major Product Line
|
Applications / Market Segments
|
Major Products / Technologies
|
Protection Solutions
|
Industrial personnel protection, military and emergency response, medical devices, automotive, aerospace, oil and gas and solid surfaces
|
DUPONT™ KEVLAR® fiber; DUPONT™ NOMEX® fiber and paper; DUPONT™ TYVEK® protective materials; DUPONT™ TYCHEM® protective suits; DUPONT™ CORIAN® solid and quartz surfaces
|
Building Solutions
|
Rigid and spray foam insulation, weatherization, waterproofing and air sealing, caulks and sealants and roof coatings
|
DUPONT™ TYVEK® weatherization products, STYROFOAM™ brand insulation products, THERMAX™ exterior insulation, WALOCEL™ cellulose ethers, WEATHERMATE™ house wrap, XENERGY™ high performance insulation, LIQUIDARMOR™ flashing and sealant, GREAT STUFF™ insulating foam sealants and adhesives
|
Water Solutions
|
Water filtration and purification technology for residential and industrial use. Key industries include municipal, power, electronics, pharmaceuticals, food and beverage, mining and oil and gas applications
|
DOWEX™ and AMBERLITE™ ion exchange resins, DOW FILMTEC™ reverse osmosis and nanofiltration elements, INTEGRAFLUX™ ultrafiltration modules and FORTILIFE™ challenging water reverse osmosis membranes
|
Patents Owned at Dec 31, 2017
|
United States
|
Foreign
|
||
Dow
|
6,100
|
|
29,100
|
|
DuPont
|
6,500
|
|
9,900
|
|
Total
|
12,600
|
|
39,000
|
|
Principal Nonconsolidated Affiliate
|
Ownership Interest
|
Business Description
|
|
EQUATE Petrochemical Company K.S.C.
|
42.50
|
%
|
A Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins
|
The HSC Group:
|
|
|
|
DC HSC Holdings LLC
1
|
50.00
|
%
|
A U.S.-based group of companies that manufactures polycrystalline silicon products
|
Hemlock Semiconductor L.L.C.
|
50.10
|
%
|
A U.S. company that sells polycrystalline silicon products
|
The Kuwait Olefins Company K.S.C.
|
42.50
|
%
|
A Kuwait-based company that manufactures ethylene and ethylene glycol
|
The Kuwait Styrene Company K.S.C.
|
42.50
|
%
|
A Kuwait-based company that manufactures styrene monomer
|
Map Ta Phut Olefins Company Limited
2
|
32.77
|
%
|
A Thailand-based company that manufactures propylene and ethylene
|
Sadara Chemical Company
3
|
35.00
|
%
|
A Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates
|
The SCG-Dow Group:
|
|
|
|
Siam Polyethylene Company Limited
|
50.00
|
%
|
A Thailand-based company that manufactures polyethylene
|
Siam Polystyrene Company Limited
|
50.00
|
%
|
A Thailand-based company that manufactures polystyrene
|
Siam Styrene Monomer Co., Ltd.
|
50.00
|
%
|
A Thailand-based company that manufactures styrene
|
Siam Synthetic Latex Company Limited
|
50.00
|
%
|
A Thailand-based company that manufactures latex
|
1.
|
DC HSC Holdings LLC holds an 80.5 percent indirect ownership interest in Hemlock Semiconductor Operations LLC.
|
2.
|
Dow's effective ownership of Map Ta Phut Olefins Company Limited is 32.77 percent, of which Dow directly owns 20.27 percent and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited.
|
3.
|
Dow is responsible for marketing the majority of Sadara products outside of the Middle East zone through Dow's established sales channels. Under this arrangement, Dow purchases and sells Sadara products for a marketing fee.
|
Name - Age
|
Present Position with Registrant
|
Year Elected to be an Officer
|
Other Business Experience since January 1, 2013
|
Edward D. Breen, 61
|
Chief Executive Officer
|
2017
|
DuPont: Board of Directors February 2015 to date; Interim Chair of the Board and CEO October 2015 to date; Immediately prior to joining DuPont, member of Comcast Corporation: Board of Directors February 2014 to date; New Mountain Capital LLC: Advisory Board Member.
|
James C. Collins, Jr., 55
|
Chief Operating Officer for the Agriculture Division
|
2017
|
DuPont: Executive Vice President Agriculture business January 2016 to date; Executive Vice President Electronics & Communications, Industrial Biosciences and Performance Materials businesses December 2014 to January 2016; Senior Vice President Performance Materials and Industrial Biosciences September 2013 to December 2014; President Industrial Biosciences and Vice President Acquisitions January 2011 to September 2013.
|
Jeanmarie F. Desmond, 51
|
Co-Controller
|
2017
|
DuPont: Vice President & Controller August 2015 to date; General Auditor and Chief Ethics & Compliance Leader September 2014 to July 2015; Director, Corporate Accounting and Reporting 2013 to 2014.
|
C. Marc Doyle, 48
|
Chief Operating Officer for the Specialty Products Division
|
2017
|
DuPont: Executive Vice President Electronics & Communications, Protection Solutions, Sustainable Solutions, Industrial Biosciences, Nutrition & Health, and Performance Materials businesses January 2016 to date; Senior Vice President Safety & Protection businesses July 2015 to December 2015; President of DuPont Protection Technologies June 2013 to June 2015.
|
Ronald C. Edmonds, 60
|
Co-Controller
|
2017
|
Dow: Controller and Vice President of Controllers and Tax February 2016 to date; Vice President and Controller 2009 to 2016.
|
James R. Fitterling, 56
|
Chief Operating Officer for the Materials Science Division
|
2017
|
Dow: President and Chief Operating Officer February 2016 to date; Vice Chairman and Chief Operating Officer October 2015 to February 2016; Vice Chairman, Business Operations October 2014 to October 2015; Executive Vice President, Feedstocks, Performance Plastics and Supply Chain December 2013 to October 2014; Executive Vice President, Feedstocks, Performance Plastics, Asia and Latin America September 2012 to December 2013.
|
Stacy L. Fox, 64
|
General Counsel and Corporate Secretary
|
2017
|
DuPont: Senior Vice President and General Counsel October 2014 to date; Corporate Communications January 2016 to date; City of Detroit: Deputy Emergency Manager October 2013 to September 2014; Roxbury Group LLC: Principal March 2005 to date.
|
Charles J. Kalil, 66
|
Special Counsellor to the Executive Chairman, General Counsel for the Materials Science Division
|
2017
|
Dow: General Counsel 2004 to date; Executive Vice President 2008 to date; Corporate Secretary 2005 to February 2015.
|
Andrew N. Liveris, 63
|
Executive Chairman
|
2017
|
Dow: Chief Executive Officer 2004 to date; Chairman 2006 to date; President 2004 to February 2016.
|
Howard I. Ungerleider, 49
|
Chief Financial Officer
|
2017
|
Dow: Vice Chairman and Chief Financial Officer October 2015 to date; Chief Financial Officer and Executive Vice President October 2014 to October 2015; Executive Vice President, Advanced Materials September 2012 to October 2014.
|
•
|
ongoing diversion of the attention of management from the operation of the combined Company’s business as a result of the Intended Business Separations;
|
•
|
impact of portfolio changes between materials science and specialty products on integration and separation preparation activities;
|
•
|
difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects;
|
•
|
the possibility of faulty assumptions underlying expectations regarding the integration or separation process, including with respect to the intended tax efficient transactions;
|
•
|
unanticipated issues in integrating, replicating or separating information technology, communications programs, financial procedures and operations, and other systems, procedures and policies;
|
•
|
difficulties in managing a larger combined company, addressing differences in business culture and retaining key personnel;
|
•
|
unanticipated changes in applicable laws and regulations;
|
•
|
managing tax costs or inefficiencies associated with integrating the operations of the combined Company and the intended tax efficient separation transactions; and
|
•
|
coordinating geographically separate organizations.
|
•
|
difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
|
•
|
unexpected changes in political or regulatory environments;
|
•
|
labor compliance and costs associated with a global workforce;
|
•
|
earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs;
|
•
|
exchange controls or other restrictions;
|
•
|
restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States;
|
•
|
political and economic instability;
|
•
|
import and export restrictions and other trade barriers;
|
•
|
difficulties in maintaining overseas subsidiaries and international operations;
|
•
|
difficulties in obtaining approval for significant transactions;
|
•
|
government limitations on foreign ownership;
|
•
|
government takeover or nationalization of business;
|
•
|
government mandated price controls; and
|
•
|
fluctuations in foreign currency exchange rates.
|
Number of Manufacturing Sites at Dec 31, 2017
|
||||||||||||||||||
Geographic Region
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Total
1
|
|||||||||
U.S. & Canada
|
74
|
|
22
|
|
13
|
|
16
|
|
17
|
|
32
|
|
16
|
|
14
|
|
204
|
|
EMEA
|
31
|
|
16
|
|
18
|
|
8
|
|
5
|
|
47
|
|
8
|
|
13
|
|
146
|
|
Asia Pacific
|
23
|
|
20
|
|
8
|
|
5
|
|
17
|
|
18
|
|
13
|
|
13
|
|
117
|
|
Latin America
|
29
|
|
8
|
|
6
|
|
4
|
|
1
|
|
14
|
|
2
|
|
3
|
|
67
|
|
Total
|
157
|
|
66
|
|
45
|
|
33
|
|
40
|
|
111
|
|
39
|
|
43
|
|
534
|
|
1.
|
Sites that are used by multiple segments are included more than once in the figures above.
|
Issuer Purchases of Equity Securities
|
Average price paid per share
|
Total number of shares purchased as part of the Company's publicly announced share repurchase
program
1
|
Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program
1
(In millions)
|
|||||||
Period
|
Total number of shares purchased
|
|||||||||
October 2017
|
—
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
November 2017
|
7,518,052
|
|
$
|
70.29
|
|
7,518,052
|
|
$
|
3,472
|
|
December 2017
|
6,604,997
|
|
$
|
71.40
|
|
6,604,997
|
|
$
|
3,000
|
|
Fourth quarter 2017
|
14,123,049
|
|
$
|
70.81
|
|
14,123,049
|
|
$
|
3,000
|
|
1.
|
On November 2, 2017, the Company announced the DowDuPont Board of Directors authorized an initial $4 billion share repurchase program, which has no expiration date.
|
Selected Financial Data
|
|
|
|
|
|
||||||||||
In millions, except as noted (Unaudited)
|
2017
1
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Summary of Operations
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
62,484
|
|
$
|
48,158
|
|
$
|
48,778
|
|
$
|
58,167
|
|
$
|
57,080
|
|
Income from continuing operations, net of tax
2
|
$
|
1,669
|
|
$
|
4,404
|
|
$
|
7,783
|
|
$
|
3,839
|
|
$
|
4,816
|
|
Loss from discontinued operations, net of tax
|
$
|
(77
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Per share of common stock (in dollars):
|
|
|
|
|
|
||||||||||
Earnings per common share from continuing operations - basic
2
|
$
|
0.97
|
|
$
|
3.57
|
|
$
|
6.45
|
|
$
|
2.91
|
|
$
|
3.72
|
|
Earnings per common share from continuing operations - diluted
2
|
$
|
0.95
|
|
$
|
3.52
|
|
$
|
6.15
|
|
$
|
2.87
|
|
$
|
3.68
|
|
Loss per common share from discontinued operations - basic
|
$
|
(0.05
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Loss per common share from discontinued operations - diluted
|
$
|
(0.04
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Cash dividends declared per share of common stock
|
$
|
1.76
|
|
$
|
1.84
|
|
$
|
1.72
|
|
$
|
1.53
|
|
$
|
1.28
|
|
Book value per share of common stock
|
$
|
43.30
|
|
$
|
21.70
|
|
$
|
23.06
|
|
$
|
19.71
|
|
$
|
22.59
|
|
Year-end Financial Position
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
192,164
|
|
$
|
79,511
|
|
$
|
67,938
|
|
$
|
68,639
|
|
$
|
69,380
|
|
Long-term debt
|
$
|
30,056
|
|
$
|
20,456
|
|
$
|
16,215
|
|
$
|
18,741
|
|
$
|
16,732
|
|
|
|
|
|
|
|
||||||||||
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|||||
Research and development expenses as percent of net sales
|
3.4
|
%
|
3.3
|
%
|
3.3
|
%
|
2.8
|
%
|
3.1
|
%
|
|||||
Income from continuing operations before income taxes as percent of net sales
2
|
1.9
|
%
|
9.2
|
%
|
20.4
|
%
|
9.1
|
%
|
11.9
|
%
|
|||||
Return on stockholders' equity
2
|
1.5
|
%
|
15.3
|
%
|
34.4
|
%
|
18.6
|
%
|
19.4
|
%
|
|||||
Debt as a percent of total capitalization
|
25.1
|
%
|
44.0
|
%
|
39.7
|
%
|
45.5
|
%
|
38.9
|
%
|
1.
|
The year ended December 31, 2017, reflects the results of Dow for the entire year and the results of DuPont for the period beginning on and after September 1, 2017. The historical periods solely reflect the results of Dow.
|
2.
|
See Notes
1
,
3
,
5
,
7
,
8
,
13
,
16
and
19
to the Consolidated Financial Statements for additional information on items materially impacting the results for the years ended December 31, 2017, 2016 and 2015, including the effects of the U.S. Tax Cuts and Jobs Act, enacted on December 22, 2017; Merger-related amortization of the fair value step-up of inventories; gains on divestitures; charges related to restructuring programs; goodwill impairment and other asset related charges; a charge related to payment of plan obligations to certain participants of a Dow U.S. non-qualified pension plan; and, the impact of a change in accounting policy for asbestos-related defense and processing costs. Results for the year ended December 31, 2013, reflect a $1.6 billion after-tax gain related to the K‑Dow arbitration matter.
|
Table of Contents
|
Page
|
•
|
The Company reported net sales for 2017 of $62.5 billion, up 30 percent from $48.2 billion in 2016, reflecting broad-based sales growth with increases across all segments and geographic regions. Portfolio actions contributed to 19 percent of the sales increase, including 15 percent from the Merger, impacting all segments except Industrial Intermediates & Infrastructure.
|
•
|
Local price was up 6 percent compared with last year, driven primarily by broad-based pricing actions as well as higher feedstock and raw material costs. Local price was mixed by segment as gains in Industrial Intermediates & Infrastructure (up 10 percent) and Performance Materials & Coatings and Packaging & Specialty Plastics (both up 8 percent) more than offset declines in Agriculture and Electronics & Imaging (both down 1 percent). Local price remained flat in Nutrition & Biosciences, Transportation & Advanced Polymers and Safety & Construction. Local price increased in all geographic regions, including a double-digit increase in EMEA (up 10 percent). Currency remained flat with the same period last year.
|
•
|
Volume increased 5 percent compared with the same period last year, with increases in all segments except Agriculture, which declined 2 percent. Volume increased in all geographic regions, except Latin America (down 1 percent).
|
•
|
Research and development ("R&D") expenses totaled $2,110 million in 2017, up 33 percent from $1,584 million in 2016, primarily due to the Merger.
|
•
|
Selling, general and administrative ("SG&A") expenses were $4,021 million in 2017, up 36 percent from $2,956 million in 2016, primarily due to the Merger.
|
•
|
Restructuring, goodwill impairment and asset related charges - net was $3,280 in 2017, reflecting post-merger restructuring actions under the DowDuPont Cost Synergy Program which is designed to integrate and optimize the organization following the Merger and in preparation for the Intended Business Separations; a goodwill impairment charge of
$1,491 million
related to the Coatings & Performance Monomers reporting unit and $939 million of pretax impairment charges related to a manufacturing facility in Brazil, other manufacturing assets, surplus facilities and an equity method investment.
|
•
|
Integration and separation costs were $1,101 million in 2017, up from $349 million in 2016. Integration and separation costs include costs related to the Merger, post-Merger integration and Intended Business Separation activities and costs related to the ownership restructure of Dow Corning.
|
•
|
In the fourth quarter of 2017, the Company recorded a net tax benefit of $1,086 million related to the recognition of the effects of new U.S. tax legislation.
|
•
|
On November 2, 2017, DowDuPont announced its Board of Directors declared a fourth quarter dividend of $0.38 per share, which was paid on December 15, 2017, and authorized an initial $4.0 billion share repurchase program. At December 31, 2017, $3.0 billion of the authorization remained available for repurchases. Although there is no timeline to complete the share repurchase program, DowDuPont intends to repurchase approximately $1.0 billion of the Company's stock in the first quarter of 2018.
|
•
|
On February 1, 2018, the Company announced it has updated the timing and sequence of the Intended Business Separations: materials science is expected to separate by the end of the first quarter of 2019, and agriculture and specialty products are expected to separate by June 1, 2019.
|
•
|
On February 1, 2018, the Company announced it is increasing its cost synergy commitment from $3 billion to $3.3 billion.
|
Summary of Sales Results
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
62,484
|
|
$
|
48,158
|
|
$
|
48,778
|
|
Pro forma net sales
|
$
|
79,535
|
|
$
|
70,894
|
|
|
|
1.
|
Portfolio & Other reflects sales related to the Merger (impacts all segments, except Performance Materials & Coatings and Industrial Intermediates & Infrastructure), the acquisition of FMC's Health and Nutrition Business (the "H&N Business"), acquired on November 1, 2017 (impacting Nutrition & Biosciences) and the ownership restructure of Dow Corning announced on June 1, 2016 (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers). Portfolio & Other also reflects the following divestitures: a portion of Dow AgroSciences' Brazil corn seed business ("DAS Divested Ag Business"), divested on November 30, 2017 (impacting Agriculture), global Ethylene Acrylic Acid copolymers and ionomers business ("EAA Business"), divested on September 1, 2017 (impacting Packaging & Specialty Plastics) and SKC Haas Display Films group of companies, divested June 30, 2017 (impacting Electronics & Imaging).
|
2.
|
Portfolio & Other reflects sales related to the ownership restructure of Dow Corning and sales from January 1, 2016 through April 30, 2016 for the step acquisition of Univation, acquired on May 5, 2015 (Packaging & Specialty Plastics). Portfolio & Other also reflects the following divestitures: the chlorine value chain, divested on October 5, 2015 (Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics), ANGUS Chemical Company, divested on February 2, 2015 and the global Sodium Borohydride business, divested on January 30, 2015 (both included in Industrial Intermediates & Infrastructure).
|
Sales Variances by Segment and Geographic Region - As Reported
|
|
|
|
|
|
|||||
|
2015
|
|||||||||
Percentage change from prior year
|
Local Price & Product Mix
|
Currency
|
Volume
|
Portfolio & Other
1
|
Total
|
|||||
Agriculture
|
(5
|
)%
|
(4
|
)%
|
(2
|
)%
|
—
|
%
|
(11
|
)%
|
Performance Materials & Coatings
|
(14
|
)
|
(5
|
)
|
3
|
|
—
|
|
(16
|
)
|
Industrial Intermediates & Infrastructure
|
(10
|
)
|
(5
|
)
|
2
|
|
(6
|
)
|
(19
|
)
|
Packaging & Specialty Plastics
|
(18
|
)
|
(5
|
)
|
5
|
|
—
|
|
(18
|
)
|
Electronics & Imaging
|
(2
|
)
|
(2
|
)
|
(1
|
)
|
—
|
|
(5
|
)
|
Nutrition & Biosciences
|
(1
|
)
|
(5
|
)
|
(4
|
)
|
—
|
|
(10
|
)
|
Transportation & Advanced Polymers
|
—
|
|
(7
|
)
|
5
|
|
—
|
|
(2
|
)
|
Safety & Construction
|
—
|
|
(5
|
)
|
2
|
|
—
|
|
(3
|
)
|
Total
|
(12
|
)%
|
(5
|
)%
|
2
|
%
|
(1
|
)%
|
(16
|
)%
|
U.S. & Canada
|
(13
|
)%
|
(1
|
)%
|
2
|
%
|
(2
|
)%
|
(14
|
)%
|
EMEA
|
(10
|
)
|
(13
|
)
|
2
|
|
(2
|
)
|
(23
|
)
|
Asia Pacific
|
(9
|
)
|
(3
|
)
|
5
|
|
(2
|
)
|
(9
|
)
|
Latin America
|
(15
|
)
|
—
|
|
1
|
|
(1
|
)
|
(15
|
)
|
Total
|
(12
|
)%
|
(5
|
)%
|
2
|
%
|
(1
|
)%
|
(16
|
)%
|
1.
|
Portfolio & Other reflects sales related to the step acquisition of Univation (Packaging & Specialty Plastics) and Cooperativa Central de Pesquisa Agrícola's, acquired on February 1, 2015 (Agriculture). Portfolio & Other also reflects the following divestitures: the chlorine value chain (Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics), ANGUS Chemical Company and the global Sodium Borohydride business (both included in Industrial Intermediates & Infrastructure).
|
1.
|
Pro forma net sales for Agriculture excludes sales related to the November 30, 2017, DAS Divested Ag Business for the period January 1, 2016 through August 31, 2017; sales from September 1, 2017 through November 30, 2017, are included in Portfolio & Other. Pro forma net sales also excludes sales related to the September 1, 2017, divestiture of the EAA Business for the period January 1, 2016 through August 31, 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 sales from January 1, 2017 through May 31, 2017, related to the ownership restructure of Dow Corning on June 1, 2016 (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers); the divestitures of 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.
|
Unaudited Pro Forma Combined Statements of Income
|
Year Ended
|
|||||
In millions, except per share amounts
|
Dec 31, 2017
|
Dec 31, 2016
|
||||
Net sales
|
$
|
79,535
|
|
$
|
70,894
|
|
Cost of sales
|
60,960
|
|
51,996
|
|
||
Research and development expenses
|
3,157
|
|
3,061
|
|
||
Selling, general and administrative expenses
|
6,776
|
|
6,701
|
|
||
Amortization of intangibles
|
1,743
|
|
1,624
|
|
||
Restructuring, goodwill impairment and asset related charges - net
|
3,593
|
|
1,151
|
|
||
Integration and separation costs
|
1,499
|
|
476
|
|
||
Asbestos-related charge
|
—
|
|
1,113
|
|
||
Equity in earnings of nonconsolidated affiliates
|
804
|
|
516
|
|
||
Sundry income (expense) - net
|
955
|
|
1,903
|
|
||
Interest expense and amortization of debt discount
|
1,256
|
|
1,108
|
|
||
Income from continuing operations before income taxes
|
2,310
|
|
6,083
|
|
||
Provision (Credit) for income taxes on continuing operations
|
(602
|
)
|
288
|
|
||
Income from continuing operations, net of tax
|
2,912
|
|
5,795
|
|
||
Net income attributable to noncontrolling interests
|
159
|
|
108
|
|
||
Net income from continuing operations attributable to DowDuPont Inc.
|
2,753
|
|
5,687
|
|
||
Preferred stock dividends
|
—
|
|
340
|
|
||
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
2,753
|
|
$
|
5,347
|
|
|
|
|
||||
Per common share data:
|
|
|
||||
Earnings per common share from continuing operations - basic
|
$
|
1.18
|
|
$
|
2.40
|
|
Earnings per common share from continuing operations - diluted
|
$
|
1.17
|
|
$
|
2.37
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
2,323.9
|
|
2,221.3
|
|
||
Weighted-average common shares outstanding - diluted
|
2,346.1
|
|
2,242.1
|
|
Unaudited Pro Forma Combined
Statement of Income
|
Year Ended Dec 31, 2017
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
DWDP
1
|
Historical DuPont
2
|
Reclass
3
|
Divestitures
4
|
Pro Forma
5
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
62,484
|
|
$
|
18,349
|
|
$
|
84
|
|
$
|
(1,219
|
)
|
$
|
(163
|
)
|
$
|
79,535
|
|
Cost of sales
|
50,414
|
|
10,617
|
|
387
|
|
(523
|
)
|
65
|
|
60,960
|
|
||||||
Other operating charges
|
—
|
|
521
|
|
(521
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
2,110
|
|
1,159
|
|
(27
|
)
|
(104
|
)
|
19
|
|
3,157
|
|
||||||
Selling, general and administrative expenses
|
4,021
|
|
3,452
|
|
(583
|
)
|
(143
|
)
|
29
|
|
6,776
|
|
||||||
Other (loss) income, net
|
—
|
|
173
|
|
(173
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
1,013
|
|
—
|
|
139
|
|
—
|
|
591
|
|
1,743
|
|
||||||
Restructuring, goodwill impairment and asset related charges - net
|
3,280
|
|
323
|
|
—
|
|
—
|
|
(10
|
)
|
3,593
|
|
||||||
Integration and separation costs
|
1,101
|
|
—
|
|
605
|
|
(24
|
)
|
(183
|
)
|
1,499
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
764
|
|
—
|
|
55
|
|
—
|
|
(15
|
)
|
804
|
|
||||||
Sundry income (expense) - net
|
966
|
|
—
|
|
1
|
|
(12
|
)
|
—
|
|
955
|
|
||||||
Interest expense and amortization of debt discount
|
1,082
|
|
254
|
|
—
|
|
—
|
|
(80
|
)
|
1,256
|
|
||||||
Income from continuing operations before income taxes
|
1,193
|
|
2,196
|
|
(33
|
)
|
(437
|
)
|
(609
|
)
|
2,310
|
|
||||||
Provision (Credit) for income taxes on continuing operations
|
(476
|
)
|
228
|
|
(33
|
)
|
(88
|
)
|
(233
|
)
|
(602
|
)
|
||||||
Income from continuing operations, net of tax
|
1,669
|
|
1,968
|
|
—
|
|
(349
|
)
|
(376
|
)
|
2,912
|
|
||||||
Net income attributable to noncontrolling interests
|
132
|
|
20
|
|
—
|
|
—
|
|
7
|
|
159
|
|
||||||
Net income from continuing operations attributable to DowDuPont Inc.
|
1,537
|
|
1,948
|
|
—
|
|
(349
|
)
|
(383
|
)
|
2,753
|
|
||||||
Preferred stock dividends
|
—
|
|
7
|
|
—
|
|
—
|
|
(7
|
)
|
—
|
|
||||||
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
1,537
|
|
$
|
1,941
|
|
$
|
—
|
|
$
|
(349
|
)
|
$
|
(376
|
)
|
$
|
2,753
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
1.18
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
1.17
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,323.9
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,346.1
|
|
1.
|
See the U.S. GAAP consolidated statements of income.
|
2.
|
Reflects DuPont activity for the period from January 1, 2017 to August 31, 2017.
|
3.
|
Certain reclassifications were made to conform with the presentation used for DowDuPont.
|
4.
|
Includes the following divestitures agreed to with certain regulatory agencies as a condition of approval for the Merger: Dow’s EAA Business (for the period of January 1, 2017 through the September 1, 2017 divestiture); the DAS Divested Ag Business (for the period of January 1, 2017 through August 31, 2017); and DuPont’s cereal broadleaf herbicides and chewing insecticides portfolio as well as its crop protection research and development pipeline and organization (for the period of January 1, 2017 through August 31, 2017; activity from September 1, 2017 through the November 1, 2017 divestiture was treated as discontinued operations).
|
5.
|
Certain pro forma adjustments were made to illustrate the estimated effects of the Merger, assuming that the Merger had been consummated on January 1, 2016. Refer to
Summary of Pro Forma Adjustments
at the end of this section for additional details.
|
Unaudited Pro Forma Combined
Statement of Income
|
Year Ended Dec 31, 2016
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
Historical Dow
1
|
Historical DuPont
2
|
Reclass
3
|
Divestitures
4
|
Pro Forma
5
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
48,158
|
|
$
|
24,594
|
|
$
|
170
|
|
$
|
(1,812
|
)
|
$
|
(216
|
)
|
$
|
70,894
|
|
Cost of sales
|
37,641
|
|
14,469
|
|
559
|
|
(783
|
)
|
110
|
|
51,996
|
|
||||||
Other operating charges
|
—
|
|
686
|
|
(686
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
1,584
|
|
1,641
|
|
(40
|
)
|
(153
|
)
|
29
|
|
3,061
|
|
||||||
Selling, general and administrative expenses
|
3,304
|
|
4,319
|
|
(762
|
)
|
(203
|
)
|
43
|
|
6,701
|
|
||||||
Other (loss) income, net
|
—
|
|
708
|
|
(708
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
544
|
|
—
|
|
194
|
|
—
|
|
886
|
|
1,624
|
|
||||||
Restructuring, goodwill impairment and asset related charges - net
|
452
|
|
552
|
|
143
|
|
4
|
|
—
|
|
1,151
|
|
||||||
Integration and separation costs
|
—
|
|
—
|
|
735
|
|
—
|
|
(259
|
)
|
476
|
|
||||||
Asbestos-related charge
|
1,113
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,113
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
442
|
|
—
|
|
99
|
|
—
|
|
(25
|
)
|
516
|
|
||||||
Sundry income (expense) - net
|
1,202
|
|
—
|
|
711
|
|
(10
|
)
|
—
|
|
1,903
|
|
||||||
Interest income
|
107
|
|
—
|
|
(107
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense and amortization of debt discount
|
858
|
|
370
|
|
—
|
|
—
|
|
(120
|
)
|
1,108
|
|
||||||
Income from continuing operations before income taxes
|
4,413
|
|
3,265
|
|
22
|
|
(687
|
)
|
(930
|
)
|
6,083
|
|
||||||
Provision for income taxes on continuing operations
|
9
|
|
744
|
|
22
|
|
(160
|
)
|
(327
|
)
|
288
|
|
||||||
Income from continuing operations, net of tax
|
4,404
|
|
2,521
|
|
—
|
|
(527
|
)
|
(603
|
)
|
5,795
|
|
||||||
Net income attributable to noncontrolling interests
|
86
|
|
12
|
|
—
|
|
—
|
|
10
|
|
108
|
|
||||||
Net income attributable to DowDuPont Inc.
|
4,318
|
|
2,509
|
|
—
|
|
(527
|
)
|
(613
|
)
|
5,687
|
|
||||||
Preferred stock dividends
|
340
|
|
10
|
|
—
|
|
—
|
|
(10
|
)
|
340
|
|
||||||
Net income available for DowDuPont Inc. common stockholders
|
$
|
3,978
|
|
$
|
2,499
|
|
$
|
—
|
|
$
|
(527
|
)
|
$
|
(603
|
)
|
$
|
5,347
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
2.40
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
2.37
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,221.3
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,242.1
|
|
1.
|
See the consolidated statements of income included in Dow's Annual Report on Form 10-K for the year ended December 31, 2016.
|
2.
|
See the consolidated statements of income included in DuPont's Annual Report on Form 10-K for the year ended December 31, 2016.
|
3.
|
Certain reclassifications were made to conform with the presentation used for DowDuPont. The reclassifications are consistent with those identified and disclosed in the Current Report on Form 8-K/A filed with the SEC on October 26, 2017. Additionally, in the fourth quarter of 2017, to improve comparability and conform to the current period presentation, the Company reclassified $143 million of asset impairment charges from "Sundry income (expense) - net" to "Restructuring, goodwill impairment and asset related charges - net."
|
4.
|
Includes the following divestitures agreed to with certain regulatory agencies as a condition of approval for the Merger: Dow’s EAA Business; the DAS Divested Ag Business; and DuPont’s cereal broadleaf herbicides and chewing insecticides portfolio as well as its crop protection research and development pipeline and organization.
|
5.
|
Certain pro forma adjustments were made to illustrate the estimated effects of the Merger, assuming that the Merger had been consummated on January 1, 2016. Refer to
Summary of Pro Forma Adjustments
at the end of this section for additional details.
|
Summary of Pro Forma Adjustments
|
Year Ended
|
|||||
In millions (Unaudited)
|
Dec 31, 2017
|
Dec 31, 2016
|
||||
Net sales
|
|
|
||||
Intercompany transactions
1
|
$
|
(163
|
)
|
$
|
(216
|
)
|
Cost of sales
|
|
|
||||
Intercompany transactions
1
|
$
|
(163
|
)
|
$
|
(216
|
)
|
Policy harmonization
2
|
11
|
|
—
|
|
||
Depreciation expense
3
|
217
|
|
326
|
|
||
Total cost of sales
|
$
|
65
|
|
$
|
110
|
|
Research and development expenses
|
|
|
||||
Depreciation expense
3
|
$
|
19
|
|
$
|
29
|
|
Selling, general and administrative expenses
|
|
|
||||
Depreciation expense
3
|
$
|
29
|
|
$
|
43
|
|
Amortization of intangibles
|
|
|
||||
Amortization expense
4
|
$
|
591
|
|
$
|
886
|
|
Restructuring, goodwill impairment and asset related charges - net
|
|
|
||||
Transaction costs
5
|
$
|
(10
|
)
|
$
|
—
|
|
Integration and separation costs
|
|
|
||||
Transaction costs
5
|
$
|
(183
|
)
|
$
|
(259
|
)
|
Equity in earnings of nonconsolidated affiliates
|
|
|
||||
Fair value of nonconsolidated affiliates
6
|
$
|
(15
|
)
|
$
|
(25
|
)
|
Interest expense and amortization of debt discount
|
|
|
||||
Amortization of debt discount
7
|
$
|
(80
|
)
|
$
|
(120
|
)
|
Total pro forma adjustments to income from continuing operations before income taxes
|
$
|
(609
|
)
|
$
|
(930
|
)
|
Provision for income taxes on continuing operations
8
|
|
|
||||
Policy harmonization
2
|
$
|
(4
|
)
|
$
|
—
|
|
Depreciation expense
3
|
(91
|
)
|
(132
|
)
|
||
Amortization expense
4
|
(184
|
)
|
(280
|
)
|
||
Transaction costs
5
|
22
|
|
49
|
|
||
Fair value of nonconsolidated affiliates
6
|
(5
|
)
|
(8
|
)
|
||
Amortization of debt discount
7
|
29
|
|
44
|
|
||
Total provision for income taxes on continuing operations
|
$
|
(233
|
)
|
$
|
(327
|
)
|
Total pro forma adjustments to income from continuing operations, net of tax
|
$
|
(376
|
)
|
$
|
(603
|
)
|
Net income attributable to noncontrolling interests
|
|
|
||||
Reclass historical dividends
9
|
$
|
7
|
|
$
|
10
|
|
Net income from continuing operations attributable to DowDuPont Inc.
|
$
|
(383
|
)
|
$
|
(613
|
)
|
Preferred stock dividends
|
|
|
||||
Reclass historical dividends
9
|
$
|
(7
|
)
|
$
|
(10
|
)
|
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
(376
|
)
|
$
|
(603
|
)
|
1.
|
Elimination of intercompany transactions between Dow and DuPont.
|
2.
|
Adjustment to conform DuPont's accounting policy of deferring and amortizing expense for planned major maintenance activities with Dow's accounting policy of directly expensing the costs as incurred.
|
3.
|
Increase in depreciation expense for the fair value step-up of DuPont's property, plant and equipment.
|
4.
|
Increase in amortization expense for the fair value step-up of DuPont's finite-lived intangibles.
|
5.
|
Elimination of one-time transaction costs directly attributable to the Merger.
|
6.
|
Decrease in equity in earnings of nonconsolidated affiliates for the fair value adjustment to DuPont's investment in nonconsolidated affiliates.
|
7.
|
Decrease in interest expense related to amortization of the fair value adjustment to DuPont's long-term debt.
|
8.
|
Represents the income tax effect of the pro forma adjustments related to the Merger calculated using a blended statutory income tax rate, inclusive of state taxes. Management believes the blended statutory income tax rate resulting from this calculation provides a reasonable basis for the pro forma adjustments, however the effective tax rate of DowDuPont could be significantly different depending on the mix of activities.
|
9.
|
Reclassify historical dividends for DuPont preferred stock from "Preferred stock dividends" to "Net income attributable to noncontrolling interests."
|
Agriculture
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
7,516
|
|
$
|
6,173
|
|
$
|
6,327
|
|
Pro forma net sales
|
$
|
14,342
|
|
$
|
14,060
|
|
|
||
Operating EBITDA
|
|
$
|
971
|
|
$
|
833
|
|
||
Pro forma Operating EBITDA
|
$
|
2,611
|
|
$
|
2,322
|
|
|
||
Equity earnings
|
$
|
3
|
|
$
|
5
|
|
$
|
3
|
|
Agriculture
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(1
|
)%
|
1
|
%
|
(5
|
)%
|
Currency
|
—
|
|
(1
|
)
|
(4
|
)
|
Volume
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
Portfolio & other
|
25
|
|
—
|
|
—
|
|
Total
|
22
|
%
|
(2
|
)%
|
(11
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
1
|
|
|
|
||
Portfolio & other
|
1
|
|
|
|
||
Total
|
2
|
%
|
|
|
Performance Materials & Coatings
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
8,783
|
|
$
|
6,412
|
|
$
|
4,517
|
|
Pro forma net sales
|
$
|
8,740
|
|
$
|
6,362
|
|
|
||
Operating EBITDA
|
|
$
|
1,229
|
|
$
|
606
|
|
||
Pro forma Operating EBITDA
|
$
|
2,121
|
|
$
|
1,228
|
|
|
||
Equity earnings
|
$
|
394
|
|
$
|
303
|
|
$
|
205
|
|
Performance Materials & Coatings
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
8
|
%
|
(8
|
)%
|
(14
|
)%
|
Currency
|
—
|
|
(1
|
)
|
(5
|
)
|
Volume
|
2
|
|
(2
|
)
|
3
|
|
Portfolio & other
|
27
|
|
53
|
|
—
|
|
Total
|
37
|
%
|
42
|
%
|
(16
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
8
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
2
|
|
|
|
||
Portfolio & other
|
27
|
|
|
|
||
Total
|
37
|
%
|
|
|
Industrial Intermediates & Infrastructure
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
10
|
%
|
(8
|
)%
|
(10
|
)%
|
Currency
|
—
|
|
(1
|
)
|
(5
|
)
|
Volume
|
7
|
|
1
|
|
2
|
|
Portfolio & other
|
—
|
|
(13
|
)
|
(6
|
)
|
Total
|
17
|
%
|
(21
|
)%
|
(19
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
10
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
7
|
|
|
|
||
Portfolio & other
|
—
|
|
|
|
||
Total
|
17
|
%
|
|
|
Packaging & Specialty Plastics
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
21,456
|
|
$
|
18,404
|
|
$
|
18,357
|
|
Pro forma net sales
|
$
|
22,392
|
|
$
|
19,848
|
|
|
||
Operating EBITDA
|
|
$
|
4,633
|
|
$
|
4,812
|
|
||
Pro forma Operating EBITDA
|
$
|
4,698
|
|
$
|
5,129
|
|
|
||
Equity earnings
|
$
|
189
|
|
$
|
137
|
|
$
|
220
|
|
Packaging & Specialty Plastics
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
8
|
%
|
(8
|
)%
|
(18
|
)%
|
Currency
|
1
|
|
—
|
|
(5
|
)
|
Volume
|
5
|
|
9
|
|
5
|
|
Portfolio & other
|
3
|
|
(1
|
)
|
—
|
|
Total
|
17
|
%
|
—
|
%
|
(18
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
8
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
5
|
|
|
|
||
Portfolio & other
|
—
|
|
|
|
||
Total
|
13
|
%
|
|
|
Electronics & Imaging
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
3,356
|
|
$
|
2,307
|
|
$
|
1,987
|
|
Pro forma net sales
|
$
|
4,775
|
|
$
|
4,266
|
|
|
||
Operating EBITDA
|
|
$
|
759
|
|
$
|
583
|
|
||
Pro forma Operating EBITDA
|
$
|
1,486
|
|
$
|
1,173
|
|
|
||
Equity earnings
|
$
|
3
|
|
$
|
24
|
|
$
|
62
|
|
Electronics & Imaging
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(1
|
)%
|
(3
|
)%
|
(2
|
)%
|
Currency
|
—
|
|
—
|
|
(2
|
)
|
Volume
|
9
|
|
3
|
|
(1
|
)
|
Portfolio & other
|
37
|
|
16
|
|
—
|
|
Total
|
45
|
%
|
16
|
%
|
(5
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(1
|
)%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
11
|
|
|
|
||
Portfolio & other
|
2
|
|
|
|
||
Total
|
12
|
%
|
|
|
Nutrition & Biosciences
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
2,812
|
|
$
|
975
|
|
$
|
1,029
|
|
Pro forma net sales
|
$
|
5,980
|
|
$
|
5,763
|
|
|
||
Operating EBITDA
|
|
$
|
141
|
|
$
|
130
|
|
||
Pro forma Operating EBITDA
|
$
|
1,302
|
|
$
|
1,227
|
|
|
||
Equity earnings
|
$
|
13
|
|
$
|
10
|
|
$
|
6
|
|
Nutrition & Biosciences
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
(3
|
)%
|
(1
|
)%
|
Currency
|
—
|
|
—
|
|
(5
|
)
|
Volume
|
10
|
|
(2
|
)
|
(4
|
)
|
Portfolio & other
|
178
|
|
—
|
|
—
|
|
Total
|
188
|
%
|
(5
|
)%
|
(10
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
3
|
|
|
|
||
Portfolio & other
|
1
|
|
|
|
||
Total
|
4
|
%
|
|
|
Transportation & Advanced Polymers
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
(1
|
)%
|
—
|
%
|
Currency
|
—
|
|
(1
|
)
|
(7
|
)
|
Volume
|
6
|
|
7
|
|
5
|
|
Portfolio & other
|
175
|
|
49
|
|
—
|
|
Total
|
181
|
%
|
54
|
%
|
(2
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
2
|
%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
7
|
|
|
|
||
Portfolio & other
|
5
|
|
|
|
||
Total
|
14
|
%
|
|
|
Safety & Construction
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
3,006
|
|
$
|
1,877
|
|
$
|
1,938
|
|
Pro forma net sales
|
$
|
5,142
|
|
$
|
4,984
|
|
|
||
Operating EBITDA
|
|
$
|
415
|
|
$
|
400
|
|
||
Pro forma Operating EBITDA
|
$
|
1,190
|
|
$
|
1,130
|
|
|
||
Equity earnings
|
$
|
2
|
|
$
|
1
|
|
$
|
1
|
|
Safety & Construction
|
|
|
|
|||
Percentage change from prior year
|
2017
|
2016
|
2015
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
(1
|
)%
|
—
|
%
|
Currency
|
—
|
|
—
|
|
(5
|
)
|
Volume
|
3
|
|
(2
|
)
|
2
|
|
Portfolio & other
|
57
|
|
—
|
|
—
|
|
Total
|
60
|
%
|
(3
|
)%
|
(3
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(1
|
)%
|
|
|
||
Currency
|
—
|
|
|
|
||
Volume
|
4
|
|
|
|
||
Portfolio & other
|
—
|
|
|
|
||
Total
|
3
|
%
|
|
|
Corporate
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
387
|
|
$
|
281
|
|
$
|
349
|
|
Pro forma net sales
|
$
|
393
|
|
$
|
294
|
|
|
||
Operating EBITDA
|
|
$
|
(173
|
)
|
$
|
(257
|
)
|
||
Pro forma Operating EBITDA
|
$
|
(843
|
)
|
$
|
(812
|
)
|
|
||
Equity losses
|
$
|
(11
|
)
|
$
|
(28
|
)
|
$
|
(69
|
)
|
Cash Flow Summary
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Cash provided by (used for):
|
|
|
|
||||||
Operating activities
|
$
|
8,695
|
|
$
|
5,600
|
|
$
|
7,607
|
|
Investing activities
|
4,274
|
|
(3,479
|
)
|
(1,350
|
)
|
|||
Financing activities
|
(6,523
|
)
|
(4,014
|
)
|
(3,132
|
)
|
|||
Effect of exchange rate changes on cash
|
297
|
|
(77
|
)
|
(202
|
)
|
|||
Cash reclassified as held for sale
|
88
|
|
—
|
|
—
|
|
|||
Summary
|
|
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
$
|
6,831
|
|
$
|
(1,970
|
)
|
$
|
2,923
|
|
Cash and cash equivalents at beginning of year
|
6,607
|
|
8,577
|
|
5,654
|
|
|||
Cash and cash equivalents at end of year
|
$
|
13,438
|
|
$
|
6,607
|
|
$
|
8,577
|
|
Reconciliation of "Cash Provided by Operating Activities" to Free Cash Flow
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Cash provided by operating activities
|
$
|
8,695
|
|
$
|
5,600
|
|
$
|
7,607
|
|
Capital expenditures
|
(3,570
|
)
|
(3,804
|
)
|
(3,703
|
)
|
|||
Free Cash Flow
|
$
|
5,125
|
|
$
|
1,796
|
|
$
|
3,904
|
|
Credit Ratings
|
Long-Term Rating
|
Short-Term Rating
|
Outlook
|
Standard & Poor’s
|
BBB
|
A-2
|
Stable
|
Moody’s Investors Service
|
Baa2
|
P-2
|
Stable
|
Fitch Ratings
|
BBB
|
F2
|
Watch Positive
|
Credit Ratings
|
Long-Term Rating
|
Short-Term Rating
|
Outlook
|
Standard & Poor’s
|
A-
|
A-2
|
Stable
|
Moody’s Investors Service
|
A3
|
P-2
|
Negative
|
Fitch Ratings
|
A
|
F1
|
Watch Negative
|
Total Debt
|
Dec 31, 2017
|
Dec 31, 2016
|
||||||||||
In millions
|
Dow
|
DuPont
|
Total
|
|||||||||
Notes payable
|
$
|
484
|
|
$
|
1,464
|
|
$
|
1,948
|
|
$
|
272
|
|
Long-term debt due within one year
|
752
|
|
1,315
|
|
2,067
|
|
635
|
|
||||
Long-term debt
|
19,765
|
|
10,291
|
|
30,056
|
|
20,456
|
|
||||
Total debt
|
$
|
21,001
|
|
$
|
13,070
|
|
$
|
34,071
|
|
$
|
21,363
|
|
Dividends Paid for the years ended Dec 31
|
|
|
|
||||||
In millions, except per share amounts
|
2017
|
2016
|
2015
|
||||||
Dividends paid, per common share
1
|
$
|
2.22
|
|
$
|
1.84
|
|
$
|
1.68
|
|
Dividends paid to common stockholders
2
|
$
|
3,394
|
|
$
|
2,037
|
|
$
|
1,913
|
|
Dividends paid to preferred shareholders
3
|
$
|
—
|
|
$
|
425
|
|
$
|
340
|
|
1.
|
The 2017 dividend is comprised of $0.38 per share of DowDuPont dividends declared and paid in the fourth quarter of 2017 and the remaining amount relates to payments of Dow dividends declared prior to the Merger.
|
2.
|
The 2017 dividend consists of $885 million paid to DowDuPont common stockholders for dividends declared after the Merger, as well as $2,179 million paid to Dow common stockholders for dividends declared prior to the Merger, and $330 million paid to DuPont common stockholders after the Merger for dividends declared prior to the Merger.
|
Contractual Obligations
|
Payments Due In
|
||||||||||||||
In millions
|
2018
|
2019-2020
|
2021-2022
|
2023 & Beyond
|
Total
|
||||||||||
Long-term debt obligations
1
|
$
|
2,038
|
|
$
|
13,776
|
|
$
|
4,577
|
|
$
|
11,585
|
|
$
|
31,976
|
|
Expected cash requirements for interest
2
|
1,387
|
|
2,055
|
|
1,404
|
|
7,622
|
|
12,468
|
|
|||||
Pension and other postretirement benefits
|
1,082
|
|
1,740
|
|
2,534
|
|
13,728
|
|
19,084
|
|
|||||
Operating leases
|
614
|
|
903
|
|
630
|
|
1,186
|
|
3,333
|
|
|||||
Purchase obligations
3
|
3,790
|
|
5,394
|
|
4,284
|
|
7,120
|
|
20,588
|
|
|||||
Other noncurrent obligations
4
|
471
|
|
1,931
|
|
1,086
|
|
2,443
|
|
5,931
|
|
|||||
Total contractual obligations
|
$
|
9,382
|
|
$
|
25,799
|
|
$
|
14,515
|
|
$
|
43,684
|
|
$
|
93,380
|
|
1.
|
Excludes unamortized debt discount and issuance costs of
$346 million
and unamortized debt step-up premium of
$492 million
. Includes capital lease obligations of
$287 million
. Assumes the option to extend the DCC Term Loan facility will be exercised.
|
2.
|
Cash requirements for interest on long-term debt was calculated using current interest rates at
December 31, 2017
and includes
$5,163 million
of various floating rate notes.
|
3.
|
Includes take-or-pay and throughput obligations, outstanding purchase orders and other commitments greater than $1 million obtained through a survey conducted by the Subsidiaries.
|
4.
|
Includes liabilities related to asbestos litigation, environmental remediation, legal settlements and other noncurrent liabilities. The table also includes future payments under DuPont Pioneer license agreements of
$1,173 million
on an undiscounted basis (
$1,079 million
on a discounted basis). The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities and deferred tax liabilities as it is impractical to determine whether there will be a cash impact related to these liabilities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
|
Net Increase in Market-Related Asset Value Due to Recognition of Prior Gains (Losses)
|
|||
In millions
|
|||
2018
|
$
|
92
|
|
2019
|
(30
|
)
|
|
2020
|
155
|
|
|
2021
|
176
|
|
|
Total
|
$
|
393
|
|
•
|
Conserve - aggressively pursue energy efficiency and conservation
|
•
|
Optimize - increase and diversify energy resources
|
•
|
Accelerate - develop cost-effective, clean, renewable and alternative energy sources
|
•
|
Transition - to a sustainable energy future
|
1.
|
Includes DuPont costs for the period September 1, 2017 through December 31, 2017.
|
1.
|
Remediation obligations assumed upon completion of the Merger.
|
2.
|
Net change in indemnified remediation obligations. Pursuant to the Separation Agreement, as discussed below and in Note 16 to the Consolidated Financial Statements, DuPont is indemnified by Chemours for certain environmental matters.
|
Environmental Sites
1
|
DuPont
|
Dow
|
||||||||||
|
Sites
2
|
Superfund Sites
3, 4
|
Sites
5
|
Superfund Sites
3
|
||||||||
|
2017
|
2017
|
2017
|
2016
|
2017
|
2016
|
||||||
Number of sites at Jan 1
|
—
|
|
—
|
|
189
|
|
180
|
|
131
|
|
124
|
|
Sites added during year
6
|
99
|
|
62
|
|
60
|
|
16
|
|
2
|
|
10
|
|
Sites closed during year
|
—
|
|
—
|
|
(5
|
)
|
(7
|
)
|
(2
|
)
|
(3
|
)
|
Number of sites at Dec 31
|
99
|
|
62
|
|
244
|
|
189
|
|
131
|
|
131
|
|
1.
|
Active sites.
|
2.
|
Sites currently or formerly owned by DuPont. Remediation obligations are imposed by the Resource Conservation and Recovery Act or similar state law in the United States and by similar federal, state, provincial or local law in non-U.S. locations. At December 31, 2017, Chemours is indemnifying DuPont for activities at
36
of these sites. See discussion below and Note 16 to the Consolidated Financial Statements for additional information.
|
3.
|
Superfund sites are sites, including sites not owned by DuPont or Dow, where remediation obligations may be imposed on either company under federal or state Superfund laws or similar laws in non-U.S. locations. The total includes approximately 40 sites that have been counted twice as DuPont and Dow are separately named.
|
4.
|
At December 31, 2017, Chemours is indemnifying DuPont for activities at
28
of these Superfund sites. See discussion below and Note 16 to the Consolidated Financial Statements for additional information.
|
5.
|
Sites currently or formerly owned by Dow. Remediation obligations are imposed by the Resource Conservation and Recovery Act or similar state law in the United States and by similar federal, state, provincial or local law in non-U.S. locations. At December 31, 2017,
35
of these sites (38 sites at December 31, 2016) were formerly owned by Dowell Schlumberger, Inc., a group of companies in which Dow previously owned a 50 percent interest. Dow sold its interest in Dowell Schlumberger in 1992.
|
6.
|
Includes DuPont remediation obligations transferred as a result of the Merger.
|
Asbestos-Related Claim Activity
|
2017
|
2016
|
2015
|
|||
Claims unresolved at Jan 1
|
16,141
|
|
18,778
|
|
26,116
|
|
Claims filed
|
7,010
|
|
7,813
|
|
7,544
|
|
Claims settled, dismissed or otherwise resolved
|
(7,724
|
)
|
(10,450
|
)
|
(14,882
|
)
|
Claims unresolved at Dec 31
|
15,427
|
|
16,141
|
|
18,778
|
|
Claimants with claims against both Union Carbide and Amchem
|
(5,530
|
)
|
(5,741
|
)
|
(6,804
|
)
|
Individual claimants at Dec 31
|
9,897
|
|
10,400
|
|
11,974
|
|
Total Daily VAR by Exposure Type at Dec 31
|
2017
|
2016
|
||||||||||
In millions
|
Year-end
|
Average
|
Year-end
|
Average
|
||||||||
Commodities
|
$
|
32
|
|
$
|
35
|
|
$
|
24
|
|
$
|
23
|
|
Equity securities
|
4
|
|
9
|
|
17
|
|
16
|
|
||||
Foreign exchange
|
26
|
|
38
|
|
28
|
|
9
|
|
||||
Interest rate
|
70
|
|
76
|
|
82
|
|
90
|
|
||||
Composite
|
$
|
132
|
|
$
|
158
|
|
$
|
151
|
|
$
|
138
|
|
Foreign Currency Contracts at Dec 31, 2017
|
Fair Value
Liability
|
Fair Value
Sensitivity
|
||||
In millions
|
||||||
Foreign currency contracts
|
$
|
(33
|
)
|
$
|
(863
|
)
|
/s/ DELOITTE & TOUCHE
LLP
|
Deloitte & Touche
LLP
|
Midland, Michigan
|
February 15, 2018
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
PricewaterhouseCoopers LLP
|
Philadelphia, Pennsylvania
|
February 15, 2018
|
(In millions, except per share amounts) For the years ended Dec 31,
|
2017
|
2016
|
2015
|
||||||
Net sales
|
$
|
62,484
|
|
$
|
48,158
|
|
$
|
48,778
|
|
Cost of sales
|
50,414
|
|
37,640
|
|
37,745
|
|
|||
Research and development expenses
|
2,110
|
|
1,584
|
|
1,598
|
|
|||
Selling, general and administrative expenses
|
4,021
|
|
2,956
|
|
2,948
|
|
|||
Amortization of intangibles
|
1,013
|
|
544
|
|
419
|
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,280
|
|
595
|
|
559
|
|
|||
Integration and separation costs
|
1,101
|
|
349
|
|
23
|
|
|||
Asbestos-related charge
|
—
|
|
1,113
|
|
—
|
|
|||
Equity in earnings of nonconsolidated affiliates
|
764
|
|
442
|
|
674
|
|
|||
Sundry income (expense) - net
|
966
|
|
1,452
|
|
4,716
|
|
|||
Interest expense and amortization of debt discount
|
1,082
|
|
858
|
|
946
|
|
|||
Income from continuing operations before income taxes
|
1,193
|
|
4,413
|
|
9,930
|
|
|||
Provision (Credit) for income taxes on continuing operations
|
(476
|
)
|
9
|
|
2,147
|
|
|||
Income from continuing operations, net of tax
|
1,669
|
|
4,404
|
|
7,783
|
|
|||
Loss from discontinued operations, net of tax
|
(77
|
)
|
—
|
|
—
|
|
|||
Net income
|
1,592
|
|
4,404
|
|
7,783
|
|
|||
Net income attributable to noncontrolling interests
|
132
|
|
86
|
|
98
|
|
|||
Net income attributable to DowDuPont Inc.
|
1,460
|
|
4,318
|
|
7,685
|
|
|||
Preferred stock dividends
|
—
|
|
340
|
|
340
|
|
|||
Net income available for DowDuPont Inc. common stockholders
|
$
|
1,460
|
|
$
|
3,978
|
|
$
|
7,345
|
|
|
|
|
|
||||||
|
|
|
|
||||||
Per common share data:
|
|
|
|
||||||
Earnings per common share from continuing operations - basic
|
$
|
0.97
|
|
$
|
3.57
|
|
$
|
6.45
|
|
Loss per common share from discontinued operations - basic
|
(0.05
|
)
|
—
|
|
—
|
|
|||
Earnings per common share - basic
|
$
|
0.92
|
|
$
|
3.57
|
|
$
|
6.45
|
|
Earnings per common share from continuing operations - diluted
|
$
|
0.95
|
|
$
|
3.52
|
|
$
|
6.15
|
|
Loss per common share from discontinued operations - diluted
|
(0.04
|
)
|
—
|
|
—
|
|
|||
Earnings per common share - diluted
|
$
|
0.91
|
|
$
|
3.52
|
|
$
|
6.15
|
|
|
|
|
|
||||||
Dividends declared per share of common stock
|
$
|
1.76
|
|
$
|
1.84
|
|
$
|
1.72
|
|
Weighted-average common shares outstanding - basic
|
1,579.8
|
|
1,108.1
|
|
1,130.1
|
|
|||
Weighted-average common shares outstanding - diluted
|
1,598.1
|
|
1,123.2
|
|
1,241.4
|
|
(In millions) For the years ended Dec 31,
|
2017
|
2016
|
2015
|
||||||
Net Income
|
$
|
1,592
|
|
$
|
4,404
|
|
$
|
7,783
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||||
Unrealized losses on investments
|
(46
|
)
|
(4
|
)
|
(94
|
)
|
|||
Cumulative translation adjustments
|
446
|
|
(644
|
)
|
(986
|
)
|
|||
Pension and other postretirement benefit plans
|
466
|
|
(620
|
)
|
552
|
|
|||
Derivative instruments
|
(16
|
)
|
113
|
|
(122
|
)
|
|||
Total other comprehensive income (loss)
|
850
|
|
(1,155
|
)
|
(650
|
)
|
|||
Comprehensive Income
|
2,442
|
|
3,249
|
|
7,133
|
|
|||
Comprehensive income attributable to noncontrolling interests, net of tax
|
174
|
|
83
|
|
65
|
|
|||
Comprehensive Income Attributable to DowDuPont Inc.
|
$
|
2,268
|
|
$
|
3,166
|
|
$
|
7,068
|
|
(In millions, except share amounts) At Dec 31,
|
2017
|
2016
|
||||
Assets
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents (variable interest entities restricted - 2017: $107; 2016: $75)
|
$
|
13,438
|
|
$
|
6,607
|
|
Marketable securities
|
956
|
|
—
|
|
||
Accounts and notes receivable:
|
|
|
||||
Trade (net of allowance for doubtful receivables - 2017: $127; 2016: $110)
|
11,314
|
|
4,666
|
|
||
Other
|
5,579
|
|
4,312
|
|
||
Inventories
|
16,992
|
|
7,363
|
|
||
Other current assets
|
1,614
|
|
711
|
|
||
Total current assets
|
49,893
|
|
23,659
|
|
||
Investments
|
|
|
||||
Investment in nonconsolidated affiliates
|
5,336
|
|
3,747
|
|
||
Other investments (investments carried at fair value - 2017: $1,512; 2016: $1,959)
|
2,564
|
|
2,969
|
|
||
Noncurrent receivables
|
680
|
|
708
|
|
||
Total investments
|
8,580
|
|
7,424
|
|
||
Property
|
|
|
||||
Property
|
73,304
|
|
57,438
|
|
||
Less accumulated depreciation
|
37,057
|
|
33,952
|
|
||
Net property (variable interest entities restricted - 2017: $907; 2016: $961)
|
36,247
|
|
23,486
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
59,527
|
|
15,272
|
|
||
Other intangible assets (net of accumulated amortization - 2017: $5,550; 2016: $4,295)
|
33,274
|
|
6,026
|
|
||
Deferred income tax assets
|
1,869
|
|
3,079
|
|
||
Deferred charges and other assets
|
2,774
|
|
565
|
|
||
Total other assets
|
97,444
|
|
24,942
|
|
||
Total Assets
|
$
|
192,164
|
|
$
|
79,511
|
|
Liabilities and Equity
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable
|
$
|
1,948
|
|
$
|
272
|
|
Long-term debt due within one year
|
2,067
|
|
635
|
|
||
Accounts payable:
|
|
|
||||
Trade
|
9,134
|
|
4,519
|
|
||
Other
|
3,727
|
|
2,097
|
|
||
Income taxes payable
|
843
|
|
600
|
|
||
Accrued and other current liabilities
|
8,409
|
|
4,481
|
|
||
Total current liabilities
|
26,128
|
|
12,604
|
|
||
Long-Term Debt (variable interest entities nonrecourse - 2017: $249; 2016: $330)
|
30,056
|
|
20,456
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
6,266
|
|
923
|
|
||
Pension and other postretirement benefits - noncurrent
|
18,581
|
|
11,375
|
|
||
Asbestos-related liabilities - noncurrent
|
1,237
|
|
1,364
|
|
||
Other noncurrent obligations
|
7,969
|
|
5,560
|
|
||
Total other noncurrent liabilities
|
34,053
|
|
19,222
|
|
||
Stockholders' Equity
|
|
|
||||
Common stock (2017: authorized 5,000,000,000 shares of $0.01 par value each, issued 2,341,455,518 shares; 2016: authorized 1,500,000,000 shares of $2.50 par value each, issued 1,242,794,836)
|
23
|
|
3,107
|
|
||
Additional paid-in capital
|
81,257
|
|
4,262
|
|
||
Retained earnings
|
29,211
|
|
30,338
|
|
||
Accumulated other comprehensive loss
|
(8,972
|
)
|
(9,822
|
)
|
||
Unearned ESOP shares
|
(189
|
)
|
(239
|
)
|
||
Treasury stock at cost (2017: 14,123,049 shares; 2016: 31,661,501 shares)
|
(1,000
|
)
|
(1,659
|
)
|
||
DowDuPont's stockholders' equity
|
100,330
|
|
25,987
|
|
||
Noncontrolling interests
|
1,597
|
|
1,242
|
|
||
Total equity
|
101,927
|
|
27,229
|
|
||
Total Liabilities and Equity
|
$
|
192,164
|
|
$
|
79,511
|
|
(In millions) For the years ended Dec 31,
|
2017
|
2016
|
2015
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
1,592
|
|
$
|
4,404
|
|
$
|
7,783
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
3,969
|
|
2,862
|
|
2,521
|
|
|||
Provision (Credit) for deferred income tax
|
(2,083
|
)
|
(1,259
|
)
|
305
|
|
|||
Earnings of nonconsolidated affiliates less than dividends received
|
128
|
|
243
|
|
142
|
|
|||
Net periodic pension benefit cost
|
1,026
|
|
389
|
|
755
|
|
|||
Pension contributions
|
(1,744
|
)
|
(629
|
)
|
(844
|
)
|
|||
Net gain on sales of assets, businesses and investments
|
(1,172
|
)
|
(214
|
)
|
(4,655
|
)
|
|||
Net gain on step acquisition of nonconsolidated affiliates
|
—
|
|
(2,445
|
)
|
(361
|
)
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,280
|
|
595
|
|
559
|
|
|||
Amortization of Merger-related inventory step-up
|
1,573
|
|
—
|
|
—
|
|
|||
Asbestos-related charge
|
—
|
|
1,113
|
|
—
|
|
|||
Other net loss
|
470
|
|
361
|
|
437
|
|
|||
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
|
||||||
Accounts and notes receivable
|
(2,589
|
)
|
(1,539
|
)
|
(84
|
)
|
|||
Proceeds from interests in trade accounts receivable conduits
|
2,269
|
|
1,257
|
|
1,034
|
|
|||
Inventories
|
(2,218
|
)
|
610
|
|
780
|
|
|||
Accounts payable
|
2,631
|
|
569
|
|
(717
|
)
|
|||
Other assets and liabilities, net
|
1,563
|
|
(717
|
)
|
(48
|
)
|
|||
Cash provided by operating activities
|
8,695
|
|
5,600
|
|
7,607
|
|
|||
Investing activities
|
|
|
|
||||||
Capital expenditures
|
(3,570
|
)
|
(3,804
|
)
|
(3,703
|
)
|
|||
Investment in gas field developments
|
(121
|
)
|
(113
|
)
|
—
|
|
|||
Construction of assets pending sale / leaseback
|
—
|
|
(63
|
)
|
—
|
|
|||
Proceeds from sale / leaseback of assets
|
—
|
|
87
|
|
3
|
|
|||
Purchases of previously leased assets
|
(187
|
)
|
—
|
|
(46
|
)
|
|||
Payment into escrow / trust accounts
|
(701
|
)
|
(835
|
)
|
—
|
|
|||
Distribution from escrow / trust accounts
|
143
|
|
835
|
|
—
|
|
|||
Proceeds from sales of property and businesses, net of cash divested
|
2,959
|
|
284
|
|
2,383
|
|
|||
Acquisitions of property and businesses, net of cash acquired
|
19
|
|
(187
|
)
|
(123
|
)
|
|||
Cash acquired in Merger transaction
|
4,005
|
|
—
|
|
—
|
|
|||
Cash acquired in step acquisition of nonconsolidated affiliate
|
—
|
|
1,050
|
|
—
|
|
|||
Investments in and loans to nonconsolidated affiliates
|
(754
|
)
|
(1,020
|
)
|
(803
|
)
|
|||
Distributions and loan repayments from nonconsolidated affiliates
|
106
|
|
109
|
|
17
|
|
|||
Proceeds from sales of ownership interests in nonconsolidated affiliates
|
64
|
|
22
|
|
1,528
|
|
|||
Purchases of investments
|
(1,690
|
)
|
(577
|
)
|
(1,246
|
)
|
|||
Proceeds from sales and maturities of investments
|
4,101
|
|
733
|
|
640
|
|
|||
Other investing activities, net
|
(100
|
)
|
—
|
|
—
|
|
|||
Cash provided by (used for) investing activities
|
4,274
|
|
(3,479
|
)
|
(1,350
|
)
|
|||
Financing activities
|
|
|
|
||||||
Changes in short-term notes payable
|
(2,248
|
)
|
(33
|
)
|
(82
|
)
|
|||
Proceeds from issuance of long-term debt
|
499
|
|
32
|
|
1,383
|
|
|||
Payments on long-term debt
|
(663
|
)
|
(588
|
)
|
(1,114
|
)
|
|||
Purchases of treasury stock
|
(1,000
|
)
|
(916
|
)
|
(1,166
|
)
|
|||
Proceeds from issuance of company stock
|
66
|
|
—
|
|
—
|
|
|||
Proceeds from sales of common stock
|
453
|
|
398
|
|
508
|
|
|||
Employee taxes paid for share-based payment arrangements
|
(99
|
)
|
(65
|
)
|
(50
|
)
|
|||
Distributions to noncontrolling interests
|
(136
|
)
|
(176
|
)
|
(112
|
)
|
|||
Purchases of noncontrolling interests
|
—
|
|
(202
|
)
|
(175
|
)
|
|||
Contributions from noncontrolling interests
|
—
|
|
—
|
|
17
|
|
|||
Dividends paid to stockholders
|
(3,394
|
)
|
(2,462
|
)
|
(2,253
|
)
|
|||
Other financing activities, net
|
(1
|
)
|
(2
|
)
|
(88
|
)
|
|||
Cash used for financing activities
|
(6,523
|
)
|
(4,014
|
)
|
(3,132
|
)
|
|||
Effect of exchange rate changes on cash
|
297
|
|
(77
|
)
|
(202
|
)
|
|||
Cash reclassified as held for sale
|
88
|
|
—
|
|
—
|
|
|||
Summary
|
|
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
6,831
|
|
(1,970
|
)
|
2,923
|
|
|||
Cash and cash equivalents at beginning of year
|
6,607
|
|
8,577
|
|
5,654
|
|
|||
Cash and cash equivalents at end of year
|
$
|
13,438
|
|
$
|
6,607
|
|
$
|
8,577
|
|
Supplemental cash flow information
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
1,254
|
|
$
|
1,192
|
|
$
|
1,137
|
|
Income taxes
|
$
|
1,368
|
|
$
|
1,592
|
|
$
|
1,405
|
|
(In millions, except per share amounts)
|
Preferred Stock
|
Common Stock
|
Add'l Paid in Capital
|
Retained Earnings
|
Accum Other Comp Loss
|
Unearned ESOP
|
Treasury Stock
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance at Jan 1, 2015
|
$
|
4,000
|
|
$
|
3,107
|
|
$
|
4,846
|
|
$
|
23,045
|
|
$
|
(8,017
|
)
|
$
|
(325
|
)
|
$
|
(4,233
|
)
|
$
|
931
|
|
$
|
23,354
|
|
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
7,345
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,345
|
|
|||||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(650
|
)
|
—
|
|
—
|
|
—
|
|
(650
|
)
|
|||||||||
Dividends ($1.72 per common share)
|
—
|
|
—
|
|
—
|
|
(1,942
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,942
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
—
|
|
508
|
|
—
|
|
—
|
|
—
|
|
766
|
|
—
|
|
1,274
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
(429
|
)
|
—
|
|
—
|
|
53
|
|
—
|
|
—
|
|
(376
|
)
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(122
|
)
|
(122
|
)
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,688
|
)
|
—
|
|
(2,688
|
)
|
|||||||||
Other
|
—
|
|
—
|
|
11
|
|
(23
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(12
|
)
|
|||||||||
Balance at Dec 31, 2015
|
$
|
4,000
|
|
$
|
3,107
|
|
$
|
4,936
|
|
$
|
28,425
|
|
$
|
(8,667
|
)
|
$
|
(272
|
)
|
$
|
(6,155
|
)
|
$
|
809
|
|
$
|
26,183
|
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
3,978
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,978
|
|
|||||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,155
|
)
|
—
|
|
—
|
|
—
|
|
(1,155
|
)
|
|||||||||
Dividends ($1.84 per common share)
|
—
|
|
—
|
|
—
|
|
(2,037
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,037
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
—
|
|
398
|
|
—
|
|
—
|
|
—
|
|
717
|
|
—
|
|
1,115
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
(376
|
)
|
—
|
|
—
|
|
51
|
|
—
|
|
—
|
|
(325
|
)
|
|||||||||
ESOP shares acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
(18
|
)
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
433
|
|
433
|
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(916
|
)
|
—
|
|
(916
|
)
|
|||||||||
Preferred stock converted to common stock
|
(4,000
|
)
|
—
|
|
(695
|
)
|
—
|
|
—
|
|
—
|
|
4,695
|
|
—
|
|
—
|
|
|||||||||
Other
|
—
|
|
—
|
|
(1
|
)
|
(28
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(29
|
)
|
|||||||||
Balance at Dec 31, 2016
|
$
|
—
|
|
$
|
3,107
|
|
$
|
4,262
|
|
$
|
30,338
|
|
$
|
(9,822
|
)
|
$
|
(239
|
)
|
$
|
(1,659
|
)
|
$
|
1,242
|
|
$
|
27,229
|
|
2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
1,460
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,460
|
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
850
|
|
—
|
|
—
|
|
—
|
|
850
|
|
|||||||||
Dividends (
$1.76 p
er common share)
|
—
|
|
—
|
|
—
|
|
(2,558
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,558
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
—
|
|
519
|
|
—
|
|
—
|
|
—
|
|
724
|
|
—
|
|
1,243
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
(332
|
)
|
—
|
|
—
|
|
50
|
|
—
|
|
—
|
|
(282
|
)
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
355
|
|
355
|
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,000
|
)
|
—
|
|
(1,000
|
)
|
|||||||||
Merger impact
|
—
|
|
(3,084
|
)
|
76,829
|
|
—
|
|
—
|
|
—
|
|
935
|
|
—
|
|
74,680
|
|
|||||||||
Other
|
—
|
|
—
|
|
(21
|
)
|
(29
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(50
|
)
|
|||||||||
Balance at Dec 31, 2017
|
$
|
—
|
|
$
|
23
|
|
$
|
81,257
|
|
$
|
29,211
|
|
$
|
(8,972
|
)
|
$
|
(189
|
)
|
$
|
(1,000
|
)
|
$
|
1,597
|
|
$
|
101,927
|
|
Note
|
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
||
22
|
||
23
|
||
24
|
||
25
|
||
26
|
Summary of Changes to the Consolidated Statements of Cash Flows
|
2016
|
2015
|
||||||||||
In millions
|
As Filed
|
Updated
|
As Filed
|
Updated
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Excess tax benefits from share-based payment arrangements
|
$
|
(57
|
)
|
$
|
—
|
|
$
|
(41
|
)
|
$
|
—
|
|
Other assets and liabilities, net
|
$
|
(34
|
)
|
$
|
31
|
|
$
|
878
|
|
$
|
928
|
|
Cash provided by operating activities
|
$
|
5,478
|
|
$
|
5,600
|
|
$
|
7,516
|
|
$
|
7,607
|
|
Financing Activities
|
|
|
|
|
||||||||
Excess tax benefits from share-based payment arrangements
|
$
|
57
|
|
$
|
—
|
|
$
|
41
|
|
$
|
—
|
|
Employee taxes paid for share-based payment arrangements
|
$
|
—
|
|
$
|
(65
|
)
|
$
|
—
|
|
$
|
(50
|
)
|
Cash used for financing activities
|
$
|
(3,892
|
)
|
$
|
(4,014
|
)
|
$
|
(3,041
|
)
|
$
|
(3,132
|
)
|
Summary of Changes to the Consolidated Statements of Income
|
2016
|
2015
|
||||||||||
In millions
|
As Filed
|
Updated
|
As Filed
|
Updated
|
||||||||
Cost of sales
|
$
|
37,641
|
|
$
|
37,640
|
|
$
|
37,836
|
|
$
|
37,745
|
|
Selling, general and administrative expenses
|
$
|
3,304
|
|
$
|
2,956
|
|
$
|
2,971
|
|
$
|
2,948
|
|
Restructuring, goodwill impairment and asset related charges - net
|
$
|
452
|
|
$
|
595
|
|
$
|
415
|
|
$
|
559
|
|
Integration and separation costs
|
$
|
—
|
|
$
|
349
|
|
$
|
—
|
|
$
|
23
|
|
Sundry income (expense) - net
|
$
|
1,202
|
|
$
|
1,452
|
|
$
|
4,592
|
|
$
|
4,716
|
|
Interest income
|
$
|
107
|
|
$
|
—
|
|
$
|
71
|
|
$
|
—
|
|
Summary of Changes to the Consolidated Balance Sheets
|
Dec 31, 2016
|
|||||
In millions
|
As Filed
|
Updated
|
||||
Accounts and notes receivable - Other
|
$
|
4,358
|
|
$
|
4,312
|
|
Other current assets
|
$
|
665
|
|
$
|
711
|
|
Accounts payable - Other
|
$
|
2,401
|
|
$
|
2,097
|
|
Dividends payable
|
$
|
508
|
|
$
|
—
|
|
Accrued and other current liabilities
|
$
|
3,669
|
|
$
|
4,481
|
|
Summary of Changes to the Consolidated Statements of Cash Flows
|
2016
|
2015
|
||||||||||
In millions
|
As Filed
|
Updated
|
As Filed
|
Updated
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Net periodic pension benefit cost
|
$
|
—
|
|
$
|
389
|
|
$
|
—
|
|
$
|
755
|
|
Net gain on sales of assets, businesses and investments
|
$
|
—
|
|
$
|
(214
|
)
|
$
|
—
|
|
$
|
(4,655
|
)
|
Net gain on sales of investments
|
$
|
(116
|
)
|
$
|
—
|
|
$
|
(95
|
)
|
$
|
—
|
|
Net gain on sales of property, businesses and consolidated companies
|
$
|
(88
|
)
|
$
|
—
|
|
$
|
(3,811
|
)
|
$
|
—
|
|
Net gain on sales of ownership interests in nonconsolidated affiliates
|
$
|
(10
|
)
|
$
|
—
|
|
$
|
(749
|
)
|
$
|
—
|
|
Asset impairments and related costs
|
$
|
143
|
|
$
|
—
|
|
$
|
144
|
|
$
|
—
|
|
Restructuring, goodwill impairment and asset related charges - net
|
$
|
452
|
|
$
|
595
|
|
$
|
415
|
|
$
|
559
|
|
Loss on early extinguishment of debt
|
$
|
—
|
|
$
|
—
|
|
$
|
8
|
|
$
|
—
|
|
Other net loss
|
$
|
113
|
|
$
|
361
|
|
$
|
172
|
|
$
|
437
|
|
Accounts payable
|
$
|
458
|
|
$
|
569
|
|
$
|
(681
|
)
|
$
|
(717
|
)
|
Other assets and liabilities, net
1
|
$
|
31
|
|
$
|
(717
|
)
|
$
|
928
|
|
$
|
(48
|
)
|
Financing Activities
|
|
|
|
|
||||||||
Transaction financing, debt issuance and other costs
|
$
|
(2
|
)
|
$
|
—
|
|
$
|
(88
|
)
|
$
|
—
|
|
Other financing activities, net
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
—
|
|
$
|
(88
|
)
|
1.
|
As updated for ASU 2016-09.
|
Summary of Changes to the Consolidated Statements of Equity
|
2016
|
2015
|
||||||||||
In millions
|
As Filed
|
Updated
|
As Filed
|
Updated
|
||||||||
Dividend equivalents on participating securities
|
$
|
(28
|
)
|
$
|
—
|
|
$
|
(23
|
)
|
$
|
—
|
|
Other
|
$
|
—
|
|
$
|
(28
|
)
|
$
|
—
|
|
$
|
(23
|
)
|
Merger Consideration
|
|||
In millions (except exchange ratio)
|
|
||
DuPont Common Stock outstanding at Aug 31, 2017
|
868.3
|
|
|
DuPont exchange ratio
|
1.2820
|
||
DowDuPont Common Stock issued in exchange for DuPont Common Stock
|
1,113.2
|
|
|
Fair value of DowDuPont Common Stock issued
1
|
$
|
74,195
|
|
Fair value of DowDuPont equity awards issued in exchange for outstanding DuPont equity awards
2
|
485
|
|
|
Total consideration
|
$
|
74,680
|
|
1.
|
Amount was determined based on the price per share of Dow Common Stock of
$66.65
on August 31, 2017.
|
2.
|
Represents the fair value of replacement awards issued for DuPont's equity awards outstanding immediately before the Merger and attributable to the service periods prior to the Merger. The previous DuPont equity awards were converted into the right to receive
1.2820
shares of DowDuPont Common Stock.
|
DuPont Assets Acquired and Liabilities Assumed on Aug 31, 2017
|
Estimated
fair value as previously reported
1
|
Measurement period adjustments
2
|
Estimated fair value adjusted
|
||||||
In millions
|
|||||||||
Fair Value of Assets Acquired
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
4,005
|
|
$
|
—
|
|
$
|
4,005
|
|
Marketable securities
|
2,849
|
|
—
|
|
2,849
|
|
|||
Accounts and notes receivable - Trade
|
6,199
|
|
—
|
|
6,199
|
|
|||
Accounts and notes receivable - Other
|
1,652
|
|
—
|
|
1,652
|
|
|||
Inventories
|
8,886
|
|
(79
|
)
|
8,807
|
|
|||
Other current assets
|
360
|
|
—
|
|
360
|
|
|||
Assets held for sale
|
3,184
|
|
564
|
|
3,748
|
|
|||
Investment in nonconsolidated affiliates
|
1,685
|
|
(31
|
)
|
1,654
|
|
|||
Other investments
|
50
|
|
—
|
|
50
|
|
|||
Noncurrent receivables
|
84
|
|
—
|
|
84
|
|
|||
Property
|
12,122
|
|
(181
|
)
|
11,941
|
|
|||
Goodwill
3
|
45,501
|
|
(396
|
)
|
45,105
|
|
|||
Other intangible assets
3
|
27,844
|
|
(623
|
)
|
27,221
|
|
|||
Deferred income tax assets
|
487
|
|
(203
|
)
|
284
|
|
|||
Deferred charges and other assets
|
1,942
|
|
—
|
|
1,942
|
|
|||
Total Assets
|
$
|
116,850
|
|
$
|
(949
|
)
|
$
|
115,901
|
|
Fair Value of Liabilities Assumed
|
|
|
|
||||||
Notes payable
|
$
|
4,046
|
|
$
|
—
|
|
$
|
4,046
|
|
Long-term debt due within one year
|
1,273
|
|
—
|
|
1,273
|
|
|||
Accounts payable - Trade
|
2,344
|
|
—
|
|
2,344
|
|
|||
Accounts payable - Other
|
939
|
|
—
|
|
939
|
|
|||
Income taxes payable
|
140
|
|
—
|
|
140
|
|
|||
Accrued and other current liabilities
|
3,517
|
|
—
|
|
3,517
|
|
|||
Liabilities held for sale
|
104
|
|
11
|
|
115
|
|
|||
Long-Term Debt
|
9,878
|
|
—
|
|
9,878
|
|
|||
Deferred income tax liabilities
|
9,408
|
|
(940
|
)
|
8,468
|
|
|||
Pension and other postretirement benefits - noncurrent
|
8,092
|
|
(36
|
)
|
8,056
|
|
|||
Other noncurrent obligations
|
2,028
|
|
—
|
|
2,028
|
|
|||
Total Liabilities
|
$
|
41,769
|
|
$
|
(965
|
)
|
$
|
40,804
|
|
Noncontrolling interests
|
401
|
|
16
|
|
417
|
|
|||
Net Assets (Consideration for the Merger)
|
$
|
74,680
|
|
$
|
—
|
|
$
|
74,680
|
|
1.
|
As previously reported in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017.
|
2.
|
The Company recorded measurement period adjustments in the fourth quarter of 2017 to reflect facts and circumstances in existence as of the Merger. These measurement period adjustments primarily related to changes in preliminary valuation assumptions, including market participant estimates of cash flows and estimates of asset useful lives, as well as other initial estimates. All measurement period adjustments were offset against goodwill.
|
3.
|
See Note
13
for additional information.
|
DuPont Results of Operations
|
Sep 1 -
|
||
In millions
|
Dec 31, 2017
|
||
Net sales
|
$
|
7,033
|
|
Loss from continuing operations before income taxes
|
$
|
(1,578
|
)
|
•
|
From January 1, 2016 through December 31, 2017, Dow and DuPont collectively incurred
$455 million
of after tax costs (
$553 million
pretax) to prepare for and close the Merger. These Merger costs were reflected within the results of operations in the pro forma results presented below as if they were incurred on January 1, 2016. The costs incurred related to integration and to prepare for the Intended Business Separations were reflected in the pro forma results in the period in which they were incurred.
|
•
|
The Company incurred an after tax charge of
$931 million
(
$1,113 million
pretax) in 2017 related to the fair value step‑up of inventories acquired and sold, excluding the acquired inventory related to DuPont's Seed business. The 2017 pro forma results were adjusted to exclude this charge. The pro forma results for 2016 were adjusted to include this charge, as well as estimated charges of
$60 million
after tax (
$69 million
pretax) related to the remaining fair value step-up of inventories to be sold, excluding acquired inventory related to DuPont's Seed business.
|
•
|
To align with seasonality, charges related to the fair value step-up of acquired inventory related to DuPont’s Seed business were reflected in the pro forma results based on actual quantity of units sold during those periods as if the fair value step‑up of inventories had occurred on January 1, 2016. Accordingly,
$300 million
of after tax charges (
$431 million
pretax) for the year ended December 31, 2017 and
$1,222 million
of after tax charges (
$1,667 million
pretax) for the year ended December 31, 2016, were reflected in the pro forma results.
|
•
|
The pro forma results for the year ended December 31, 2016 were adjusted to include charges related to change in control provisions within a U.S. non-qualified pension plan for Dow and within other certain employee agreements as if they were incurred on January 1, 2016. The majority of which related to charges for the payment of pension plan obligations of
$594 million
after tax (
$892 million
pretax) recorded in the fourth quarter of 2017. See Note
19
for further information.
|
•
|
The 2017 pro forma results were adjusted to exclude a
$170 million
after tax charge incurred in September 2017 related to the impact of changes in tax attributes. The pro forma results for the year ended December 31, 2016, were adjusted to include this charge as if it were incurred on January 1, 2016.
|
DowDuPont Pro Forma Results of Operations
|
2017
|
2016
|
||||
In millions (except share amounts)
|
||||||
Net sales
|
$
|
79,686
|
|
$
|
71,321
|
|
Income from continuing operations, net of tax
|
$
|
4,677
|
|
$
|
2,341
|
|
Earnings per common share from continuing operations - basic
|
$
|
1.94
|
|
$
|
0.84
|
|
Earnings per common share from continuing operations - diluted
|
$
|
1.92
|
|
$
|
0.83
|
|
1.
|
Refer to Note
4
for additional information.
|
2.
|
The FMC Transactions include a cash consideration payment to DuPont of approximately
$1,200 million
, which reflects the difference in value between the Divested Ag Business and the H&N Business, subject to certain customary inventory and net working capital adjustments.
|
3.
|
Upon closing and pursuant to the terms of the FMC Transaction Agreement, DuPont entered into favorable supply contracts with FMC. DuPont recorded these contracts as intangible assets recognized at the fair value of off-market contracts. See Notes
4
and
13
for additional information.
|
H&N Business Assets Acquired and Liabilities Assumed on Nov 1, 2017
|
|
||
(In millions)
|
|
||
Fair Value of Assets Acquired
|
|
||
Cash and cash equivalents
|
$
|
16
|
|
Accounts and notes receivable - Trade and other
|
144
|
|
|
Inventories
|
314
|
|
|
Property
|
505
|
|
|
Goodwill
|
718
|
|
|
Other intangible assets
|
435
|
|
|
Other current assets, deferred charges and other non-current assets
|
16
|
|
|
Total Assets
|
$
|
2,148
|
|
Fair Value of Liabilities Assumed
|
|
||
Accounts payable, accrued and other current liabilities
|
70
|
|
|
Deferred income tax liabilities
|
108
|
|
|
Total Liabilities
|
$
|
178
|
|
Net Assets (Consideration for the H&N Business)
|
$
|
1,970
|
|
Dow Corning Assets Acquired and Liabilities Assumed on Jun 1, 2016
|
|||
In millions
|
|||
Fair Value of Previously Held Equity Investment, excluding the HSC Group
|
$
|
4,818
|
|
Fair Value of Assets Acquired
|
|
||
Cash and cash equivalents
|
$
|
1,050
|
|
Accounts and notes receivable - Trade
|
647
|
|
|
Accounts and notes receivable - Other
|
223
|
|
|
Inventories
|
1,147
|
|
|
Other current assets
|
51
|
|
|
Investment in nonconsolidated affiliates
|
110
|
|
|
Noncurrent receivables
|
112
|
|
|
Net property
|
3,996
|
|
|
Other intangible assets
1
|
2,987
|
|
|
Deferred income tax assets
|
999
|
|
|
Other assets
|
98
|
|
|
Total Assets Acquired
|
$
|
11,420
|
|
Fair Value of Liabilities Assumed
|
|
||
Accounts payable - Trade
|
$
|
374
|
|
Income taxes payable
|
260
|
|
|
Accrued and other current liabilities
|
404
|
|
|
Other current liabilities
|
112
|
|
|
Long-Term Debt
|
4,672
|
|
|
Deferred income tax liabilities
|
1,858
|
|
|
Pension and other postretirement benefits - noncurrent
2
|
1,241
|
|
|
Other noncurrent obligations
|
437
|
|
|
Total Liabilities Assumed
|
$
|
9,358
|
|
Noncontrolling interests
|
$
|
473
|
|
Goodwill
|
$
|
3,229
|
|
1.
|
Includes
$30 million
of trademarks/tradenames,
$1,200 million
of developed technology,
$2 million
of software and
$1,755 million
of customer-related intangibles. See Note
13
for additional information.
|
2.
|
Includes pension and other postretirement benefits as well as long-term disability obligations.
|
Results of Operations of DuPont's Divested Ag Business
|
Period Ended
|
||
In millions
|
Sep 1 - Oct 31, 2017
1
|
||
Net sales
|
$
|
199
|
|
Cost of sales
|
194
|
|
|
Research and development expenses
|
30
|
|
|
Selling, general and administrative expenses
2
|
102
|
|
|
Restructuring, goodwill impairment and asset related charges - net
|
(1
|
)
|
|
Sundry income (expense) - net
|
(1
|
)
|
|
Loss from discontinued operations before income taxes
|
$
|
(127
|
)
|
Benefit from income taxes
|
(50
|
)
|
|
Loss from discontinued operations, net of tax
|
$
|
(77
|
)
|
1.
|
The Divested Ag Business was disposed of on November 1, 2017.
|
2.
|
Includes
$44 million
of transaction costs associated with the disposal of the Divested Ag Business.
|
DowDuPont Synergy Program
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
Agriculture
|
$
|
—
|
|
$
|
94
|
|
$
|
40
|
|
$
|
134
|
|
Performance Materials & Coatings
|
—
|
|
9
|
|
2
|
|
11
|
|
||||
Industrial Intermediates & Infrastructure
|
—
|
|
12
|
|
—
|
|
12
|
|
||||
Packing & Specialty Plastics
|
—
|
|
33
|
|
3
|
|
36
|
|
||||
Electronics & Imaging
|
—
|
|
86
|
|
—
|
|
86
|
|
||||
Nutrition & Biosciences
|
—
|
|
1
|
|
—
|
|
1
|
|
||||
Transportation & Advanced Polymers
|
—
|
|
1
|
|
1
|
|
2
|
|
||||
Safety & Construction
|
—
|
|
21
|
|
—
|
|
21
|
|
||||
Corporate
|
510
|
|
33
|
|
28
|
|
571
|
|
||||
2017 restructuring charges
|
$
|
510
|
|
$
|
290
|
|
$
|
74
|
|
$
|
874
|
|
Charges against the reserve
|
—
|
|
(290
|
)
|
—
|
|
(290
|
)
|
||||
Non-cash compensation
|
(7
|
)
|
—
|
|
—
|
|
(7
|
)
|
||||
Cash payments
|
(64
|
)
|
—
|
|
(3
|
)
|
(67
|
)
|
||||
Reserve balance at Dec 31, 2017
|
$
|
439
|
|
$
|
—
|
|
$
|
71
|
|
$
|
510
|
|
•
|
The Company will close or consolidate several manufacturing, R&D and administrative facilities around the world aligned with the Seed and Crop Protection businesses, including the write-down of other non-manufacturing assets. As a result, the Company recorded a charge of
$94 million
, related to Agriculture. These facilities will be shut down or consolidated by the end of the fourth quarter of 2019.
|
•
|
The Company recorded a charge of
$86 million
for asset write-downs and write-offs in Electronics & Imaging, including the shutdown of a metalorganic manufacturing facility in Cheonan, South Korea, the write-off of in-process research and development and other intangible assets and the consolidation of certain R&D facilities. The Korean facility will be shut down by the second quarter of 2018.
|
•
|
The Company recorded a charge of
$22 million
for asset write-downs and write-offs aligned with an energy project, including the write-off of capital projects and other non-manufacturing assets in Packaging & Specialty Plastics.
|
•
|
The Company wrote-off
$21 million
of assets in Safety & Construction, including intangible assets as a result of the Clean Filtration Technologies plant shutdown in the fourth quarter of 2017.
|
•
|
The Company recorded a charge of
$67 million
for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets, certain corporate facilities and data centers. The charge related to Performance Materials & Coatings (
$9 million
), Industrial Intermediates & Infrastructure (
$12 million
), Packaging & Specialty Plastics (
$11 million
), Nutrition & Biosciences (
$1 million
), Transportation & Advanced Polymers (
$1 million
) and Corporate (
$33 million
). These manufacturing facilities will be shut down over the next two years.
|
2016 Restructuring Charges
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
Performance Materials & Coatings
|
$
|
—
|
|
$
|
27
|
|
$
|
15
|
|
$
|
42
|
|
Industrial Intermediates & Infrastructure
|
—
|
|
70
|
|
13
|
|
83
|
|
||||
Packaging & Specialty Plastics
|
—
|
|
10
|
|
—
|
|
10
|
|
||||
Corporate
|
268
|
|
46
|
|
—
|
|
314
|
|
||||
2016 restructuring charges
|
$
|
268
|
|
$
|
153
|
|
$
|
28
|
|
$
|
449
|
|
Charges against the reserve
|
—
|
|
(153
|
)
|
—
|
|
(153
|
)
|
||||
Cash payments
|
(67
|
)
|
—
|
|
(1
|
)
|
(68
|
)
|
||||
Reserve balance at Dec 31, 2016
|
$
|
201
|
|
$
|
—
|
|
$
|
27
|
|
$
|
228
|
|
Adjustments to the reserve
1
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||
Cash payments
|
(150
|
)
|
—
|
|
(3
|
)
|
(153
|
)
|
||||
Reserve balance at Dec 31, 2017
|
$
|
51
|
|
$
|
—
|
|
$
|
17
|
|
$
|
68
|
|
1.
|
Included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Performance Materials & Coatings.
|
•
|
Dow recorded a charge of
$70 million
for asset write-downs and write-offs including the shutdown of a solar manufacturing facility in Midland, Michigan; the write-down of a solar facility in Milpitas, California; and, the write-off of capital projects and in-process research and development. The charge was related to Industrial Intermediates & Infrastructure. The Midland facility was shut down in the third quarter of 2016.
|
•
|
To enhance competitiveness and streamline costs associated with the ownership restructure of Dow Corning, a silicones manufacturing facility in Yamakita, Japan, will be shut down by the end of 2018. In addition, an idled facility was shut down in the second quarter of 2016. As a result, Dow recorded a charge of
$25 million
related to Performance Materials & Coatings.
|
•
|
Dow will close and/or consolidate certain corporate facilities and data centers. Write-downs of
$25 million
were related to Corporate. These facilities will be shut down no later than the end of the second quarter of 2018.
|
•
|
A decision was made to shut down a small manufacturing facility and to write-down other non-manufacturing assets, including a cost method investment and certain aircraft. Write-downs of
$33 million
were recorded, related to Performance Materials & Coatings (
$2 million
), Packaging & Specialty Plastics (
$10 million
) and Corporate (
$21 million
). The manufacturing facility was shut down in the second quarter of 2016.
|
2015 Restructuring Charges
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
Agriculture
|
$
|
—
|
|
$
|
8
|
|
$
|
6
|
|
$
|
14
|
|
Performance Materials & Coatings
|
—
|
|
10
|
|
—
|
|
10
|
|
||||
Packaging & Specialty Plastics
|
—
|
|
12
|
|
—
|
|
12
|
|
||||
Electronics & Imaging
|
—
|
|
51
|
|
—
|
|
51
|
|
||||
Nutrition & Biosciences
|
—
|
|
14
|
|
2
|
|
16
|
|
||||
Safety & Construction
|
—
|
|
15
|
|
2
|
|
17
|
|
||||
Corporate
|
196
|
|
59
|
|
—
|
|
255
|
|
||||
2015 restructuring charges
|
$
|
196
|
|
$
|
169
|
|
$
|
10
|
|
$
|
375
|
|
Charges against the reserve
|
—
|
|
(169
|
)
|
—
|
|
(169
|
)
|
||||
Adjustments to the reserve
1
|
39
|
|
—
|
|
1
|
|
40
|
|
||||
Impact of currency
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
||||
Cash payments
|
(92
|
)
|
—
|
|
—
|
|
(92
|
)
|
||||
Reserve balance at Dec 31, 2015
|
$
|
143
|
|
$
|
—
|
|
$
|
10
|
|
$
|
153
|
|
Charges against the reserve
|
—
|
|
3
|
|
—
|
|
3
|
|
||||
Adjustments to the reserve
2
|
—
|
|
(3
|
)
|
6
|
|
3
|
|
||||
Cash payments
|
(98
|
)
|
—
|
|
(8
|
)
|
(106
|
)
|
||||
Reserve balance at Dec 31, 2016
|
$
|
45
|
|
$
|
—
|
|
$
|
8
|
|
$
|
53
|
|
Adjustments to the reserve
3
|
(9
|
)
|
—
|
|
(1
|
)
|
(10
|
)
|
||||
Cash payments
|
(33
|
)
|
—
|
|
—
|
|
(33
|
)
|
||||
Reserve balance at Jun 30, 2017
|
$
|
3
|
|
$
|
—
|
|
$
|
7
|
|
$
|
10
|
|
1.
|
Included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income. The unfavorable adjustments to severance and related benefit costs were related to Corporate and costs associated with exit and disposal activities were related to Agriculture.
|
2.
|
Included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income. The favorable adjustment to asset write-downs and write-offs was related to Safety & Construction. The unfavorable adjustment to costs associated with exit and disposal activities was related to Agriculture (
$5 million
) and Nutrition & Biosciences (
$1 million
).
|
3.
|
Included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income. The favorable adjustments to severance and related benefit costs were related to Corporate and costs associated with exit and disposal activities were related to Agriculture.
|
•
|
As a result of changing market dynamics in certain end-use markets, select manufacturing facilities and non-core assets aligned with the Electronics & Imaging business were shut down in 2016. The assets impacted included certain display films and metalorganic precursors, including a metalorganic materials manufacturing site in North Andover, Massachusetts, and related operations in Taoyuan, Taiwan, as well as certain display films’ manufacturing assets aligned with SKC Haas Display Films Co., Ltd., a former majority-owned joint venture located in Cheonan, South Korea. Dow recorded a
$51 million
charge for these asset write-downs and write-offs, related to the Electronics & Imaging segment.
|
•
|
Dow shut down and/or consolidated manufacturing capacity in the Safety & Construction segment during 2016. As a result, Dow recorded a charge of
$15 million
for asset write-offs.
|
•
|
A Nutrition & Health manufacturing facility in Institute, West Virginia, was shut down in the fourth quarter of 2015. As a result, an asset write-down of
$14 million
was recorded against the Nutrition & Biosciences segment.
|
•
|
A Packaging and Specialty Plastics plant in Schkopau, Germany, was permanently shut down in the second quarter of 2015, resulting in an asset write-off of
$12 million
, related to the Packaging & Specialty Plastics segment.
|
•
|
Select operations in the Agriculture segment were shut down, closed or idled in the second half of 2015, resulting in a pretax charge of
$8 million
for the write-down of assets.
|
•
|
A decision was made to shut down two small manufacturing facilities and an administrative facility to optimize Dow's asset footprint. Write-downs of
$14 million
were recorded, related to Performance Materials & Coatings (
$10 million
) and Corporate (
$4 million
). The manufacturing facilities were shut down in 2015 and the administrative facility was shut down in 2017.
|
•
|
Due to a change in Dow's strategy to monetize and exit certain Venture Capital portfolio investments, a write-down of
$55 million
was recorded, related to Corporate.
|
Dow Chlorine Value Chain Income Statement Information
|
|
||
In millions
|
2015
1
|
||
Income from continuing operations before income taxes
2
|
$
|
139
|
|
Loss before income taxes attributable to noncontrolling interests
|
11
|
|
|
Income from continuing operations before income taxes attributable to DowDuPont Inc.
2
|
$
|
150
|
|
1.
|
Income statement information for 2015 includes results through September 30, 2015.
|
2.
|
Excludes transaction costs associated with the separation of the chlorine value chain, which are reported below.
|
Sundry Income (Expense) - Net
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Gain on sales of other assets and investments
|
$
|
198
|
|
$
|
170
|
|
$
|
237
|
|
Interest income
|
147
|
|
107
|
|
71
|
|
|||
Foreign exchange losses
|
(63
|
)
|
(126
|
)
|
(190
|
)
|
|||
Gain on DAS Divested Ag Business
1
|
635
|
|
—
|
|
—
|
|
|||
Gain on divestiture of Dow's EAA Business
1
|
227
|
|
—
|
|
—
|
|
|||
Gain related to Dow's Nova patent infringement award
2
|
137
|
|
—
|
|
—
|
|
|||
Impact of split-off of Dow's chlorine value chain
3
|
7
|
|
6
|
|
2,233
|
|
|||
Loss related to Dow's Bayer CropScience arbitration matter
2
|
(469
|
)
|
—
|
|
—
|
|
|||
Gain on Dow's ownership restructure of Dow Corning
4
|
—
|
|
2,445
|
|
—
|
|
|||
Settlement of Dow's urethane matters class action lawsuit and opt-out cases
2
|
—
|
|
(1,235
|
)
|
—
|
|
|||
Gain (Loss) on divestitures
1
|
—
|
|
(26
|
)
|
2,043
|
|
|||
Gain on Dow's Univation step acquisition
4
|
—
|
|
—
|
|
361
|
|
|||
Costs associated with Dow's portfolio and productivity actions
5
|
—
|
|
(41
|
)
|
(119
|
)
|
|||
Other - net
|
147
|
|
152
|
|
80
|
|
|||
Total sundry income (expense) - net
|
$
|
966
|
|
$
|
1,452
|
|
$
|
4,716
|
|
Accrued and Other Current Liabilities at Dec 31
|
2017
|
2016
|
||||
In millions
|
||||||
Accrued payroll
|
$
|
1,931
|
|
$
|
1,105
|
|
Deferred revenue
|
$
|
2,606
|
|
$
|
274
|
|
•
|
As a result of The Act, the Company remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally
21 percent
. However, the Company is still analyzing certain aspects of The Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balance was
$2,666 million
, recorded as a benefit to “Provision (Credit) for income taxes on continuing operations.”
|
•
|
The Act requires a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits (“E&P”), which results in a one-time transition tax. As a result, the Company recorded a provisional amount for the transition tax liability for its foreign subsidiaries of
$1,580 million
, recorded as a charge to “Provision (Credit) for income taxes on continuing operations.” The Company has not yet completed its calculation of the total post-1986 foreign E&P for its foreign subsidiaries as E&P will not be finalized until the federal income tax return is filed. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets, which is a defined term under The Act.
|
•
|
For tax years beginning after December 31, 2017, The Act introduces new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). Due to its complexity and a current lack of guidance as to how to calculate the tax, the Company is not yet able to determine a reasonable estimate for the impact of the incremental tax liability. When additional guidance is available, the Company will make a policy election on whether the additional liability will be recorded in the period in which it is incurred or recognized for the basis differences that would be expected to reverse in future years.
|
Geographic Allocation of Income and Provision (Credit) for Income Taxes
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Income (Loss) from continuing operations before income taxes
|
|
|
|
||||||
Domestic
1, 2, 3
|
$
|
(2,804
|
)
|
$
|
485
|
|
$
|
5,313
|
|
Foreign
|
3,997
|
|
3,928
|
|
4,617
|
|
|||
Income from continuing operations before income taxes
|
$
|
1,193
|
|
$
|
4,413
|
|
$
|
9,930
|
|
Current tax expense (benefit)
|
|
|
|
||||||
Federal
|
$
|
(98
|
)
|
$
|
91
|
|
$
|
583
|
|
State and local
|
22
|
|
21
|
|
38
|
|
|||
Foreign
|
1,766
|
|
1,156
|
|
1,221
|
|
|||
Total current tax expense
|
$
|
1,690
|
|
$
|
1,268
|
|
$
|
1,842
|
|
Deferred tax (benefit) expense
|
|
|
|
||||||
Federal
4
|
$
|
(1,764
|
)
|
$
|
(1,255
|
)
|
$
|
358
|
|
State and local
|
8
|
|
(10
|
)
|
(8
|
)
|
|||
Foreign
|
(410
|
)
|
6
|
|
(45
|
)
|
|||
Total deferred tax (benefit) expense
|
$
|
(2,166
|
)
|
$
|
(1,259
|
)
|
$
|
305
|
|
Provision (Credit) for income taxes on continuing operations
|
$
|
(476
|
)
|
$
|
9
|
|
$
|
2,147
|
|
Income from continuing operations, net of tax
|
$
|
1,669
|
|
$
|
4,404
|
|
$
|
7,783
|
|
1.
|
In 2017, the domestic component of "Income (Loss) from continuing operations before income taxes" included a
$1.5 billion
charge recognized in "Cost of sales" related to the fair value step-up of inventories assumed in the Merger and the acquisition of the H&N Business, a
$1.5 billion
goodwill impairment charge,
$874 million
of restructuring charges related to the Synergy Program and
$308 million
of income from portfolio actions, primarily related to the Merger remedy actions. See Notes
3
and
4
for additional information.
|
2.
|
In 2016, the domestic component of "Income (Loss) from continuing operations before income taxes" included approximately
$2.1 billion
(
$3.5 billion
in 2015) and the foreign component contained
zero
(
$1.1 billion
in 2015) of income from portfolio actions, primarily related to the DCC Transaction. See Notes
3
,
4
and
6
for additional information.
|
4.
|
The 2016 amount reflects the tax impact of accrued one-time items and reduced domestic income which limited the utilization of tax credits.
|
1.
|
Includes the impact of valuation allowances in foreign jurisdictions.
|
2.
|
See Notes
3
,
4
and
6
for additional information.
|
3.
|
Includes a net tax benefit of
$261 million
related to an internal entity restructuring associated with the Intended Business Separations.
|
4.
|
Reflects the impact of the adoption of ASU 2016-09, which resulted in the recognition of excess tax benefits related to stock-based compensation in the "Provision (Credit) for income taxes on continuing operations." See Note
1
for additional information.
|
Deferred Tax Balances at Dec 31
|
2017
|
2016
|
||||||||||
In millions
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
||||||||
Property
|
$
|
508
|
|
$
|
3,634
|
|
$
|
307
|
|
$
|
2,860
|
|
Tax loss and credit carryforwards
|
3,425
|
|
—
|
|
2,450
|
|
—
|
|
||||
Postretirement benefit obligations
|
4,227
|
|
199
|
|
3,715
|
|
75
|
|
||||
Other accruals and reserves
|
1,661
|
|
190
|
|
1,964
|
|
883
|
|
||||
Intangibles
|
460
|
|
7,296
|
|
128
|
|
1,536
|
|
||||
Inventory
|
165
|
|
768
|
|
50
|
|
197
|
|
||||
Long-term debt
|
109
|
|
—
|
|
—
|
|
—
|
|
||||
Investments
|
295
|
|
611
|
|
179
|
|
119
|
|
||||
Unrealized exchange gains (losses), net
|
—
|
|
71
|
|
—
|
|
—
|
|
||||
Other – net
|
806
|
|
535
|
|
737
|
|
643
|
|
||||
Subtotal
|
$
|
11,656
|
|
$
|
13,304
|
|
$
|
9,530
|
|
$
|
6,313
|
|
Valuation allowances
1
|
(2,749
|
)
|
—
|
|
(1,061
|
)
|
—
|
|
||||
Total
|
$
|
8,907
|
|
$
|
13,304
|
|
$
|
8,469
|
|
$
|
6,313
|
|
Net Deferred Tax (Liability) Asset
|
$
|
(4,397
|
)
|
|
$
|
2,156
|
|
|
1.
|
Primarily related to the realization of recorded tax benefits on tax loss carryforwards from operations in the United States, Brazil, Luxembourg and Asia Pacific.
|
Operating Loss and Tax Credit Carryforwards
|
Deferred Tax Asset
|
|||||
In millions
|
2017
|
2016
|
||||
Operating loss carryforwards
|
|
|
||||
Expire within 5 years
1
|
$
|
288
|
|
$
|
176
|
|
Expire after 5 years or indefinite expiration
1
|
2,788
|
|
1,346
|
|
||
Total operating loss carryforwards
|
$
|
3,076
|
|
$
|
1,522
|
|
Tax credit carryforwards
|
|
|
||||
Expire within 5 years
|
$
|
49
|
|
$
|
28
|
|
Expire after 5 years or indefinite expiration
|
300
|
|
900
|
|
||
Total tax credit carryforwards
|
$
|
349
|
|
$
|
928
|
|
Total Operating Loss and Tax Credit Carryforwards
|
$
|
3,425
|
|
$
|
2,450
|
|
1.
|
Prior year was adjusted to conform with the current year presentation.
|
Total Gross Unrecognized Tax Benefits
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Total unrecognized tax benefits at Jan 1
|
$
|
231
|
|
$
|
280
|
|
$
|
240
|
|
Decreases related to positions taken on items from prior years
|
(6
|
)
|
(12
|
)
|
(6
|
)
|
|||
Increases related to positions taken on items from prior years
1
|
46
|
|
153
|
|
92
|
|
|||
Increases related to positions taken in the current year
2
|
465
|
|
135
|
|
10
|
|
|||
Settlement of uncertain tax positions with tax authorities
1
|
(11
|
)
|
(325
|
)
|
(56
|
)
|
|||
Decreases due to expiration of statutes of limitations
|
(14
|
)
|
—
|
|
—
|
|
|||
Exchange loss
|
1
|
|
—
|
|
—
|
|
|||
Total unrecognized tax benefits at Dec 31
|
$
|
712
|
|
$
|
231
|
|
$
|
280
|
|
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate
|
$
|
319
|
|
$
|
223
|
|
$
|
206
|
|
Total amount of interest and penalties (benefit) recognized in "Provision (Credit) for income taxes on continuing operations"
|
$
|
3
|
|
$
|
(55
|
)
|
$
|
80
|
|
Total accrual for interest and penalties associated with unrecognized tax benefits
|
$
|
135
|
|
$
|
89
|
|
$
|
178
|
|
1.
|
The 2016 balance includes the impact of a settlement agreement related to a historical change in the legal ownership structure of a nonconsolidated affiliate discussed below.
|
2.
|
The 2017 balance includes
$436 million
assumed in the Merger. The 2016 balance includes
$126 million
assumed in the DCC Transaction.
|
Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2017
|
Earliest Open Year
|
Jurisdiction
|
|
Argentina
|
2010
|
Brazil
|
2007
|
Canada
|
2011
|
China
|
2007
|
Denmark
|
2003
|
Germany
|
2006
|
India
|
2001
|
Italy
|
2012
|
The Netherlands
|
2014
|
Switzerland
|
2012
|
United States:
|
|
Federal income tax
|
2004
|
State and local income tax
|
2004
|
Net Income for Earnings Per Share Calculations - Basic
|
2017
|
2016
|
2015
|
||||||
In millions
|
|||||||||
Income from continuing operations, net of tax
|
$
|
1,669
|
|
$
|
4,404
|
|
$
|
7,783
|
|
Net income attributable to noncontrolling interests
|
(132
|
)
|
(86
|
)
|
(98
|
)
|
|||
Preferred stock dividends
1
|
—
|
|
(340
|
)
|
(340
|
)
|
|||
Net income attributable to participating securities
2
|
(13
|
)
|
(22
|
)
|
(51
|
)
|
|||
Income from continuing operations attributable to common stockholders
|
$
|
1,524
|
|
$
|
3,956
|
|
$
|
7,294
|
|
Loss from discontinued operations, net of tax
|
(77
|
)
|
—
|
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
1,447
|
|
$
|
3,956
|
|
$
|
7,294
|
|
Earnings Per Share Calculations - Basic
|
2017
|
2016
|
2015
|
||||||
Dollars per share
|
|||||||||
Income from continuing operations attributable to common stockholders
|
$
|
0.97
|
|
$
|
3.57
|
|
$
|
6.45
|
|
Loss from discontinued operations, net of tax
|
(0.05
|
)
|
—
|
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
0.92
|
|
$
|
3.57
|
|
$
|
6.45
|
|
Net Income for Earnings Per Share Calculations - Diluted
|
2017
|
2016
|
2015
|
||||||
In millions
|
|||||||||
Income from continuing operations, net of tax
|
$
|
1,669
|
|
$
|
4,404
|
|
$
|
7,783
|
|
Net income attributable to noncontrolling interests
|
(132
|
)
|
(86
|
)
|
(98
|
)
|
|||
Preferred stock dividends
1, 3
|
—
|
|
(340
|
)
|
—
|
|
|||
Net income attributable to participating securities
2
|
(13
|
)
|
(22
|
)
|
(51
|
)
|
|||
Income from continuing operations attributable to common stockholders
|
$
|
1,524
|
|
$
|
3,956
|
|
$
|
7,634
|
|
Loss from discontinued operations, net of tax
|
(77
|
)
|
—
|
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
1,447
|
|
$
|
3,956
|
|
$
|
7,634
|
|
Earnings Per Share Calculations - Diluted
|
2017
|
2016
|
2015
|
||||||
Dollars per share
|
|||||||||
Income from continuing operations attributable to common stockholders
|
$
|
0.95
|
|
$
|
3.52
|
|
$
|
6.15
|
|
Loss from discontinued operations, net of tax
|
(0.04
|
)
|
—
|
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
0.91
|
|
$
|
3.52
|
|
$
|
6.15
|
|
Share Count Information
|
2017
|
2016
|
2015
|
|||
Shares in millions
|
||||||
Weighted-average common shares - basic
4, 5
|
1,579.8
|
|
1,108.1
|
|
1,130.1
|
|
Plus dilutive effect of equity compensation plans
4
|
18.3
|
|
15.1
|
|
14.5
|
|
Plus dilutive effect of assumed conversion of preferred stock
1, 6
|
—
|
|
—
|
|
96.8
|
|
Weighted-average common shares - diluted
4
|
1,598.1
|
|
1,123.2
|
|
1,241.4
|
|
Stock options and deferred stock awards excluded from EPS calculations
7
|
1.4
|
|
1.9
|
|
4.6
|
|
1.
|
On December 30, 2016, Dow converted all shares of its Cumulative Convertible Perpetual Preferred Stock, Series A ("Preferred Stock") into shares of Dow's common stock. As a result of this conversion, no shares of Dow Preferred Stock are issued or outstanding. See Note
17
for additional information.
|
2.
|
Deferred stock awards are considered participating securities due to the Company's practice of paying dividend equivalents on unvested shares.
|
3.
|
Preferred Stock dividends were not added back in the calculation of diluted earnings per share for the period ended December 31, 2016, because the effect of an assumed conversion of Dow's Preferred Stock would have been antidilutive.
|
4.
|
As a result of the Merger, share amounts for the year ended December 31, 2017, reflect a weighted averaging effect of Dow shares outstanding prior to August 31, 2017 and DowDuPont shares outstanding on and after August 31, 2017.
|
5.
|
On December 30, 2016, Dow converted
4 million
shares of Dow Preferred Stock into
96.8 million
shares of Dow's common stock. As a result of this conversion,
0.5 million
shares of Dow common stock are included in "Weighted-average common shares - basic" for the year ended December 31, 2016.
|
6.
|
The calculation of diluted earnings per share for the year ended December 31, 2016, excludes
96.3 million
shares of Dow common stock because the effect of an assumed conversion of Dow Preferred Stock for the full period would have been antidilutive.
|
7.
|
These outstanding options to purchase shares of common stock and deferred stock awards were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive.
|
Inventories at Dec 31
|
2017
|
2016
|
||||
In millions
|
||||||
Finished goods
|
$
|
9,701
|
|
$
|
4,230
|
|
Work in process
|
4,512
|
|
1,510
|
|
||
Raw materials
|
1,267
|
|
853
|
|
||
Supplies
|
1,296
|
|
823
|
|
||
Total
|
$
|
16,776
|
|
$
|
7,416
|
|
Adjustment of inventories to a LIFO basis
|
216
|
|
(53
|
)
|
||
Total inventories
|
$
|
16,992
|
|
$
|
7,363
|
|
Property at Dec 31
1
|
Estimated Useful Lives (Years)
|
2017
|
2016
|
|||||
In millions
|
||||||||
Land and land improvements
|
0-25
|
|
$
|
3,448
|
|
$
|
2,524
|
|
Buildings
|
1-50
|
|
8,667
|
|
5,935
|
|
||
Machinery and equipment
|
1-25
|
|
51,312
|
|
38,499
|
|
||
Other property
|
3-50
|
|
5,277
|
|
4,380
|
|
||
Construction in progress
|
—
|
|
4,600
|
|
6,100
|
|
||
Total property
|
|
$
|
73,304
|
|
$
|
57,438
|
|
1.
|
Prior year data has been updated to conform with the current year presentation.
|
In millions
|
2017
|
2016
|
2015
|
||||||
Depreciation expense
|
$
|
2,755
|
|
$
|
2,130
|
|
$
|
1,908
|
|
Capitalized interest
|
$
|
247
|
|
$
|
243
|
|
$
|
218
|
|
Investments in Nonconsolidated Affiliates at Dec 31
|
|
|
||||
In millions
|
2017
1
|
2016
1
|
||||
Investment in nonconsolidated affiliates
|
$
|
5,336
|
|
$
|
3,747
|
|
Accrued and other current liabilities
|
(46
|
)
|
—
|
|
||
Other noncurrent obligations
|
(752
|
)
|
(1,030
|
)
|
||
Net investment in nonconsolidated affiliates
|
$
|
4,538
|
|
$
|
2,717
|
|
1.
|
The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2017, was
$32 million
less than its share of the investees’ net assets, exclusive of additional differences relating to the Merger, EQUATE and AFSI, which are discussed separately in the disclosures that follow. At December 31, 2016, the carrying amount of the Company’s investments in nonconsolidated affiliates was
$62 million
more than its share of the investees’ net assets, exclusive of additional differences relating to EQUATE and AFSI.
|
Dividends Received from Nonconsolidated Affiliates
|
|
|
|
||||||
In millions
|
2017
1
|
2016
|
2015
|
||||||
Dividends from nonconsolidated affiliates
|
$
|
900
|
|
$
|
685
|
|
$
|
816
|
|
1.
|
Increase in "Accounts payable - Other" at December 31, 2017, compared with December 31, 2016, is primarily due to higher purchases from Sadara.
|
Principal Nonconsolidated Affiliates at Dec 31
|
Ownership Interest
|
|||||
|
2017
|
2016
|
2015
|
|||
Dow Corning Corporation
1
|
N/A
|
|
N/A
|
|
50
|
%
|
EQUATE Petrochemical Company K.S.C.
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The HSC Group:
2
|
|
|
|
|||
DC HSC Holdings LLC
|
50
|
%
|
50
|
%
|
N/A
|
|
Hemlock Semiconductor L.L.C.
|
50.1
|
%
|
50.1
|
%
|
N/A
|
|
The Kuwait Olefins Company K.S.C.
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The Kuwait Styrene Company K.S.C.
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
Map Ta Phut Olefins Company Limited
3
|
32.77
|
%
|
32.77
|
%
|
32.77
|
%
|
Sadara Chemical Company
|
35
|
%
|
35
|
%
|
35
|
%
|
The SCG-Dow Group:
|
|
|
|
|
|
|
Siam Polyethylene Company Limited
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Polystyrene Company Limited
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Styrene Monomer Co., Ltd.
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Synthetic Latex Company Limited
|
50
|
%
|
50
|
%
|
50
|
%
|
1.
|
On June 1, 2016, Dow became the
100 percent
owner of Dow Corning. See Note
3
for additional information.
|
2.
|
The HSC Group was previously part of the Dow Corning equity method investment and was added as principal nonconsolidated affiliates in the fourth quarter of 2016.
|
3.
|
Dow's effective ownership of Map Ta Phut Olefins Company Limited is
32.77 percent
, of which Dow directly owns
20.27 percent
and indirectly owns
12.5
percent through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited.
|
Equity Earnings from Principal Nonconsolidated Affiliates
|
|
|
|
||||||
In millions
|
2017
|
2016
1
|
2015
2
|
||||||
Equity in earnings of principal nonconsolidated affiliates
|
$
|
701
|
|
$
|
449
|
|
$
|
704
|
|
1.
|
Equity in earnings of principal nonconsolidated affiliates for 2016 includes the results of Dow Corning through May 31, 2016.
|
2.
|
Equity in earnings of principal nonconsolidated affiliates for 2015 includes the results of Univation through April 30, 2015.
|
1.
|
The summarized balance sheet information for 2016 does not include Dow Corning.
|
1.
|
The results in this table reflect purchase and sale activity between certain principal nonconsolidated affiliates and Dow, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
|
2.
|
The summarized income statement information for 2016 includes the results of Dow Corning through May 31, 2016.
|
3.
|
The summarized income statement information for 2015 includes the results of Univation through April 30, 2015 and MEGlobal through November 30, 2015.
|
Goodwill
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Total
|
||||||||||||||||||
In millions
|
|||||||||||||||||||||||||||
Balance at Jan 1, 2016
|
$
|
1,472
|
|
$
|
2,781
|
|
$
|
1,054
|
|
$
|
1,534
|
|
$
|
3,631
|
|
$
|
344
|
|
$
|
150
|
|
$
|
1,188
|
|
$
|
12,154
|
|
Acquisition of an aniline plant
|
—
|
|
—
|
|
37
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
37
|
|
|||||||||
Sale of product lines
|
—
|
|
(10
|
)
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(15
|
)
|
|||||||||
Goodwill related to the DCC Transaction
1
|
—
|
|
2,251
|
|
—
|
|
—
|
|
528
|
|
—
|
|
450
|
|
—
|
|
3,229
|
|
|||||||||
Foreign currency impact
|
—
|
|
(104
|
)
|
(6
|
)
|
(11
|
)
|
(4
|
)
|
(4
|
)
|
1
|
|
(5
|
)
|
(133
|
)
|
|||||||||
Balance at Dec 31, 2016
|
$
|
1,472
|
|
$
|
4,918
|
|
$
|
1,085
|
|
$
|
1,518
|
|
$
|
4,155
|
|
$
|
340
|
|
$
|
601
|
|
$
|
1,183
|
|
$
|
15,272
|
|
Goodwill recognized from Merger
1, 2
|
13,644
|
|
—
|
|
—
|
|
3,521
|
|
4,040
|
|
12,201
|
|
6,283
|
|
5,416
|
|
45,105
|
|
|||||||||
Goodwill impairment
|
—
|
|
(1,491
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,491
|
)
|
|||||||||
Sale of SKC Haas Display Films
3
|
—
|
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
|||||||||
Divestiture of EAA Business
4
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
|||||||||
Goodwill recognized from H&N acquisition
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
718
|
|
—
|
|
—
|
|
718
|
|
|||||||||
Divestiture of DAS Divested Ag Business
6
|
(128
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(128
|
)
|
|||||||||
Dissolution of joint venture
7
|
—
|
|
48
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
48
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
|||||||||
Foreign currency impact
|
(115
|
)
|
194
|
|
16
|
|
33
|
|
14
|
|
(59
|
)
|
(14
|
)
|
(4
|
)
|
65
|
|
|||||||||
Balance at Dec 31, 2017
|
$
|
14,873
|
|
$
|
3,669
|
|
$
|
1,101
|
|
$
|
5,044
|
|
$
|
8,175
|
|
$
|
13,200
|
|
$
|
6,870
|
|
$
|
6,595
|
|
$
|
59,527
|
|
1.
|
See Note
3
for further information on goodwill recognized from business combinations.
|
2.
|
Final determination of the goodwill value assignment may result in adjustments to the preliminary value recorded.
|
3.
|
On June 30, 2017, Dow sold its ownership interest in the SKC Haas Display Films group of companies. See Note
18
for additional information.
|
4.
|
On September 1, 2017, Dow divested its EAA Business to SK Global Chemical Co., Ltd. See Note
4
for additional information.
|
5.
|
On November 1, 2017, DuPont acquired FMC's H&N Business. See Note
3
for additional information.
|
6.
|
On November 30, 2017, Dow divested the DAS Divested Ag Business. See Note
4
for additional information.
|
7.
|
On December 31, 2017, Dow dissolved a crude acrylic acid joint venture. See Note
23
for additional information.
|
Other Intangible Assets
1
|
Dec 31, 2017
|
Dec 31, 2016
|
||||||||||||||||
In millions
|
Gross
Carrying
Amount
|
Accum
Amort
|
Net
|
Gross Carrying Amount
|
Accum
Amort
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
7,627
|
|
$
|
(1,834
|
)
|
$
|
5,793
|
|
$
|
3,254
|
|
$
|
(1,383
|
)
|
$
|
1,871
|
|
Software
|
1,420
|
|
(780
|
)
|
640
|
|
1,336
|
|
(696
|
)
|
640
|
|
||||||
Trademarks/tradenames
|
1,814
|
|
(596
|
)
|
1,218
|
|
696
|
|
(503
|
)
|
193
|
|
||||||
Customer-related
|
14,537
|
|
(2,151
|
)
|
12,386
|
|
4,806
|
|
(1,567
|
)
|
3,239
|
|
||||||
Microbial cell factories
2
|
397
|
|
(6
|
)
|
391
|
|
—
|
|
—
|
|
—
|
|
||||||
Favorable supply contracts
3
|
495
|
|
(17
|
)
|
478
|
|
—
|
|
—
|
|
—
|
|
||||||
Other
4
|
703
|
|
(166
|
)
|
537
|
|
168
|
|
(146
|
)
|
22
|
|
||||||
Total other intangible assets with finite lives
|
$
|
26,993
|
|
$
|
(5,550
|
)
|
$
|
21,443
|
|
$
|
10,260
|
|
$
|
(4,295
|
)
|
$
|
5,965
|
|
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
||||||||||||
In-process research and development ("IPR&D")
|
710
|
|
—
|
|
710
|
|
61
|
|
—
|
|
61
|
|
||||||
Germplasm
5
|
6,265
|
|
—
|
|
6,265
|
|
—
|
|
—
|
|
—
|
|
||||||
Trademarks/tradenames
|
4,856
|
|
—
|
|
4,856
|
|
—
|
|
—
|
|
—
|
|
||||||
Total other intangible assets
|
$
|
38,824
|
|
$
|
(5,550
|
)
|
$
|
33,274
|
|
$
|
10,321
|
|
$
|
(4,295
|
)
|
$
|
6,026
|
|
1.
|
Prior year data has been updated to conform with the current year presentation.
|
2.
|
Microbial cell factories, derived from natural microbes, are used to sustainably produce enzymes, peptides and chemicals using natural metabolic processes. The Company recognized the microbial cell factories as an intangible asset upon the Merger.
|
3.
|
Upon closing and pursuant to the terms of the FMC Agreement, DuPont entered into favorable supply contracts with FMC. DuPont recorded these contracts as intangible assets at the fair value of off-market contracts. Refer to Notes
3
and
4
for additional information.
|
4.
|
Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
|
5.
|
Germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. The Company recognized germplasm as an intangible asset upon the Merger. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual or other factors which limit its useful life.
|
Merger Intangible Assets
|
Gross Carrying Amount
|
Weighted-average Amort Period
|
||
In millions
|
||||
Intangible assets with finite lives:
|
|
|
||
Developed technology
|
$
|
4,239
|
|
12 years
|
Trademarks/tradenames
|
1,080
|
|
15 years
|
|
Customer-related
|
9,264
|
|
17 years
|
|
Microbial cell factories
|
400
|
|
23 years
|
|
Other
|
453
|
|
17 years
|
|
Total other intangible assets with finite lives
|
$
|
15,436
|
|
|
Intangible assets with indefinite lives:
|
|
|
||
IPR&D
|
660
|
|
|
|
Germplasm
|
6,263
|
|
|
|
Trademarks/tradenames
|
4,862
|
|
|
|
Total other intangible assets
|
$
|
27,221
|
|
|
Amortization Expense
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Other intangible assets, excluding software
|
$
|
1,013
|
|
$
|
544
|
|
$
|
419
|
|
Software, included in "Cost of sales"
|
$
|
87
|
|
$
|
73
|
|
$
|
72
|
|
Interests Held at Dec 31
|
|
|
||||
In millions
|
2017
|
2016
|
||||
Carrying value of interests held
|
$
|
677
|
|
$
|
1,237
|
|
Percentage of anticipated credit losses
|
2.64
|
%
|
0.36
|
%
|
||
Impact to carrying value - 10% adverse change
|
$
|
—
|
|
$
|
1
|
|
Impact to carrying value - 20% adverse change
|
$
|
1
|
|
$
|
1
|
|
Cash Proceeds
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Sale of receivables
|
$
|
1
|
|
$
|
1
|
|
$
|
18
|
|
Collections reinvested in revolving receivables
|
$
|
21,293
|
|
$
|
21,652
|
|
$
|
22,951
|
|
Interests in conduits
1
|
$
|
2,269
|
|
$
|
1,257
|
|
$
|
1,034
|
|
1.
|
Presented in "Operating Activities" in the consolidated statements of cash flows.
|
Trade Accounts Receivable Sold at Dec 31
|
|
|
||||
In millions
|
2017
|
2016
|
||||
Delinquencies on sold receivables still outstanding
|
$
|
82
|
|
$
|
86
|
|
Trade accounts receivable outstanding and derecognized
|
$
|
612
|
|
$
|
2,257
|
|
Notes Payable
|
Dec 31, 2017
|
Dec 31, 2016
|
||||||||||
In millions
|
Dow
|
DuPont
|
Total
|
|||||||||
Commercial paper
|
$
|
231
|
|
$
|
1,436
|
|
$
|
1,667
|
|
$
|
—
|
|
Notes payable to banks and other lenders
|
253
|
|
28
|
|
281
|
|
225
|
|
||||
Notes payable to related companies
|
—
|
|
—
|
|
—
|
|
44
|
|
||||
Notes payable trade
|
—
|
|
—
|
|
—
|
|
3
|
|
||||
Total notes payable
|
$
|
484
|
|
$
|
1,464
|
|
$
|
1,948
|
|
$
|
272
|
|
Period-end average interest rates
|
4.42
|
%
|
1.95
|
%
|
|
4.60
|
%
|
Long-Term Debt
|
Dec 31, 2017
|
2016 Weighted Average Rate
|
Dec 31, 2016
|
||||||||||||||||
In millions
|
Dow Weighted Average Rate
|
Dow
|
DuPont Weighted Average Rate
|
DuPont
|
Total
|
||||||||||||||
Promissory notes and debentures:
|
|
|
|
|
|
|
|
||||||||||||
Final maturity 2017
|
—
|
%
|
$
|
—
|
|
|
|
$
|
—
|
|
$
|
—
|
|
6.06
|
%
|
$
|
442
|
|
|
Final maturity 2018
|
5.78
|
%
|
339
|
|
1.59
|
%
|
1,280
|
|
1,619
|
|
5.78
|
%
|
339
|
|
|||||
Final maturity 2019
|
8.55
|
%
|
2,122
|
|
2.23
|
%
|
521
|
|
2,643
|
|
8.55
|
%
|
2,122
|
|
|||||
Final maturity 2020
|
4.46
|
%
|
1,547
|
|
1.79
|
%
|
3,070
|
|
4,617
|
|
4.46
|
%
|
1,547
|
|
|||||
Final maturity 2021
|
4.71
|
%
|
1,424
|
|
2.07
|
%
|
1,580
|
|
3,004
|
|
4.72
|
%
|
1,424
|
|
|||||
Final maturity 2022
1
|
3.50
|
%
|
1,373
|
|
—
|
%
|
—
|
|
1,373
|
|
3.50
|
%
|
1,371
|
|
|||||
Final maturity 2023 and thereafter
|
6.00
|
%
|
7,182
|
|
3.32
|
%
|
3,492
|
|
10,674
|
|
5.98
|
%
|
7,199
|
|
|||||
Other facilities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar loans, various rates and maturities
|
2.44
|
%
|
4,564
|
|
2.37
|
%
|
1,518
|
|
6,082
|
|
1.60
|
%
|
4,595
|
|
|||||
Foreign currency loans, various rates and maturities
|
3.00
|
%
|
814
|
|
2.85
|
%
|
30
|
|
844
|
|
3.42
|
%
|
882
|
|
|||||
Medium-term notes, varying maturities through 2043
1
|
3.20
|
%
|
873
|
|
1.22
|
%
|
110
|
|
983
|
|
3.18
|
%
|
905
|
|
|||||
Tax-exempt bonds, varying maturities through 2038
|
5.66
|
%
|
343
|
|
—
|
%
|
—
|
|
343
|
|
5.66
|
%
|
343
|
|
|||||
Capital lease obligations
|
|
282
|
|
|
5
|
|
287
|
|
|
295
|
|
||||||||
Unamortized debt discount and issuance costs
|
|
(346
|
)
|
|
—
|
|
(346
|
)
|
|
(373
|
)
|
||||||||
Long-term debt due within one year
2
|
|
(752
|
)
|
|
(1,315
|
)
|
(2,067
|
)
|
|
(635
|
)
|
||||||||
Long-term debt
|
|
$
|
19,765
|
|
|
$
|
10,291
|
|
$
|
30,056
|
|
|
$
|
20,456
|
|
1.
|
Prior year data has been updated to conform with the current year presentation.
|
2.
|
Presented net of current portion of unamortized debt issuance costs.
|
1.
|
Assumes the option to extend a term loan facility related to the DCC Transaction will be exercised.
|
2.
|
Excludes unamortized debt step-up premium.
|
Committed and Available Credit Facilities at Dec 31, 2017
|
||||||||||
In millions
|
Subsidiary
|
Effective Date
|
Committed Credit
|
Credit Available
|
Maturity Date
|
Interest
|
||||
Five Year Competitive Advance and Revolving Credit Facility
|
Dow
|
March 2015
|
$
|
5,000
|
|
$
|
5,000
|
|
March 2020
|
Floating Rate
|
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
100
|
|
100
|
|
March 2018
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
100
|
|
100
|
|
March 2020
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
280
|
|
280
|
|
March 2020
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
100
|
|
100
|
|
March 2020
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
100
|
|
100
|
|
March 2020
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2015
|
200
|
|
200
|
|
March 2020
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
May 2016
|
200
|
|
200
|
|
May 2018
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
July 2016
|
200
|
|
200
|
|
July 2018
|
Floating Rate
|
||
Bilateral Revolving Credit Facility
|
Dow
|
August 2016
|
100
|
|
100
|
|
August 2018
|
Floating Rate
|
||
DCC Term Loan Facility
|
Dow
|
February 2016
|
4,500
|
|
—
|
|
December 2019
|
Floating Rate
|
||
Revolving Credit Facility
|
DuPont
|
March 2016
|
3,000
|
|
2,950
|
|
May 2019
|
Floating Rate
|
||
Term Loan Facility
|
DuPont
|
March 2016
|
4,500
|
|
3,000
|
|
March 2019
|
Floating Rate
|
||
Total Committed and Available Credit Facilities
|
|
|
$
|
18,380
|
|
$
|
12,330
|
|
|
|
(a)
|
the obligation to maintain the ratio of Dow’s consolidated indebtedness to consolidated capitalization at no greater than
0.65
to
1.00
at any time the aggregate outstanding amount of loans under the
Five
Year Competitive Advance and Revolving Credit Facility Agreement dated March 24, 2015 equals or exceeds
$500 million
,
|
(b)
|
a default if Dow or an applicable subsidiary fails to make any payment, including principal, premium or interest, under the applicable agreement on other indebtedness of, or guaranteed by, Dow or such applicable subsidiary in an aggregate amount of
$100 million
or more when due, or any other default or other event under the applicable agreement with respect to such indebtedness occurs which permits or results in the acceleration of
$400 million
or more in the aggregate of principal, and
|
(c)
|
a default if Dow or any applicable subsidiary fails to discharge or stay within
60
days after the entry of a final judgment against Dow or such applicable subsidiary of more than
$400 million
.
|
Guarantees
|
Dec 31, 2017
|
Dec 31, 2016
|
|||||||||||||
In millions
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
|||||||||
Dow guarantees
|
2023
|
$
|
4,774
|
|
$
|
49
|
|
2021
|
$
|
5,096
|
|
$
|
86
|
|
|
Dow residual value guarantees
|
2027
|
889
|
|
135
|
|
2027
|
947
|
|
134
|
|
|||||
Total Dow guarantees
|
|
$
|
5,663
|
|
$
|
184
|
|
|
$
|
6,043
|
|
$
|
220
|
|
|
DuPont guarantees
|
2022
|
$
|
260
|
|
$
|
—
|
|
|
|||||||
DuPont residual value guarantees
|
2029
|
37
|
|
—
|
|
||||||||||
Total DuPont guarantees
|
|
$
|
297
|
|
$
|
—
|
|
||||||||
Total guarantees
|
|
$
|
5,960
|
|
$
|
184
|
|
|
$
|
6,043
|
|
$
|
220
|
|
Minimum Lease Commitments
|
Dec 31, 2017
|
||||||||
In millions
|
Dow
|
DuPont
|
Total
|
||||||
2018
|
$
|
350
|
|
$
|
264
|
|
$
|
614
|
|
2019
|
304
|
|
190
|
|
494
|
|
|||
2020
|
272
|
|
137
|
|
409
|
|
|||
2021
|
237
|
|
104
|
|
341
|
|
|||
2022
|
208
|
|
81
|
|
289
|
|
|||
2023 and thereafter
|
918
|
|
268
|
|
1,186
|
|
|||
Total
|
$
|
2,289
|
|
$
|
1,044
|
|
$
|
3,333
|
|
Merger Impact on Dow, DuPont and DowDuPont Common Stock
|
Prior to Merger
1
|
Effect of Merger
2
|
||||
In thousands, except per share values
|
||||||
Dow
|
|
|
||||
Common Stock, par value per share
|
$
|
2.50
|
|
N/A
|
|
|
Common Stock, shares authorized
|
1,500,000
|
|
—
|
|
||
Common Stock, shares issued and outstanding
|
1,225,328
|
|
—
|
|
||
DuPont
|
|
|
||||
Common Stock, par value per share
|
$
|
0.30
|
|
N/A
|
|
|
Common Stock, shares authorized
|
1,800,000
|
|
—
|
|
||
Common Stock, shares issued and outstanding
|
868,338
|
|
—
|
|
||
DowDuPont
|
|
|
||||
Common Stock, par value per share
|
$
|
—
|
|
$
|
0.01
|
|
Common Stock, shares authorized
|
—
|
|
5,000,000
|
|
||
Common Stock, shares issued for Dow shares converted
|
—
|
|
1,225,328
|
|
||
Common Stock, shares issued for DuPont shares converted (Ratio of 1.2820 to 1)
|
—
|
|
1,113,209
|
|
1.
|
Immediately prior to the effective time of the Merger.
|
2.
|
At the effective time of the Merger.
|
Dividends Declared and Paid
|
|
|
|
||||||
In millions
|
2017
1
|
2016
|
2015
|
||||||
Dividends declared to common stockholders
|
$
|
2,558
|
|
$
|
2,037
|
|
$
|
1,942
|
|
Dividends paid to common stockholders
|
$
|
3,394
|
|
$
|
2,037
|
|
$
|
1,913
|
|
1.
|
Dividends declared consists of
$1,673 million
declared to Dow common stockholders prior to the Merger and
$885 million
declared to DowDuPont common stockholders after the Merger. Dividends paid consists of
$2,179 million
paid to Dow common stockholders and
$330 million
paid to DuPont common stockholders for dividends declared prior to the Merger, and
$885 million
paid to DowDuPont common stockholders for dividends declared after the Merger.
|
Dow Treasury Shares Issued Under Dow Stock-Based Compensation Programs
|
|
|
|
|||
In thousands
|
2017
|
2016
|
2015
|
|||
To employees and non-employee directors
|
14,195
|
|
14,494
|
|
16,490
|
|
Shares of Dow Common Stock
|
Issued
|
Held in Treasury
|
||
In thousands
|
||||
Balance at Jan 1, 2015
|
1,242,763
|
|
85,169
|
|
Issued
1
|
32
|
|
(16,490
|
)
|
Repurchased
2
|
—
|
|
57,174
|
|
Balance at Dec 31, 2015
|
1,242,795
|
|
125,853
|
|
Issued
1
|
—
|
|
(14,494
|
)
|
Repurchased
|
—
|
|
17,107
|
|
Preferred stock converted to common stock
|
—
|
|
(96,804
|
)
|
Balance at Dec 31, 2016
|
1,242,795
|
|
31,662
|
|
Issued
1
|
—
|
|
(14,195
|
)
|
Converted to DowDuPont shares or canceled on Aug 31, 2017
3
|
(1,242,795
|
)
|
(17,467
|
)
|
Balance at Aug 31, 2017
|
—
|
|
—
|
|
1.
|
Shares issued to employees and non-employee directors under Dow's equity compensation plans.
|
2.
|
Includes
34.1 million
treasury shares as part of the Reverse Morris Trust transaction with Olin, which were tendered as part of a non-cash, public exchange offer. See Note
6
for additional information.
|
3.
|
Each share of Dow Common Stock issued and outstanding immediately prior to the Merger was converted into
one
share of DowDuPont Common Stock; Treasury shares were canceled as a result of the Merger.
|
Accumulated Other Comprehensive Loss
1
|
Unrealized Gains (Losses) on Investments
|
Cumulative Translation Adj
|
Pension and Other Postretire Benefits
|
Derivative Instruments
|
Accum Other Comp Loss
|
||||||||||
In millions
|
|||||||||||||||
2015
|
|
|
|
|
|
||||||||||
Balance at Jan 1, 2015
|
$
|
141
|
|
$
|
(751
|
)
|
$
|
(7,321
|
)
|
$
|
(86
|
)
|
$
|
(8,017
|
)
|
Other comprehensive income (loss) before reclassifications
|
(40
|
)
|
(990
|
)
|
105
|
|
(136
|
)
|
(1,061
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(54
|
)
|
4
|
|
447
|
|
14
|
|
411
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(94
|
)
|
$
|
(986
|
)
|
$
|
552
|
|
$
|
(122
|
)
|
$
|
(650
|
)
|
Balance at Dec 31, 2015
|
$
|
47
|
|
$
|
(1,737
|
)
|
$
|
(6,769
|
)
|
$
|
(208
|
)
|
$
|
(8,667
|
)
|
2016
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassifications
|
32
|
|
(644
|
)
|
(1,354
|
)
|
84
|
|
(1,882
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(36
|
)
|
—
|
|
734
|
|
29
|
|
727
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(4
|
)
|
$
|
(644
|
)
|
$
|
(620
|
)
|
$
|
113
|
|
$
|
(1,155
|
)
|
Balance at Dec 31, 2016
|
$
|
43
|
|
$
|
(2,381
|
)
|
$
|
(7,389
|
)
|
$
|
(95
|
)
|
$
|
(9,822
|
)
|
2017
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassifications
|
25
|
|
454
|
|
52
|
|
(1
|
)
|
530
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(71
|
)
|
(8
|
)
|
414
|
|
(15
|
)
|
320
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(46
|
)
|
$
|
446
|
|
$
|
466
|
|
$
|
(16
|
)
|
$
|
850
|
|
Balance at Dec 31, 2017
|
$
|
(3
|
)
|
$
|
(1,935
|
)
|
$
|
(6,923
|
)
|
$
|
(111
|
)
|
$
|
(8,972
|
)
|
1.
|
Prior year amounts have been updated to conform with the current year presentation.
|
Tax Benefit (Expense)
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Unrealized gains (losses) on investments
|
$
|
(26
|
)
|
$
|
2
|
|
$
|
(52
|
)
|
Cumulative translation adjustments
|
98
|
|
171
|
|
(84
|
)
|
|||
Pension and other postretirement benefit plans
|
191
|
|
(438
|
)
|
252
|
|
|||
Derivative instruments
|
4
|
|
32
|
|
(70
|
)
|
|||
Tax benefit (expense) from income taxes related to other comprehensive income (loss) items
|
$
|
267
|
|
$
|
(233
|
)
|
$
|
46
|
|
Reclassifications Out of Accumulated Other Comprehensive Loss
|
2017
|
2016
|
2015
|
Consolidated Statements of Income Classification
|
|||||||
In millions
|
|||||||||||
Unrealized gains on investments
|
$
|
(110
|
)
|
$
|
(56
|
)
|
$
|
(84
|
)
|
See (1) below
|
|
Tax expense
|
39
|
|
20
|
|
30
|
|
See (2) below
|
||||
After tax
|
$
|
(71
|
)
|
$
|
(36
|
)
|
$
|
(54
|
)
|
|
|
Cumulative translation adjustments
|
$
|
(8
|
)
|
$
|
—
|
|
$
|
4
|
|
See (3) below
|
|
Pension and other postretirement benefit plans
|
$
|
607
|
|
$
|
913
|
|
$
|
665
|
|
See (4) below
|
|
Tax benefit
|
(193
|
)
|
(179
|
)
|
(218
|
)
|
See (2) below
|
||||
After tax
|
$
|
414
|
|
$
|
734
|
|
$
|
447
|
|
|
|
Derivative Instruments
|
$
|
(13
|
)
|
$
|
34
|
|
$
|
23
|
|
See (5) below
|
|
Tax benefit
|
(2
|
)
|
(5
|
)
|
(9
|
)
|
See (2) below
|
||||
After tax
|
$
|
(15
|
)
|
$
|
29
|
|
$
|
14
|
|
|
|
Total reclassifications for the period, after tax
|
$
|
320
|
|
$
|
727
|
|
$
|
411
|
|
|
1.
|
"Net sales" and "Sundry income (expense) - net."
|
2.
|
"Provision (Credit) for income taxes on continuing operations."
|
3.
|
"Sundry income (expense) - net."
|
4.
|
These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost of the Company's pension and other postretirement plans. See Note
19
for additional information. In the year ended December 31, 2016,
$360 million
was included in "Sundry income (expense) - net" (
zero
impact on "Provision (Credit) for income taxes on continuing operations") related to the DCC transaction. See Note
3
for additional information.
|
5.
|
"Cost of sales" and "Sundry income (expense) - net."
|
Noncontrolling Interests
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Balance at Jan 1
|
$
|
1,242
|
|
$
|
809
|
|
$
|
931
|
|
Net income attributable to noncontrolling interests
|
132
|
|
86
|
|
98
|
|
|||
Distributions to noncontrolling interests
1
|
(116
|
)
|
(123
|
)
|
(76
|
)
|
|||
Capital contributions
2
|
—
|
|
—
|
|
38
|
|
|||
Purchases of noncontrolling interests
3
|
—
|
|
—
|
|
(42
|
)
|
|||
Transfers of redeemable noncontrolling interest
4
|
—
|
|
—
|
|
(108
|
)
|
|||
Acquisition of noncontrolling interests
5
|
3
|
|
473
|
|
—
|
|
|||
Noncontrolling interests from Merger
6
|
417
|
|
—
|
|
—
|
|
|||
Deconsolidation of noncontrolling interests
7
|
(123
|
)
|
—
|
|
—
|
|
|||
Cumulative translation adjustments
|
41
|
|
(4
|
)
|
(34
|
)
|
|||
Other
|
1
|
|
1
|
|
2
|
|
|||
Balance at Dec 31
|
$
|
1,597
|
|
$
|
1,242
|
|
$
|
809
|
|
1.
|
Distributions to noncontrolling interests is net of
$20 million
in
2017
(
$53 million
in
2016
and
$36 million
in
2015
) in dividends paid to a joint venture, which were reclassified to "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income.
|
2.
|
Includes non-cash capital contributions of
$21 million
in 2015.
|
3.
|
The 2016 value excludes a
$202 million
cash payment as the noncontrolling interest was classified as "Accrued and other current liabilities" in the consolidated balance sheets. The 2015 value excludes a
$133 million
cash payment for the purchase of a Redeemable Noncontrolling Interest. See Notes
6
and
23
for additional information.
|
4.
|
See Notes
6
and
23
for additional information.
|
5.
|
The 2016 value reflects the amount assumed in the DCC Transaction. See Note
3
for additional information.
|
6.
|
See Note
3
for additional information.
|
7.
|
At June 30, 2017, Dow sold its ownership interest in the SKC Haas Display Films group of companies. See Note
13
for additional information.
|
DuPont Preferred Stock
|
Number of Shares
|
|
Shares in thousands
|
||
Authorized
|
23,000
|
|
$4.50 Series, callable at $120
|
1,673
|
|
$3.50 Series, callable at $102
|
700
|
|
Weighted-Average Assumptions for All Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2017
|
2016
|
2017
1
|
2016
|
2015
|
|||||
Discount rate
|
3.26
|
%
|
3.52
|
%
|
3.50
|
%
|
3.85
|
%
|
3.60
|
%
|
Rate of compensation increase
|
3.95
|
%
|
3.90
|
%
|
3.88
|
%
|
4.04
|
%
|
4.13
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
6.94
|
%
|
7.22
|
%
|
7.35
|
%
|
1.
|
Includes DuPont plans subsequent to the Merger date.
|
Weighted-Average Assumptions for U.S. Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2017
|
2016
|
2017
1
|
2016
|
2015
|
|||||
Discount rate
|
3.66
|
%
|
4.11
|
%
|
4.02
|
%
|
4.40
|
%
|
4.04
|
%
|
Rate of compensation increase
|
4.25
|
%
|
4.25
|
%
|
4.18
|
%
|
4.50
|
%
|
4.50
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
7.46
|
%
|
7.77
|
%
|
7.85
|
%
|
1.
|
Includes DuPont plans subsequent to the Merger date.
|
Weighted-Average Assumptions for U.S. Other Postretirement Benefits Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2017
|
2016
|
2017
1
|
2016
|
2015
|
|||||
Discount rate
|
3.54
|
%
|
3.83
|
%
|
3.76
|
%
|
3.96
|
%
|
3.68
|
%
|
Health care cost trend rate assumed for next year
|
6.52
|
%
|
7.00
|
%
|
7.00
|
%
|
7.25
|
%
|
7.06
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate health cost care trend rate)
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
Year that the rate reaches the ultimate health care cost trend rate:
|
|
|
|
|
|
|||||
Dow plans
|
2025
|
|
2025
|
|
2025
|
|
2025
|
|
2020
|
|
DuPont plans
|
2023
|
|
|
2023
|
|
|
|
1.
|
Includes DuPont plans subsequent to the Merger date.
|
Change in Projected Benefit Obligations, Plan Assets and Funded Status of All Significant Plans
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||
In millions
|
2017
1
|
2016
|
2017
1
|
2016
|
||||||||
Change in projected benefit obligations:
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
30,280
|
|
$
|
25,652
|
|
$
|
1,835
|
|
$
|
1,597
|
|
Merger impact
2
|
26,036
|
|
—
|
|
2,772
|
|
—
|
|
||||
Service cost
|
555
|
|
463
|
|
17
|
|
13
|
|
||||
Interest cost
|
1,130
|
|
846
|
|
80
|
|
52
|
|
||||
Plan participants' contributions
|
20
|
|
19
|
|
—
|
|
—
|
|
||||
Actuarial changes in assumptions and experience
|
1,781
|
|
1,967
|
|
(130
|
)
|
13
|
|
||||
Benefits paid
3
|
(2,170
|
)
|
(1,324
|
)
|
(210
|
)
|
(154
|
)
|
||||
Plan amendments
|
14
|
|
—
|
|
—
|
|
—
|
|
||||
Acquisitions/divestitures/other
4
|
72
|
|
3,201
|
|
—
|
|
313
|
|
||||
Effect of foreign exchange rates
|
875
|
|
(506
|
)
|
13
|
|
1
|
|
||||
Termination benefits/curtailment cost/settlements
5
|
(1,192
|
)
|
(38
|
)
|
—
|
|
—
|
|
||||
Benefit obligations at end of year
|
$
|
57,401
|
|
$
|
30,280
|
|
$
|
4,377
|
|
$
|
1,835
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
21,208
|
|
$
|
18,774
|
|
$
|
—
|
|
$
|
—
|
|
Merger impact
2
|
20,395
|
|
—
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
3,049
|
|
1,437
|
|
—
|
|
—
|
|
||||
Employer contributions
|
1,744
|
|
629
|
|
—
|
|
—
|
|
||||
Plan participants' contributions
|
20
|
|
19
|
|
—
|
|
—
|
|
||||
Benefits paid
3
|
(2,170
|
)
|
(1,324
|
)
|
—
|
|
—
|
|
||||
Acquisitions/divestitures/other
6
|
14
|
|
2,077
|
|
—
|
|
—
|
|
||||
Effect of foreign exchange rates
|
613
|
|
(404
|
)
|
—
|
|
—
|
|
||||
Settlements
7
|
(1,188
|
)
|
—
|
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
43,685
|
|
$
|
21,208
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Funded status:
|
|
|
|
|
||||||||
U.S. plans with plan assets
8
|
$
|
(8,991
|
)
|
$
|
(5,122
|
)
|
$
|
—
|
|
$
|
—
|
|
Non-U.S. plans with plan assets
8
|
(2,780
|
)
|
(2,474
|
)
|
—
|
|
—
|
|
||||
All other plans
8, 9
|
(1,945
|
)
|
(1,476
|
)
|
(4,377
|
)
|
(1,835
|
)
|
||||
Funded status at end of year
|
$
|
(13,716
|
)
|
$
|
(9,072
|
)
|
$
|
(4,377
|
)
|
$
|
(1,835
|
)
|
1.
|
Includes DuPont activity subsequent to the Merger Date.
|
2.
|
Plan assets and liabilities assumed in the Merger. Represents remeasurement of the projected benefit obligation and fair value of plan assets for DuPont's plans as of the Merger date.
|
3.
|
In the fourth quarter 2017, approximately
$140 million
of lump-sum payments were made from DuPont's U.S. qualified pension plan trust fund to a group of separated, vested plan participants who were extended a limited-time opportunity and voluntarily elected to receive their pension benefits in a single lump-sum payment.
|
4.
|
The 2017 impact includes the reclassification of a China pension liability of
$69 million
from "Other noncurrent obligations" to "Pension and other postretirement benefits - noncurrent" and the divestiture of a Korean company with pension benefit obligations of
$25 million
. The 2016 impact includes pension benefit obligations of
$3,252 million
and other postretirement benefit obligations of
$313 million
assumed with the ownership restructure of Dow Corning. The 2016 impact also includes the transfer of benefit obligations of
$53 million
in the U.S. through the purchase of annuity contracts from an insurance company. See Note
3
for additional information.
|
5.
|
The 2017 impact includes the settlement of certain plan obligations for a Dow U.S. non-qualified pension plan of
$1,170 million
required due to a change in control provision. The 2017 impact also includes the conversion of a Korean pension plan of
$22 million
to a defined contribution plan. The 2016 impact primarily relates to the curtailment of benefits for certain participants of a U.S. Dow Corning plan of
$36 million
.
|
6.
|
The 2017 impact relates to the divestiture of a Korean company. The 2016 impact includes plan assets assumed with the ownership restructure of Dow Corning of
$2,327 million
. The 2016 impact also includes the purchase of annuity contracts of
$55 million
in the U.S. associated with the transfer of benefit obligations to an insurance company and the transfer of plan assets associated with the Reverse Morris Trust transaction with Olin of
$184 million
. See Notes
3
and
6
for additional information.
|
7.
|
The 2017 impact includes payments made of
$1,170 million
to settle certain plan obligations of a Dow U.S. non-qualified pension plan required due to a change in control provision. The 2017 impact also includes payments made of
$18 million
to convert a Korean pension plan to a defined contribution plan.
|
8.
|
Updated to conform with the current year presentation.
|
9.
|
As of December 31, 2017,
$389 million
of the benefit obligations are supported by funding under the Trust agreement, defined in the "Trust Assets" section below.
|
Amounts Recognized in the Consolidated Balance Sheets for All Significant Plans
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||
In millions
|
2017
1
|
2016
|
2017
1
|
2016
|
||||||||
Amounts recognized in the consolidated balance sheets at Dec 31:
|
|
|
|
|
||||||||
Deferred charges and other assets
|
$
|
595
|
|
$
|
292
|
|
$
|
—
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(134
|
)
|
(74
|
)
|
(375
|
)
|
(158
|
)
|
||||
Pension and other postretirement benefits - noncurrent
|
(14,177
|
)
|
(9,290
|
)
|
(4,002
|
)
|
(1,677
|
)
|
||||
Net amount recognized
|
$
|
(13,716
|
)
|
$
|
(9,072
|
)
|
$
|
(4,377
|
)
|
$
|
(1,835
|
)
|
|
|
|
|
|
||||||||
Pretax amounts recognized in accumulated other comprehensive (income) loss at Dec 31:
|
|
|
|
|
||||||||
Net loss (gain)
|
$
|
10,734
|
|
$
|
11,379
|
|
$
|
(258
|
)
|
$
|
(133
|
)
|
Prior service credit
|
(265
|
)
|
(304
|
)
|
—
|
|
—
|
|
||||
Pretax balance in accumulated other comprehensive (income) loss at end of year
|
$
|
10,469
|
|
$
|
11,075
|
|
$
|
(258
|
)
|
$
|
(133
|
)
|
1.
|
Includes DuPont activity subsequent to the Merger Date.
|
Net Periodic Benefit Costs for All Significant Plans for the Year Ended Dec 31
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||||||||
In millions
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
||||||||||||
Net Periodic Benefit Costs:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
555
|
|
$
|
463
|
|
$
|
484
|
|
$
|
17
|
|
$
|
13
|
|
$
|
14
|
|
Interest cost
|
1,130
|
|
846
|
|
975
|
|
80
|
|
52
|
|
59
|
|
||||||
Expected return on plan assets
|
(1,955
|
)
|
(1,447
|
)
|
(1,382
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
(25
|
)
|
(24
|
)
|
(28
|
)
|
—
|
|
(3
|
)
|
(2
|
)
|
||||||
Amortization of unrecognized (gain) loss
|
638
|
|
587
|
|
706
|
|
(6
|
)
|
(7
|
)
|
(11
|
)
|
||||||
Curtailment/settlement/other
1
|
683
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit costs - Total
|
$
|
1,026
|
|
$
|
389
|
|
$
|
755
|
|
$
|
91
|
|
$
|
55
|
|
$
|
60
|
|
Less: Discontinued operations
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit costs - Continuing operations
|
$
|
1,025
|
|
$
|
389
|
|
$
|
755
|
|
$
|
91
|
|
$
|
55
|
|
$
|
60
|
|
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
|
||||||||||||
Net (gain) loss
|
$
|
680
|
|
$
|
1,954
|
|
$
|
(127
|
)
|
$
|
(131
|
)
|
$
|
14
|
|
$
|
11
|
|
Prior service cost
|
14
|
|
—
|
|
63
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
25
|
|
24
|
|
28
|
|
—
|
|
3
|
|
2
|
|
||||||
Amortization of unrecognized gain (loss)
|
(638
|
)
|
(587
|
)
|
(706
|
)
|
6
|
|
7
|
|
11
|
|
||||||
Settlement loss
2
|
(687
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Total recognized in other comprehensive (income) loss
|
$
|
(606
|
)
|
$
|
1,391
|
|
$
|
(742
|
)
|
$
|
(125
|
)
|
$
|
24
|
|
$
|
24
|
|
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$
|
420
|
|
$
|
1,780
|
|
$
|
13
|
|
$
|
(34
|
)
|
$
|
79
|
|
$
|
84
|
|
1.
|
The 2017 impact relates to the settlement of a Dow U.S. non-qualified plan triggered by a change in control provision. The 2016 impact relates to the curtailment of benefits for certain participants of a Dow Corning plan in the U.S.
|
2.
|
The 2017 impact relates to the settlement of a Dow U.S. non-qualified plan triggered by a change in control provision.
|
Estimated Future Benefit Payments at Dec 31, 2017
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||
In millions
|
||||||
2018
|
$
|
3,107
|
|
$
|
376
|
|
2019
|
3,116
|
|
360
|
|
||
2020
|
3,133
|
|
354
|
|
||
2021
|
3,158
|
|
344
|
|
||
2022
|
3,180
|
|
333
|
|
||
2023-2027
|
16,050
|
|
1,433
|
|
||
Total
|
$
|
31,744
|
|
$
|
3,200
|
|
Target Allocation for Plan Assets at Dec 31, 2017
|
Dow
|
DuPont
|
||
Asset Category
|
||||
Equity securities
|
36
|
%
|
35
|
%
|
Fixed income securities
|
35
|
|
50
|
|
Alternative investments
|
28
|
|
13
|
|
Other investments
|
1
|
|
2
|
|
Total
|
100
|
%
|
100
|
%
|
Basis of Fair Value Measurements
|
Dec 31, 2017
|
Dec 31, 2016
1
|
||||||||||||||||||||||
In millions
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Cash and cash equivalents
|
$
|
3,829
|
|
$
|
3,728
|
|
$
|
101
|
|
$
|
—
|
|
$
|
879
|
|
$
|
867
|
|
$
|
12
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equity securities
2
|
$
|
7,798
|
|
$
|
7,428
|
|
$
|
353
|
|
$
|
17
|
|
$
|
3,645
|
|
$
|
3,208
|
|
$
|
436
|
|
$
|
1
|
|
Non - U.S. equity securities
|
8,615
|
|
7,399
|
|
1,173
|
|
43
|
|
4,288
|
|
3,564
|
|
692
|
|
32
|
|
||||||||
Total equity securities
|
$
|
16,413
|
|
$
|
14,827
|
|
$
|
1,526
|
|
$
|
60
|
|
$
|
7,933
|
|
$
|
6,772
|
|
$
|
1,128
|
|
$
|
33
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt - government-issued
|
$
|
7,859
|
|
$
|
655
|
|
$
|
7,203
|
|
$
|
1
|
|
$
|
3,970
|
|
$
|
136
|
|
$
|
3,834
|
|
$
|
—
|
|
Debt - corporate-issued
|
6,481
|
|
621
|
|
5,819
|
|
41
|
|
3,187
|
|
306
|
|
2,866
|
|
15
|
|
||||||||
Debt - asset-backed
|
807
|
|
17
|
|
787
|
|
3
|
|
97
|
|
—
|
|
95
|
|
2
|
|
||||||||
Total fixed income securities
|
$
|
15,147
|
|
$
|
1,293
|
|
$
|
13,809
|
|
$
|
45
|
|
$
|
7,254
|
|
$
|
442
|
|
$
|
6,795
|
|
$
|
17
|
|
Alternative investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Hedge funds
|
$
|
1,678
|
|
$
|
—
|
|
$
|
746
|
|
$
|
932
|
|
$
|
1,670
|
|
$
|
92
|
|
$
|
631
|
|
$
|
947
|
|
Private market securities
|
1,404
|
|
—
|
|
—
|
|
1,404
|
|
1,128
|
|
—
|
|
—
|
|
1,128
|
|
||||||||
Real estate
|
2,563
|
|
260
|
|
7
|
|
2,296
|
|
2,087
|
|
21
|
|
24
|
|
2,042
|
|
||||||||
Derivatives - asset position
|
285
|
|
5
|
|
280
|
|
—
|
|
367
|
|
2
|
|
365
|
|
—
|
|
||||||||
Derivatives - liability position
|
(321
|
)
|
(2
|
)
|
(319
|
)
|
—
|
|
(374
|
)
|
(2
|
)
|
(372
|
)
|
—
|
|
||||||||
Total alternative investments
|
$
|
5,609
|
|
$
|
263
|
|
$
|
714
|
|
$
|
4,632
|
|
$
|
4,878
|
|
$
|
113
|
|
$
|
648
|
|
$
|
4,117
|
|
Other investments
|
$
|
277
|
|
$
|
37
|
|
$
|
238
|
|
$
|
2
|
|
$
|
351
|
|
$
|
30
|
|
$
|
226
|
|
$
|
95
|
|
Subtotal
|
$
|
41,275
|
|
$
|
20,148
|
|
$
|
16,388
|
|
$
|
4,739
|
|
$
|
21,295
|
|
$
|
8,224
|
|
$
|
8,809
|
|
$
|
4,262
|
|
Investments measured at net asset value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Hedge funds
|
$
|
747
|
|
|
|
|
$
|
—
|
|
|
|
|
||||||||||||
Private market securities
|
1,383
|
|
|
|
|
—
|
|
|
|
|
||||||||||||||
Real estate
|
437
|
|
|
|
|
—
|
|
|
|
|
||||||||||||||
Total investments measured at net asset value
|
$
|
2,567
|
|
|
|
|
$
|
—
|
|
|
|
|
||||||||||||
Items to reconcile to fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pension trust receivables
3
|
$
|
154
|
|
|
|
|
|
|
|
$
|
38
|
|
|
|
|
|
|
|
||||||
Pension trust payables
4
|
(311
|
)
|
|
|
|
|
|
|
(125
|
)
|
|
|
|
|||||||||||
Total
|
$
|
43,685
|
|
|
|
|
|
|
|
$
|
21,208
|
|
|
|
|
|
|
|
1.
|
As a result of the Merger, certain asset categories and classifications of prior period amounts were revised to improve comparability and conform with the current period presentation, including reclassifying cash and cash equivalents of
$794 million
, equity securities of
$1,646 million
, fixed income securities of
$442 million
, alternative investments of
$92 million
and other investments of
$30 million
from Level 2 to Level 1. Further, pension trust receivables and pension trust payables previously presented as Level 2 investments are now separately presented.
|
2.
|
DuPont's pension plans directly held
$910 million
(
2 percent
of total plan assets) of DowDuPont common stock at
December 31, 2017
.
|
3.
|
Primarily receivables for investment securities sold.
|
4.
|
Primarily payables for investment securities purchased.
|
Fair Value Measurement of Level 3 Pension Plan Assets
1
|
Equity Securities
|
Fixed Income Securities
|
Alternative Investments
|
Other Investments
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Balance at Jan 1, 2016
|
$
|
28
|
|
$
|
17
|
|
$
|
3,797
|
|
$
|
38
|
|
$
|
3,880
|
|
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2016
|
—
|
|
2
|
|
163
|
|
(7
|
)
|
158
|
|
|||||
Relating to assets held at Dec 31, 2016
|
7
|
|
(1
|
)
|
(15
|
)
|
11
|
|
2
|
|
|||||
Purchases, sales and settlements, net
|
—
|
|
(4
|
)
|
172
|
|
53
|
|
221
|
|
|||||
Transfers out of Level 3, net
|
(2
|
)
|
3
|
|
—
|
|
—
|
|
1
|
|
|||||
Balance at Dec 31, 2016
|
$
|
33
|
|
$
|
17
|
|
$
|
4,117
|
|
$
|
95
|
|
$
|
4,262
|
|
Assumed in Merger
|
18
|
|
48
|
|
115
|
|
—
|
|
181
|
|
|||||
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2017
|
(1
|
)
|
(3
|
)
|
163
|
|
6
|
|
165
|
|
|||||
Relating to assets held at Dec 31, 2017
|
5
|
|
6
|
|
78
|
|
(5
|
)
|
84
|
|
|||||
Purchases, sales and settlements, net
|
5
|
|
(23
|
)
|
159
|
|
(94
|
)
|
47
|
|
|||||
Balance at Dec 31, 2017
|
$
|
60
|
|
$
|
45
|
|
$
|
4,632
|
|
$
|
2
|
|
$
|
4,739
|
|
1.
|
As a result of the Merger, certain classifications of prior period amounts have been revised to improve comparability with the current period presentation, including the reclassification of
$1 million
at December 31, 2016 of assets from equity securities to alternative investments and
$481 million
at December 31, 2016 (
$276 million
at January 1, 2016) of assets from fixed income securities to alternative investments.
|
Net Asset Value as a Practical Expedient
|
2017
|
|
|
|||||
In millions
|
Fair Value
|
Unfunded Commitments
|
Redemption Frequency
|
Redemption Notice Period Range
|
||||
Hedge funds
1
|
$
|
747
|
|
$
|
—
|
|
Monthly, Quarterly
|
Ranges from 15-45 days monthly, 10-185 days quarterly
|
Private market securities
2
|
1,383
|
|
797
|
|
Not applicable
|
Not applicable
|
||
Real Estate
2
|
437
|
|
371
|
|
Not applicable
|
Not applicable
|
||
Total
|
$
|
2,567
|
|
$
|
1,168
|
|
|
|
1.
|
Less than
5 percent
of hedge funds have gates in place at the investor level for year-end redemptions. Hedge funds also contain either no lock up or a lock up period of less than
one
year.
|
Dow Weighted-Average Assumptions
|
2017
|
2016
|
2015
|
|||
Dividend yield
|
3.01
|
%
|
4.13
|
%
|
3.54
|
%
|
Expected volatility
|
23.71
|
%
|
31.60
|
%
|
27.84
|
%
|
Risk-free interest rate
|
1.28
|
%
|
1.12
|
%
|
1.02
|
%
|
Expected life of stock options granted during period (years)
|
7.5
|
|
7.8
|
|
7.7
|
|
Life of Employee Stock Purchase Plan (months)
|
3
|
|
4
|
|
6
|
|
Dow Stock Options
|
2017
|
|||||
Shares in thousands
|
Shares
|
Exercise Price
1
|
||||
Outstanding at Jan 1, 2017
|
34,770
|
|
$
|
36.20
|
|
|
Granted
|
2,221
|
|
$
|
61.19
|
|
|
Exercised
|
(10,194
|
)
|
$
|
36.02
|
|
|
Forfeited/Expired
|
(169
|
)
|
$
|
43.75
|
|
|
Outstanding at Dec 31, 2017
|
26,628
|
|
$
|
38.30
|
|
|
Remaining contractual life in years
|
|
5.10
|
|
|||
Aggregate intrinsic value in millions
|
$
|
877
|
|
|
||
Exercisable at Dec 31, 2017
|
22,019
|
|
$
|
35.16
|
|
|
Remaining contractual life in years
|
|
4.43
|
|
|||
Aggregate intrinsic value in millions
|
$
|
794
|
|
|
Additional Information about Dow Stock Options
|
|
|
|
||||||
In millions, except per share amounts
|
2017
|
2016
|
2015
|
||||||
Weighted-average fair value per share of options granted
|
$
|
14.44
|
|
$
|
10.95
|
|
$
|
11.61
|
|
Total compensation expense for stock options plans
|
$
|
37
|
|
$
|
32
|
|
$
|
55
|
|
Related tax benefit
|
$
|
14
|
|
$
|
12
|
|
$
|
20
|
|
Total amount of cash received from the exercise of options
|
$
|
310
|
|
$
|
312
|
|
$
|
377
|
|
Total intrinsic value of options exercised
1
|
$
|
286
|
|
$
|
153
|
|
$
|
175
|
|
Related tax benefit
|
$
|
106
|
|
$
|
57
|
|
$
|
65
|
|
Dow Deferred Stock
|
2017
|
||||
Shares in thousands
|
Shares
|
Grant Date Fair Value
1
|
|||
Nonvested at Jan 1, 2017
|
6,382
|
|
$
|
47.49
|
|
Granted
|
1,709
|
|
$
|
61.29
|
|
Vested
|
(2,804
|
)
|
$
|
47.60
|
|
Canceled
|
(112
|
)
|
$
|
50.14
|
|
Conversion of performance deferred stock awards at Conversion Date
|
8,171
|
|
$
|
49.94
|
|
Nonvested at Dec 31, 2017
|
13,346
|
|
$
|
50.71
|
|
Additional Information about Dow Deferred Stock
|
|
|
|
||||||
In millions, except per share amounts
|
2017
|
2016
|
2015
|
||||||
Weighted-average fair value per share of deferred stock granted
|
$
|
61.29
|
|
$
|
46.25
|
|
$
|
49.42
|
|
Total fair value of deferred stock vested
|
$
|
179
|
|
$
|
166
|
|
$
|
162
|
|
Related tax benefit
|
$
|
66
|
|
$
|
61
|
|
$
|
60
|
|
Total compensation expense for deferred stock awards
|
$
|
178
|
|
$
|
97
|
|
$
|
110
|
|
Related tax benefit
|
$
|
66
|
|
$
|
36
|
|
$
|
41
|
|
Dow Performance Deferred Stock Awards
|
Target Shares Granted
1
|
Grant Date Fair Value
2
|
||||
Shares in thousands
|
||||||
Year
|
Performance Period
|
|||||
2017
|
Sep 1, 2017 - Aug 31, 2019
|
232
|
|
$
|
71.16
|
|
2017
3
|
Jan 1, 2017 - Dec 31, 2019
|
1,728
|
|
$
|
81.99
|
|
2016
3
|
Jan 1, 2016 - Dec 31, 2018
|
2,283
|
|
$
|
52.68
|
|
2015
3
|
Jan 1, 2015 - Dec 31, 2017
|
2,258
|
|
$
|
59.08
|
|
Dow Performance Deferred Stock
|
2017
|
||||
Shares in thousands
|
Target Shares Granted
|
Grant Date Fair Value
1
|
|||
Nonvested at Jan 1, 2017
|
4,454
|
|
$
|
55.85
|
|
Granted
|
1,960
|
|
$
|
80.71
|
|
Canceled
|
(131
|
)
|
$
|
58.91
|
|
Converted to deferred stock awards
|
(6,051
|
)
|
$
|
63.24
|
|
Nonvested at Dec 31, 2017
|
232
|
|
$
|
71.16
|
|
Additional Information about Dow Performance Deferred Stock
|
|
|
|
||||||
In millions, except share amounts
|
2017
|
2016
|
2015
|
||||||
Total fair value of performance deferred stock vested and delivered
1
|
$
|
202
|
|
$
|
103
|
|
$
|
37
|
|
Related tax benefit
|
$
|
75
|
|
$
|
38
|
|
$
|
14
|
|
Total compensation expense for performance deferred stock awards
|
$
|
106
|
|
$
|
125
|
|
$
|
172
|
|
Related tax benefit
|
$
|
39
|
|
$
|
46
|
|
$
|
63
|
|
Shares of performance deferred stock settled in cash (in thousands)
2
|
616
|
861
|
327
|
||||||
Total cash paid to settle performance deferred stock awards
3
|
$
|
38
|
|
$
|
40
|
|
$
|
16
|
|
Dow Restricted Stock
|
Shares Issued (in thousands)
|
Weighted-Average Fair Value
|
|||
Year
|
|||||
2017
|
33
|
|
$
|
62.04
|
|
2016
|
32
|
|
$
|
50.55
|
|
2015
|
32
|
|
$
|
51.51
|
|
Dow Employee Stock Purchase Plan
|
2017
|
||||
Shares in thousands
|
Shares
|
Exercise Price
1
|
|||
Outstanding and exercisable at Jan 1, 2017
|
—
|
|
$
|
—
|
|
Granted
|
3,578
|
|
$
|
50.22
|
|
Exercised
|
(3,560
|
)
|
$
|
50.22
|
|
Forfeited/Expired
|
(18
|
)
|
$
|
50.22
|
|
Outstanding and exercisable at Dec 31, 2017
|
—
|
|
$
|
—
|
|
Additional Information about Dow Employee Stock Purchase Plan
|
|
|
|
||||||
In millions, except per share amounts
|
2017
|
2016
|
2015
|
||||||
Weighted-average fair value per share of purchase rights granted
|
$
|
10.70
|
|
$
|
3.40
|
|
$
|
4.62
|
|
Total compensation expense for ESPP
|
$
|
38
|
|
$
|
7
|
|
$
|
15
|
|
Related tax benefit
|
$
|
14
|
|
$
|
3
|
|
$
|
5
|
|
Total amount of cash received from the exercise of purchase rights
|
$
|
179
|
|
$
|
86
|
|
$
|
131
|
|
Total intrinsic value of purchase rights exercised
1
|
$
|
48
|
|
$
|
23
|
|
$
|
25
|
|
Related tax benefit
|
$
|
18
|
|
$
|
9
|
|
$
|
9
|
|
DuPont Weighted-Average Assumptions
|
2017
|
|
Dividend yield
|
2.2
|
%
|
Expected volatility
|
23.59
|
%
|
Risk-free interest rate
|
2.1
|
%
|
Expected life of stock options granted during period (years)
|
7.2
|
|
DuPont Stock Options
|
2017
|
|||||
Shares in thousands
|
Shares
|
Exercise Price
1
|
||||
Outstanding at Sep 1, 2017
|
16,447
|
|
$
|
48.24
|
|
|
Granted
|
174
|
|
$
|
45.29
|
|
|
Exercised
|
(702
|
)
|
$
|
43.07
|
|
|
Forfeited/Expired
|
(30
|
)
|
$
|
54.83
|
|
|
Outstanding at Dec 31, 2017
|
15,889
|
|
$
|
48.43
|
|
|
Remaining contractual life in years
|
|
|
3.74
|
|
||
Aggregate intrinsic value in millions
|
$
|
362
|
|
|
|
|
Exercisable at Dec 31, 2017
|
10,881
|
|
$
|
45.75
|
|
|
Remaining contractual life in years
|
|
|
3.06
|
|
||
Aggregate intrinsic value in millions
|
$
|
277
|
|
|
|
Fair Value of Financial Instruments at Dec 31
|
2017
|
2016
|
||||||||||||||||||||||
In millions
|
Cost
|
Gain
|
Loss
|
Fair Value
|
Cost
|
Gain
|
Loss
|
Fair Value
|
||||||||||||||||
Marketable securities
1
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt
2
|
$
|
637
|
|
$
|
13
|
|
$
|
(11
|
)
|
$
|
639
|
|
$
|
607
|
|
$
|
13
|
|
$
|
(12
|
)
|
$
|
608
|
|
Corporate bonds
|
704
|
|
32
|
|
(3
|
)
|
733
|
|
623
|
|
27
|
|
(5
|
)
|
645
|
|
||||||||
Total debt securities
|
$
|
1,341
|
|
$
|
45
|
|
$
|
(14
|
)
|
$
|
1,372
|
|
$
|
1,230
|
|
$
|
40
|
|
$
|
(17
|
)
|
$
|
1,253
|
|
Equity securities
|
164
|
|
2
|
|
(26
|
)
|
140
|
|
658
|
|
98
|
|
(50
|
)
|
706
|
|
||||||||
Total marketable securities and other investments
|
$
|
1,509
|
|
$
|
47
|
|
$
|
(40
|
)
|
$
|
1,516
|
|
$
|
1,888
|
|
$
|
138
|
|
$
|
(67
|
)
|
$
|
1,959
|
|
Long-term debt including debt due within one year
3
|
$
|
(32,123
|
)
|
$
|
69
|
|
$
|
(2,121
|
)
|
$
|
(34,175
|
)
|
$
|
(21,091
|
)
|
$
|
129
|
|
$
|
(1,845
|
)
|
$
|
(22,807
|
)
|
Derivatives relating to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates
|
$
|
—
|
|
$
|
—
|
|
$
|
(4
|
)
|
$
|
(4
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
(5
|
)
|
Commodities
4
|
$
|
—
|
|
$
|
130
|
|
$
|
(256
|
)
|
$
|
(126
|
)
|
$
|
—
|
|
$
|
56
|
|
$
|
(213
|
)
|
$
|
(157
|
)
|
Foreign currency
|
$
|
—
|
|
$
|
31
|
|
$
|
(159
|
)
|
$
|
(128
|
)
|
$
|
—
|
|
$
|
84
|
|
$
|
(30
|
)
|
$
|
54
|
|
Investing Results
|
|
|
|
||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Proceeds from sales of available-for-sale securities
|
$
|
1,078
|
|
$
|
535
|
|
$
|
565
|
|
Gross realized gains
|
$
|
120
|
|
$
|
58
|
|
$
|
96
|
|
Gross realized losses
|
$
|
(10
|
)
|
$
|
(2
|
)
|
$
|
(14
|
)
|
Temporarily Impaired Securities at
Dec 31, 2017
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
|||||||||||||
In millions
|
||||||||||||||||||
Government debt
1
|
$
|
295
|
|
$
|
(4
|
)
|
$
|
151
|
|
$
|
(7
|
)
|
$
|
446
|
|
$
|
(11
|
)
|
Corporate bonds
|
163
|
|
(2
|
)
|
19
|
|
(1
|
)
|
182
|
|
(3
|
)
|
||||||
Equity securities
|
7
|
|
(2
|
)
|
63
|
|
(24
|
)
|
70
|
|
(26
|
)
|
||||||
Total temporarily impaired securities
|
$
|
465
|
|
$
|
(8
|
)
|
$
|
233
|
|
$
|
(32
|
)
|
$
|
698
|
|
$
|
(40
|
)
|
Temporarily Impaired Securities at
Dec 31, 2016
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
|||||||||||||
In millions
|
||||||||||||||||||
Government debt
1
|
$
|
351
|
|
$
|
(12
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
351
|
|
$
|
(12
|
)
|
Corporate bonds
|
193
|
|
(4
|
)
|
16
|
|
(1
|
)
|
209
|
|
(5
|
)
|
||||||
Equity securities
|
48
|
|
(6
|
)
|
163
|
|
(44
|
)
|
211
|
|
(50
|
)
|
||||||
Total temporarily impaired securities
|
$
|
592
|
|
$
|
(22
|
)
|
$
|
179
|
|
$
|
(45
|
)
|
$
|
771
|
|
$
|
(67
|
)
|
Notional Amounts
|
Dec 31, 2017
|
Dec 31, 2016
|
||||
In millions
|
||||||
Derivatives designated as hedging instruments:
|
|
|
||||
Interest rate swaps
|
$
|
185
|
|
$
|
245
|
|
Foreign currency contracts
|
$
|
8,414
|
|
$
|
4,053
|
|
Derivatives not designated as hedging instruments:
|
|
|
||||
Foreign currency contracts
|
$
|
24,685
|
|
$
|
12,388
|
|
Commodity Gross Aggregate Notional Amounts
|
Dec 31, 2017
|
Dec 31, 2016
|
Notional Volume Unit
|
||
Derivatives designated as hedging instruments:
|
|
|
|
||
Corn
|
64.3
|
|
0.4
|
|
million bushels
|
Crude Oil
|
4.2
|
|
0.6
|
|
million barrels
|
Ethane
|
10.4
|
|
3.6
|
|
million barrels
|
Natural Gas
|
363.3
|
|
78.6
|
|
million British thermal units
|
Propane
|
8.9
|
|
1.5
|
|
million barrels
|
Soybeans
|
36.6
|
|
—
|
|
million bushels
|
Derivatives not designated as hedging instruments:
|
|
|
|
||
Ethane
|
1.9
|
|
2.6
|
|
million barrels
|
Gasoline
|
—
|
|
30
|
kilotons
|
|
Naphtha Price Spread
|
60
|
50
|
kilotons
|
||
Normal Butane
|
0.2
|
|
—
|
|
million barrels
|
Propane
|
1.8
|
|
2.7
|
million barrels
|
|
Soybeans
|
0.3
|
—
|
|
million bushels
|
|
Soybean Oil
|
2.5
|
—
|
|
million pounds
|
|
Soybean Meal
|
8.2
|
—
|
|
kilotons
|
Fair Value of Derivative Instruments
|
Dec 31, 2017
|
|||||||||
In millions
|
Balance Sheet Classification
|
Gross
|
Counterparty and Cash Collateral Netting
1
|
Net Amounts Included in the Consolidated Balance Sheet
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
51
|
|
$
|
(46
|
)
|
$
|
5
|
|
Commodity contracts
|
Other current assets
|
20
|
|
(4
|
)
|
16
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
70
|
|
(5
|
)
|
65
|
|
|||
Total
|
|
$
|
141
|
|
$
|
(55
|
)
|
$
|
86
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
121
|
|
$
|
(95
|
)
|
$
|
26
|
|
Commodity contracts
|
Other current assets
|
50
|
|
(5
|
)
|
45
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
7
|
|
(3
|
)
|
4
|
|
|||
Total
|
|
$
|
178
|
|
$
|
(103
|
)
|
$
|
75
|
|
Total asset derivatives
|
|
$
|
319
|
|
$
|
(158
|
)
|
$
|
161
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
||||||
Interest rate swaps
|
Other noncurrent obligations
|
$
|
4
|
|
$
|
—
|
|
$
|
4
|
|
Foreign currency contracts
|
Accrued and other current liabilities
|
109
|
|
(46
|
)
|
63
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
96
|
|
(15
|
)
|
81
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
143
|
|
(12
|
)
|
131
|
|
|||
Total
|
|
$
|
352
|
|
$
|
(73
|
)
|
$
|
279
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
186
|
|
$
|
(90
|
)
|
$
|
96
|
|
Commodity contracts
|
Accrued and other current liabilities
|
45
|
|
(6
|
)
|
39
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
8
|
|
(3
|
)
|
5
|
|
|||
Total
|
|
$
|
239
|
|
$
|
(99
|
)
|
$
|
140
|
|
Total liability derivatives
|
|
$
|
591
|
|
$
|
(172
|
)
|
$
|
419
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between Dow and DuPont and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Fair Value of Derivative Instruments
|
Dec 31, 2016
|
|||||||||
In millions
|
Balance Sheet Classification
1
|
Gross
|
Counterparty and Cash Collateral Netting
2
|
Net Amounts Included in the Consolidated Balance Sheet
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
90
|
|
$
|
(47
|
)
|
$
|
43
|
|
Commodity contracts
|
Other current assets
|
42
|
|
(14
|
)
|
28
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
10
|
|
(3
|
)
|
7
|
|
|||
Total
|
|
$
|
142
|
|
$
|
(64
|
)
|
$
|
78
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
103
|
|
$
|
(62
|
)
|
$
|
41
|
|
Commodity contracts
|
Other current assets
|
13
|
|
(2
|
)
|
11
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
12
|
|
(2
|
)
|
10
|
|
|||
Total
|
|
$
|
128
|
|
$
|
(66
|
)
|
$
|
62
|
|
Total asset derivatives
|
|
$
|
270
|
|
$
|
(130
|
)
|
$
|
140
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
||||||
Interest rate swaps
|
Accrued and other current liabilities
|
$
|
3
|
|
$
|
—
|
|
$
|
3
|
|
Interest rate swaps
|
Other noncurrent obligations
|
2
|
|
—
|
|
2
|
|
|||
Foreign currency contracts
|
Accrued and other current liabilities
|
55
|
|
(47
|
)
|
8
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
32
|
|
(14
|
)
|
18
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
196
|
|
(3
|
)
|
193
|
|
|||
Total
|
|
$
|
288
|
|
$
|
(64
|
)
|
$
|
224
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
||||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
84
|
|
$
|
(62
|
)
|
$
|
22
|
|
Commodity contracts
|
Accrued and other current liabilities
|
4
|
|
(2
|
)
|
2
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
2
|
|
(2
|
)
|
—
|
|
|||
Total
|
|
$
|
90
|
|
$
|
(66
|
)
|
$
|
24
|
|
Total liability derivatives
|
|
$
|
378
|
|
$
|
(130
|
)
|
$
|
248
|
|
1.
|
Updated to conform with the current year presentation.
|
2.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between Dow and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Effect of Derivative Instruments
|
Amount of gain (loss) recognized in OCI
1
(Effective portion)
|
Amount of gain (loss) recognized in income
2, 3
|
Income Statement Classification
|
||||||||||||||||
In millions
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
|||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
—
|
|
$
|
—
|
|
Interest expense and amortization of debt discount
4
|
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
2
|
|
2
|
|
2
|
|
4
|
|
6
|
|
9
|
|
Interest expense and amortization of debt discount
4
|
||||||
Foreign currency contracts
|
(30
|
)
|
8
|
|
123
|
|
7
|
|
(5
|
)
|
68
|
|
Cost of sales
|
||||||
Foreign currency contracts
|
(5
|
)
|
25
|
|
—
|
|
(17
|
)
|
(13
|
)
|
—
|
|
Sundry income (expense) - net
|
||||||
Commodity contracts
|
38
|
|
55
|
|
(247
|
)
|
7
|
|
(28
|
)
|
(91
|
)
|
Cost of sales
|
||||||
Net investment hedges:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
(73
|
)
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Total derivatives designated as hedging instruments
|
$
|
(68
|
)
|
$
|
95
|
|
$
|
(122
|
)
|
$
|
(1
|
)
|
$
|
(40
|
)
|
$
|
(14
|
)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(198
|
)
|
$
|
(180
|
)
|
$
|
(318
|
)
|
Sundry income (expense) - net
|
Commodity contracts
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
6
|
|
4
|
|
Cost of sales
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(207
|
)
|
$
|
(174
|
)
|
$
|
(314
|
)
|
|
Total derivatives
|
$
|
(68
|
)
|
$
|
95
|
|
$
|
(122
|
)
|
$
|
(208
|
)
|
$
|
(214
|
)
|
$
|
(328
|
)
|
|
1.
|
OCI is defined as "Other comprehensive income (loss)."
|
2.
|
For cash flow hedges, this represents the effective portion of the gain (loss) reclassified from AOCL into income during the period. For the years ended
December 31, 2017
,
2016
and
2015
, there was no material ineffectiveness with regard to the Company's cash flow hedges.
|
3.
|
Pretax amounts.
|
4.
|
Gain recognized in income of derivative is offset to
zero
by gain (loss) recognized in income of the hedged item.
|
Basis of Fair Value Measurements on a Recurring Basis
|
Dec 31, 2017
|
Dec 31, 2016
|
||||||||||||||||||||||
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Assets at fair value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
1
|
$
|
—
|
|
$
|
7,485
|
|
$
|
—
|
|
$
|
7,485
|
|
$
|
—
|
|
$
|
4,173
|
|
$
|
—
|
|
$
|
4,173
|
|
Marketable securities
2
|
—
|
|
956
|
|
—
|
|
956
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Interests in trade accounts receivable conduits
3
|
—
|
|
—
|
|
677
|
|
677
|
|
—
|
|
—
|
|
1,237
|
|
1,237
|
|
||||||||
Equity securities
4
|
88
|
|
52
|
|
—
|
|
140
|
|
619
|
|
87
|
|
—
|
|
706
|
|
||||||||
Debt securities:
4
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt
5
|
—
|
|
639
|
|
—
|
|
639
|
|
—
|
|
608
|
|
—
|
|
608
|
|
||||||||
Corporate bonds
|
—
|
|
733
|
|
—
|
|
733
|
|
—
|
|
645
|
|
—
|
|
645
|
|
||||||||
Derivatives relating to:
6
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodities
|
47
|
|
100
|
|
—
|
|
147
|
|
48
|
|
29
|
|
—
|
|
77
|
|
||||||||
Foreign currency
|
—
|
|
172
|
|
—
|
|
172
|
|
—
|
|
193
|
|
—
|
|
193
|
|
||||||||
Total assets at fair value
|
$
|
135
|
|
$
|
10,137
|
|
$
|
677
|
|
$
|
10,949
|
|
$
|
667
|
|
$
|
5,735
|
|
$
|
1,237
|
|
$
|
7,639
|
|
Liabilities at fair value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term debt
7
|
$
|
—
|
|
$
|
34,175
|
|
$
|
—
|
|
$
|
34,175
|
|
$
|
—
|
|
$
|
22,807
|
|
$
|
—
|
|
$
|
22,807
|
|
Derivatives relating to:
6
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates
|
—
|
|
4
|
|
—
|
|
4
|
|
—
|
|
5
|
|
—
|
|
5
|
|
||||||||
Commodities
|
31
|
|
261
|
|
—
|
|
292
|
|
20
|
|
214
|
|
—
|
|
234
|
|
||||||||
Foreign currency
|
—
|
|
295
|
|
—
|
|
295
|
|
—
|
|
139
|
|
—
|
|
139
|
|
||||||||
Total liabilities at fair value
|
$
|
31
|
|
$
|
34,735
|
|
$
|
—
|
|
$
|
34,766
|
|
$
|
20
|
|
$
|
23,165
|
|
$
|
—
|
|
$
|
23,185
|
|
1.
|
Treasury bills, time deposits, and money market funds included in "Cash and cash equivalents" and money market funds included in "Other currents assets" in the consolidated balance sheets are held at amortized cost, which approximates fair value.
|
2.
|
Primarily time deposits with maturities of greater than three months at time of acquisition.
|
3.
|
Included in "Accounts and notes receivable - Other" in the consolidated balance sheets. See Note
14
for additional information on transfers of financial assets.
|
4.
|
The Company’s investments in equity and debt securities are primarily classified as available-for-sale and are included in “Other investments” in the consolidated balance sheets.
|
5.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
|
6.
|
See Note
21
for the classification of derivatives in the consolidated balance sheets.
|
7.
|
See Note
21
for information on fair value measurements of long-term debt.
|
1.
|
Included in "Accounts and notes receivable - Other" in the consolidated balance sheets.
|
2.
|
Included in "Selling, general and administrative expenses" in the consolidated statements of income.
|
Basis of Fair Value Measurements on a Nonrecurring Basis at Dec 31
|
Quoted Prices in Active Markets for Identical Items (Level 1)
|
Significant Other Unobservable Inputs
(Level 3)
|
Total Losses
|
||||||
In millions
|
|||||||||
2017
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, intangible assets, other assets and equity method investments
|
$
|
—
|
|
$
|
61
|
|
$
|
(1,226
|
)
|
Goodwill
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,491
|
)
|
2016
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, other assets and equity method investments
|
$
|
46
|
|
$
|
—
|
|
$
|
(296
|
)
|
2015
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, equity method investments, investments and other assets
|
$
|
—
|
|
$
|
24
|
|
$
|
(313
|
)
|
1.
|
All assets were restricted at
December 31, 2017
and
December 31, 2016
.
|
2.
|
All liabilities were nonrecourse at
December 31, 2017
and
December 31, 2016
|
•
|
EQUATE - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol; and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned
42.5
percent by the Company.
|
•
|
The Kuwait Olefins Company K.S.C. ("TKOC") - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned
42.5
percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited - effective ownership is
32.77 percent
of which the Company directly owns
20.27
percent (aligned with Industrial Intermediates & Infrastructure) and indirectly owns
12.5 percent
through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited (both part of The SCG-Dow Group and aligned with Packaging & Specialty Plastics). This Thailand-based company manufactures propylene and ethylene
.
|
•
|
Sadara - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned
35 percent
by the Company.
|
•
|
The Kuwait Styrene Company K.S.C. - a Kuwait-based company that manufactures styrene monomer; owned
42.5 percent
by the Company.
|
•
|
The SCG-Dow Group consists of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Co., Ltd.; and Siam Synthetic Latex Company Limited. These Thailand-based companies manufacture polyethylene, polystyrene, styrene and latex; owned
50 percent
by the Company.
|
•
|
EQUATE - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol; and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned
42.5 percent
by the Company.
|
•
|
TKOC - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned
42.5
percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited - effective ownership is
32.77 percent
of which the Company directly owns
20.27
percent (aligned with Industrial Intermediates & Infrastructure) and indirectly owns
12.5 percent
through its equity interest in Siam Polyethylene Company Limited and Siam Synthetic Latex Company Limited (both part of The SCG-Dow Group and aligned with Packaging & Specialty Plastics). This Thailand-based company manufactures propylene and ethylene
.
|
•
|
Sadara - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned
35 percent
by the Company.
|
Geographic Region Information
|
United States
|
EMEA
|
Rest of World
|
Total
|
||||||||
In millions
|
||||||||||||
2017
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
21,210
|
|
$
|
18,069
|
|
$
|
23,205
|
|
$
|
62,484
|
|
Long-lived assets
|
$
|
23,274
|
|
$
|
6,252
|
|
$
|
6,721
|
|
$
|
36,247
|
|
2016
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
16,681
|
|
$
|
13,633
|
|
$
|
17,844
|
|
$
|
48,158
|
|
Long-lived assets
|
$
|
14,812
|
|
$
|
2,708
|
|
$
|
5,966
|
|
$
|
23,486
|
|
2015
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
16,865
|
|
$
|
14,288
|
|
$
|
17,625
|
|
$
|
48,778
|
|
Long-lived assets
|
$
|
11,062
|
|
$
|
2,137
|
|
$
|
4,655
|
|
$
|
17,854
|
|
Segment Information
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
7,516
|
|
$
|
8,783
|
|
$
|
12,647
|
|
$
|
21,456
|
|
$
|
3,356
|
|
$
|
2,812
|
|
$
|
2,521
|
|
$
|
3,006
|
|
$
|
387
|
|
$
|
62,484
|
|
Pro forma net sales
|
14,342
|
|
8,740
|
|
12,640
|
|
22,392
|
|
4,775
|
|
5,980
|
|
5,131
|
|
5,142
|
|
393
|
|
79,535
|
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
1
|
134
|
|
1,578
|
|
17
|
|
716
|
|
125
|
|
1
|
|
2
|
|
53
|
|
654
|
|
3,280
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
3
|
|
394
|
|
172
|
|
189
|
|
3
|
|
13
|
|
(1
|
)
|
2
|
|
(11
|
)
|
764
|
|
||||||||||
Pro forma Operating EBITDA
2
|
2,611
|
|
2,121
|
|
2,282
|
|
4,698
|
|
1,486
|
|
1,302
|
|
1,319
|
|
1,190
|
|
(843
|
)
|
16,166
|
|
||||||||||
Depreciation and amortization
|
427
|
|
903
|
|
604
|
|
911
|
|
297
|
|
248
|
|
183
|
|
266
|
|
130
|
|
3,969
|
|
||||||||||
Total assets
|
45,569
|
|
15,532
|
|
12,113
|
|
25,809
|
|
14,400
|
|
25,357
|
|
14,712
|
|
15,452
|
|
23,220
|
|
192,164
|
|
||||||||||
Investment in nonconsolidated affiliates
|
333
|
|
769
|
|
1,699
|
|
1,184
|
|
530
|
|
203
|
|
76
|
|
359
|
|
183
|
|
5,336
|
|
||||||||||
Capital expenditures
|
310
|
|
448
|
|
295
|
|
1,965
|
|
135
|
|
157
|
|
74
|
|
186
|
|
—
|
|
3,570
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
6,173
|
|
$
|
6,412
|
|
$
|
10,832
|
|
$
|
18,404
|
|
$
|
2,307
|
|
$
|
975
|
|
$
|
897
|
|
$
|
1,877
|
|
$
|
281
|
|
$
|
48,158
|
|
Pro forma net sales
|
14,060
|
|
6,362
|
|
10,820
|
|
19,848
|
|
4,266
|
|
5,763
|
|
4,497
|
|
4,984
|
|
294
|
|
70,894
|
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
1
|
5
|
|
42
|
|
83
|
|
10
|
|
—
|
|
1
|
|
—
|
|
(3
|
)
|
457
|
|
595
|
|
||||||||||
Asbestos-related charge
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,113
|
|
1,113
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
5
|
|
303
|
|
(18
|
)
|
137
|
|
24
|
|
10
|
|
8
|
|
1
|
|
(28
|
)
|
442
|
|
||||||||||
Pro forma Operating EBITDA
2
|
2,322
|
|
1,228
|
|
1,672
|
|
5,129
|
|
1,173
|
|
1,227
|
|
1,045
|
|
1,130
|
|
(812
|
)
|
14,114
|
|
||||||||||
Depreciation and amortization
|
186
|
|
685
|
|
649
|
|
770
|
|
217
|
|
64
|
|
49
|
|
121
|
|
121
|
|
2,862
|
|
||||||||||
Total assets
4
|
6,960
|
|
16,871
|
|
11,649
|
|
17,837
|
|
6,932
|
|
1,246
|
|
1,807
|
|
2,833
|
|
13,376
|
|
79,511
|
|
||||||||||
Investment in nonconsolidated affiliates
4
|
84
|
|
939
|
|
1,588
|
|
881
|
|
—
|
|
30
|
|
—
|
|
7
|
|
218
|
|
3,747
|
|
||||||||||
Capital expenditures
|
222
|
|
405
|
|
232
|
|
2,731
|
|
79
|
|
31
|
|
16
|
|
88
|
|
—
|
|
3,804
|
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
6,327
|
|
$
|
4,517
|
|
$
|
13,691
|
|
$
|
18,357
|
|
$
|
1,987
|
|
$
|
1,029
|
|
$
|
583
|
|
$
|
1,938
|
|
$
|
349
|
|
$
|
48,778
|
|
Restructuring, goodwill impairment and asset related charges - net
1
|
16
|
|
80
|
|
—
|
|
69
|
|
51
|
|
16
|
|
—
|
|
33
|
|
294
|
|
559
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
3
|
|
205
|
|
226
|
|
220
|
|
62
|
|
6
|
|
20
|
|
1
|
|
(69
|
)
|
674
|
|
||||||||||
Operating EBITDA
5
|
833
|
|
606
|
|
2,425
|
|
4,812
|
|
583
|
|
130
|
|
156
|
|
400
|
|
(257
|
)
|
9,688
|
|
||||||||||
Depreciation and amortization
|
180
|
|
308
|
|
752
|
|
747
|
|
213
|
|
68
|
|
25
|
|
119
|
|
109
|
|
2,521
|
|
||||||||||
Total assets
4, 6
|
6,123
|
|
8,899
|
|
9,829
|
|
14,310
|
|
5,993
|
|
1,382
|
|
544
|
|
2,467
|
|
18,391
|
|
67,938
|
|
||||||||||
Investment in nonconsolidated affiliates
4
|
85
|
|
1,677
|
|
155
|
|
304
|
|
—
|
|
34
|
|
—
|
|
7
|
|
1,696
|
|
3,958
|
|
||||||||||
Capital expenditures
|
307
|
|
188
|
|
254
|
|
2,683
|
|
78
|
|
32
|
|
11
|
|
150
|
|
—
|
|
3,703
|
|
1.
|
See Note
5
for information regarding the Company's restructuring programs and other asset related charges.
|
2.
|
A reconciliation of "Income from continuing operations, net of tax" to pro forma Operating EBITDA is provided in the table on the following page.
|
3.
|
See Note
16
for information regarding the asbestos-related charge.
|
4.
|
Equity contributions to Sadara were reflected in Corporate in 2015, and were reallocated to Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics in 2016.
|
5.
|
A reconciliation of "Income from continuing operations, net of tax" to Operating EBITDA is provided in the table on the following page.
|
6.
|
Presented in accordance with ASU 2015-17.
|
Reconciliation of "Income from continuing operations, net of tax" to Pro Forma Operating EBITDA
|
2017
|
2016
|
||||
In millions
|
||||||
Income from continuing operations, net of tax
|
$
|
1,669
|
|
$
|
4,404
|
|
+ Provision (Credit) for income taxes on continuing operations
|
(476
|
)
|
9
|
|
||
Income from continuing operations before income taxes
|
$
|
1,193
|
|
$
|
4,413
|
|
+ Depreciation and amortization
|
3,969
|
|
2,862
|
|
||
- Interest income
1
|
147
|
|
107
|
|
||
+ Interest expense and amortization of debt discount
|
1,082
|
|
858
|
|
||
- Foreign exchange gains (losses), net
1
|
(63
|
)
|
(126
|
)
|
||
+ Pro forma adjustments
|
3,179
|
|
4,298
|
|
||
Pro forma EBITDA
|
$
|
9,339
|
|
$
|
12,450
|
|
- Adjusted significant items
2
|
(6,827
|
)
|
(1,664
|
)
|
||
Pro forma Operating EBITDA
|
$
|
16,166
|
|
$
|
14,114
|
|
1.
|
Included in "Sundry income (expense) - net."
|
2.
|
Significant items, excluding the impact of one-time transaction costs directly attributable to the Merger and reflected in the pro forma adjustments.
|
1.
|
Included in "Sundry income (expense) - net."
|
Adjusted Significant Items by Segment for 2017
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Gains on sales of businesses/entities
1
|
$
|
635
|
|
$
|
—
|
|
$
|
—
|
|
$
|
227
|
|
$
|
—
|
|
$
|
162
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7
|
|
$
|
1,031
|
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,499
|
)
|
(1,499
|
)
|
||||||||||
Merger-related inventory step-up amortization
3
|
(425
|
)
|
—
|
|
—
|
|
(120
|
)
|
(144
|
)
|
(404
|
)
|
(212
|
)
|
(178
|
)
|
—
|
|
(1,483
|
)
|
||||||||||
Litigation related charges, awards and adjustments
4
|
(469
|
)
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(332
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
5
|
(134
|
)
|
(1,578
|
)
|
(17
|
)
|
(716
|
)
|
(128
|
)
|
(7
|
)
|
(6
|
)
|
(318
|
)
|
(690
|
)
|
(3,594
|
)
|
||||||||||
Settlement and curtailment items
6
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(892
|
)
|
(892
|
)
|
||||||||||
Transaction costs and productivity actions
7
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(58
|
)
|
(58
|
)
|
||||||||||
Total
|
$
|
(393
|
)
|
$
|
(1,578
|
)
|
$
|
(17
|
)
|
$
|
(472
|
)
|
$
|
(272
|
)
|
$
|
(249
|
)
|
$
|
(218
|
)
|
$
|
(496
|
)
|
$
|
(3,132
|
)
|
$
|
(6,827
|
)
|
1.
|
Includes the sale of the DAS Divested Ag Business (
$635 million
), the sale of Dow's EAA Business (
$227 million
), the sale of DuPont's global food safety diagnostic business (
$162 million
) and post-closing adjustments on the split-off of Dow's chlorine value chain (
$7 million
). See Notes
4
and
6
for additional information.
|
2.
|
Integration and separation costs related to the Merger, post-Merger integration and Intended Business Separation activities, and costs related to the ownership restructure of Dow Corning.
|
3.
|
Includes the fair value step-up of DuPont's inventories as a result of the Merger and the acquisition of the H&N Business of
$1,469 million
and the amortization of a basis difference related to the fair value step-up of inventories of
$14 million
. See Note
3
for additional information.
|
4.
|
Includes an arbitration matter with Bayer CropScience (
$469 million
charge) and a patent infringement matter with Nova Chemicals Corporation (
$137 million
gain). See Note
16
for additional information.
|
5.
|
Includes Board approved restructuring plans, goodwill impairment, and asset related charges, which includes other asset impairments. See Note
5
for additional information.
|
6.
|
Includes a settlement charge related to the payment of plan obligations to certain participants of a Dow U.S. non-qualified pension plan as a result of the Merger. See Note
19
for additional information.
|
7.
|
Includes implementation costs associated with Dow's restructuring programs and other productivity actions.
|
Adjusted Significant Items by Segment for 2016
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Asbestos-related charge
1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,113
|
)
|
$
|
(1,113
|
)
|
Charge for the termination of a terminal use agreement
2
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
||||||||||
Settlement and curtailment items
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
382
|
|
382
|
|
||||||||||
Customer claims adjustment/
recovery
4
|
53
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
53
|
|
||||||||||
Environmental charges
5
|
(2
|
)
|
—
|
|
(1
|
)
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(290
|
)
|
(295
|
)
|
||||||||||
Gains on sales of businesses/entities
6
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
369
|
|
375
|
|
||||||||||
Impact of Dow Corning ownership restructure
7
|
—
|
|
1,389
|
|
—
|
|
—
|
|
438
|
|
—
|
|
279
|
|
—
|
|
—
|
|
2,106
|
|
||||||||||
Integration and separation costs
8
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(476
|
)
|
(476
|
)
|
||||||||||
Litigation related charges, awards and adjustments
9
|
—
|
|
16
|
|
(1,235
|
)
|
—
|
|
4
|
|
—
|
|
7
|
|
—
|
|
—
|
|
(1,208
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
10
|
(96
|
)
|
(42
|
)
|
(83
|
)
|
(10
|
)
|
(2
|
)
|
(162
|
)
|
(7
|
)
|
—
|
|
(774
|
)
|
(1,176
|
)
|
||||||||||
Transaction costs and productivity actions
11
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(195
|
)
|
(195
|
)
|
||||||||||
Total
|
$
|
(45
|
)
|
$
|
1,363
|
|
$
|
(1,313
|
)
|
$
|
(129
|
)
|
$
|
440
|
|
$
|
(162
|
)
|
$
|
279
|
|
$
|
—
|
|
$
|
(2,097
|
)
|
$
|
(1,664
|
)
|
1.
|
Pretax charge related to Dow's election to change its method of accounting for asbestos-related defense costs from expensing as incurred to estimating and accruing a liability. As a result of this accounting policy change, Dow recorded a pretax charge of
$1,009 million
for asbestos-related defense costs through the terminal date of 2049. Dow also recorded a pretax charge of
$104 million
to increase the asbestos-related liability for pending and future claims through the terminal date of 2049. See Note
16
for additional information.
|
2.
|
Pretax charge related to Dow's termination of a terminal use agreement.
|
3.
|
Pretax curtailment gain related to changes to DuPont's U.S. pension plan and U.S. other postretirement benefits plan.
|
4.
|
Includes a reduction in customer claims accrual (
$23 million
) and insurance recoveries for recovery of costs for customer claims (
$30 million
) related to the use of DuPont's IMPRELIS® herbicide.
|
5.
|
Pretax charge for environmental remediation activities at a number of historical Dow locations, primarily resulting from the culmination of negotiations with regulators and/or final agency approval. See Note
16
for additional information.
|
6.
|
Includes a gain for post-closing adjustments on the split-off of the chlorine value chain (
$6 million
) and the sale of the DuPont (Shenzhen) Manufacturing Limited entity (
$369 million
).
|
7.
|
Includes a non-taxable gain of
$2,445 million
related to the Dow Corning ownership restructure; a
$317 million
charge for the fair value step-up of inventories; and, a pretax loss of
$22 million
related to the early redemption of debt incurred by Dow Corning. See Note
3
for additional information.
|
8.
|
Integration and separation costs related to the Merger and the ownership restructure of Dow Corning.
|
9.
|
Includes a loss of
$1,235 million
related to Dow's settlement of the urethane matters class action lawsuit and the opt-out cases litigation and a gain of
$27 million
related to a decrease in Dow Corning's implant liability. See Note
16
for additional information.
|
10.
|
Includes Dow and DuPont restructuring activities. See Note
5
for additional information. Also includes a pretax charge related to AgroFresh, including a partial impairment of Dow’s investment in AFSI (
$143 million
) and post-closing adjustments related to non-cash consideration (
$20 million
); a pretax charge for the write-down of DuPont's indefinite lived intangible assets (
$158 million
) related to the realignment of brand marketing strategies and a determination to phase out the use of certain acquired tradenames; and, a pretax charge related to the write-down of DuPont's uncompleted enterprise resource planning system (
$435 million
).
|
11.
|
Includes implementation costs associated with Dow's restructuring programs and other productivity actions of
$162 million
and a charge of
$33 million
for a retained litigation matter related to the chlorine value chain.
|
Significant Items by Segment for 2015
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Gains on sales of businesses/entities
1
|
$
|
—
|
|
$
|
—
|
|
$
|
3,409
|
|
$
|
317
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
550
|
|
$
|
4,276
|
|
Gain on Univation step acquisition
2
|
—
|
|
—
|
|
—
|
|
349
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
349
|
|
||||||||||
Integration and separation costs
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
(23
|
)
|
||||||||||
Joint venture actions
4
|
—
|
|
20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(56
|
)
|
(36
|
)
|
||||||||||
Loss on early extinguishment of
debt
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
(8
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
6
|
(16
|
)
|
(80
|
)
|
—
|
|
(69
|
)
|
(51
|
)
|
(16
|
)
|
—
|
|
(33
|
)
|
(294
|
)
|
(559
|
)
|
||||||||||
Transaction costs and productivity actions
7
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(171
|
)
|
(171
|
)
|
||||||||||
Total
|
$
|
(16
|
)
|
$
|
(60
|
)
|
$
|
3,409
|
|
$
|
597
|
|
$
|
(51
|
)
|
$
|
(16
|
)
|
$
|
—
|
|
$
|
(33
|
)
|
$
|
(2
|
)
|
$
|
3,828
|
|
1.
|
Includes a pretax gain of
$2,233 million
on the October 5, 2015, split-off of Dow's chlorine value chain to Olin. See Note
6
for additional information. Also includes pretax gains from the sale of Dow's equity interest in MEGlobal to EQUATE (
$723 million
) and the divestitures of ANGUS (
$682 million
), AgroFresh (
$618 million
) and SBH (
$20 million
). See Note
4
for additional information.
|
2.
|
Includes a pretax gain related to the step acquisition of Univation, previously a
50
:50 joint venture (
$361 million
) and a pretax loss related to the fair value step-up of inventories assumed in the step acquisition (
$12 million
). See Note
3
for additional information.
|
3.
|
Integration and separation costs related to the Merger and the ownership restructure of Dow Corning.
|
4.
|
Includes actions taken by Dow's joint ventures including: a
$20 million
pretax gain related to Dow Corning's adjustment of its implant liability, a
$29 million
charge related to AgroFresh Solutions' fair value step-up of its inventories and start-up costs, and a
$27 million
charge related to Sadara's write-off of design engineering work for an Epoxy plant.
|
5.
|
Includes a pretax loss on the early extinguishment of debt.
|
6.
|
Includes Dow restructuring activities. See Note
5
for additional information. Also includes pretax charges for asset impairments and related costs, including the shutdown of manufacturing assets and facilities in the Safety & Construction and Packaging & Specialty Plastics businesses; the abandonment of certain capital projects in the Safety & Construction and Coatings & Performance Monomers businesses; and, the impairment of an equity method investment aligned with the Coatings & Performance Monomers business.
|
7.
|
Includes implementation costs associated with Dow's restructuring programs and other productivity actions.
|
Selected Quarterly Financial Data
|
2017
1
|
||||||||||||||
In millions, except per share amounts (Unaudited)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
Net Sales
|
$
|
13,230
|
|
$
|
13,834
|
|
$
|
15,354
|
|
$
|
20,066
|
|
$
|
62,484
|
|
Gross margin
2
|
$
|
3,033
|
|
$
|
3,071
|
|
$
|
3,184
|
|
$
|
2,782
|
|
$
|
12,070
|
|
Restructuring, goodwill impairment and asset related charges, net
3
|
$
|
(1
|
)
|
$
|
(12
|
)
|
$
|
179
|
|
$
|
3,114
|
|
$
|
3,280
|
|
Integration and separation costs
|
$
|
109
|
|
$
|
136
|
|
$
|
354
|
|
$
|
502
|
|
$
|
1,101
|
|
Income (loss) from continuing operations, net of tax
4
|
$
|
915
|
|
$
|
1,359
|
|
$
|
554
|
|
$
|
(1,159
|
)
|
$
|
1,669
|
|
Net income (loss) attributable to DowDuPont Inc.
|
$
|
888
|
|
$
|
1,321
|
|
$
|
514
|
|
$
|
(1,263
|
)
|
$
|
1,460
|
|
Earnings (loss) per common share from continuing operations - basic
5
|
$
|
0.74
|
|
$
|
1.08
|
|
$
|
0.33
|
|
$
|
(0.52
|
)
|
$
|
0.97
|
|
Earnings (loss) per common share from continuing operations - diluted
5, 6
|
$
|
0.72
|
|
$
|
1.07
|
|
$
|
0.33
|
|
$
|
(0.52
|
)
|
$
|
0.95
|
|
Dividends declared per share of common stock
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.38
|
|
$
|
1.76
|
|
Market price range of common stock:
|
|
|
|
|
|
||||||||||
High
|
$
|
65.00
|
|
$
|
65.26
|
|
$
|
70.41
|
|
$
|
73.32
|
|
$
|
73.32
|
|
Low
|
$
|
57.09
|
|
$
|
60.20
|
|
$
|
63.11
|
|
$
|
68.57
|
|
$
|
57.09
|
|
|
|
|
|
|
|
||||||||||
|
2016
1
|
||||||||||||||
In millions, except per share amounts (Unaudited)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
Net Sales
|
$
|
10,703
|
|
$
|
11,952
|
|
$
|
12,483
|
|
$
|
13,020
|
|
$
|
48,158
|
|
Gross margin
2
|
$
|
2,752
|
|
$
|
2,677
|
|
$
|
2,643
|
|
$
|
2,446
|
|
$
|
10,518
|
|
Restructuring, goodwill impairment and asset related charges, net
3
|
$
|
(2
|
)
|
$
|
454
|
|
$
|
—
|
|
$
|
143
|
|
$
|
595
|
|
Integration and separation costs
|
$
|
34
|
|
$
|
67
|
|
$
|
127
|
|
$
|
121
|
|
$
|
349
|
|
Asbestos-related charge
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,113
|
|
$
|
1,113
|
|
Income from continuing operations, net of tax
7
|
$
|
275
|
|
$
|
3,227
|
|
$
|
818
|
|
$
|
84
|
|
$
|
4,404
|
|
Net income attributable to DowDuPont Inc.
|
$
|
254
|
|
$
|
3,208
|
|
$
|
804
|
|
$
|
52
|
|
$
|
4,318
|
|
Earnings (loss) per common share from continuing operations - basic
5, 8
|
$
|
0.15
|
|
$
|
2.79
|
|
$
|
0.64
|
|
$
|
(0.03
|
)
|
$
|
3.57
|
|
Earnings (loss) per common share from continuing operations - diluted
5, 6, 9
|
$
|
0.15
|
|
$
|
2.61
|
|
$
|
0.63
|
|
$
|
(0.03
|
)
|
$
|
3.52
|
|
Dividends declared per share of common stock
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
1.84
|
|
Market price range of common stock:
|
|
|
|
|
|
||||||||||
High
|
$
|
52.23
|
|
$
|
53.98
|
|
$
|
54.59
|
|
$
|
59.33
|
|
$
|
59.33
|
|
Low
|
$
|
40.26
|
|
$
|
47.75
|
|
$
|
47.51
|
|
$
|
51.60
|
|
$
|
40.26
|
|
1.
|
The Merger closed on August 31, 2017. Financial information for 2017 reflects the results of Dow for all periods presented and the results of DuPont beginning on and after September 1, 2017.
|
2.
|
Previously reported amounts have been updated for reclassifications made to "Integration and separation costs."
|
3.
|
See Note
5
for additional information.
|
4.
|
See Notes
3
,
7
,
8
,
13
,
16
and
19
for additional information on items materially impacting "Income (loss) from continuing operations, net of tax." The fourth quarter of 2017 included: the effects of The Act, enacted on December 22, 2017; Merger-related amortization of the fair value step-up of inventories; a gain related to the DAS Divested Ag Business; and a charge related to payment of plan obligations to certain participants of a Dow U.S. non-qualified pension plan. The third quarter of 2017 included a gain related to the sale of Dow's EAA Business and Merger-related amortization of the fair value step-up of inventories. The second quarter of 2017 included a gain related to the Nova patent infringement award. The first quarter of 2017 included a loss related to the Bayer CropScience arbitration matter.
|
5.
|
Due to quarterly changes in the share count and the allocation of income to participating securities, the sum of the four quarters does not equal the earnings per share amount calculated for the year.
|
6.
|
"Earnings (loss) per common share - diluted" for the three-month periods ended December 31, 2017 and 2016, was calculated using "Weighted average common shares outstanding - basic" due to a net loss reported in the period.
|
7.
|
The second quarter of 2016 was impacted by the gain related to the Dow Corning ownership restructure. See Note
3
for further information.
|
8.
|
On December 30, 2016, Dow converted
4 million
shares of Cumulative Convertible Perpetual Preferred Stock, Series A ("Preferred Stock") into
96.8 million
shares of Dow's common stock. As a result, the basic share count reflects a two-day averaging effect for the three- and twelve-month periods ended December 31, 2016.
|
9.
|
For the quarter ended June 30, 2016, an assumed conversion of Dow's Preferred Stock into shares of Dow's common stock was included in the calculation of earnings per common share - diluted. The assumed conversion of Dow's Preferred Stock was considered antidilutive for all other periods. See Note
9
for additional information.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
|
/s/ EDWARD D. BREEN
|
|
|
|
/s/ HOWARD I. UNGERLEIDER
|
Edward D. Breen
|
|
|
|
Howard I. Ungerleider
|
Chief Executive Officer
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
/s/ JEANMARIE F. DESMOND
|
|
|
|
/s/ RONALD C. EDMONDS
|
Jeanmarie F. Desmond
|
|
|
|
Ronald C. Edmonds
|
Co-Controller, Wilmington, Delaware
|
|
|
|
Co-Controller, Midland, Michigan
|
/s/ DELOITTE & TOUCHE
LLP
|
Deloitte & Touche
LLP
|
Midland, Michigan
|
February 15, 2018
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
The Company’s
2017
Consolidated Financial Statements are included in Part II, Item 8. Financial Statements and Supplementary Data.
|
(2)
|
Financial Statement Schedules – The following Financial Statement Schedule should be read in conjunction with the Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm included in Part II, Item 8. Financial Statements and Supplementary Data:
|
(3)
|
Exhibits – See the Exhibit Index for the exhibits filed with this Annual Report on Form 10-K or incorporated by reference. The following exhibits are filed with this Annual Report on Form 10-K:
|
Exhibit No.
|
Description of Exhibit
|
2.1
|
2.1.1
|
3.1
|
3.2
|
10.1
|
10.2
|
10.3
|
10.4
|
10.5
|
10.5.1
|
10.5.2
|
10.5.3
|
10.6
|
10.6.1
|
10.7
|
10.8
|
10.9
|
10.10
|
10.11
|
10.12
|
10.13
|
10.14
|
21*
|
23.1*
|
23.2*
|
23.3*
|
31.1*
|
31.2*
|
32.1*
|
32.2*
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
DowDuPont Inc.
|
Schedule II
|
|
Valuation and Qualifying Accounts
|
|
(In millions) For the year ended Dec 31,
|
2017
|
2016
|
2015
|
||||||
Accounts Receivable - Allowance for Doubtful Receivables
|
|
|
|
||||||
Balance at beginning of period
|
$
|
110
|
|
$
|
94
|
|
$
|
110
|
|
Additions charged to expenses
|
43
|
|
31
|
|
24
|
|
|||
Additions charged to other accounts
1
|
3
|
|
—
|
|
2
|
|
|||
Deductions from reserves
2
|
(29
|
)
|
(15
|
)
|
(42
|
)
|
|||
Balance at end of period
|
$
|
127
|
|
$
|
110
|
|
$
|
94
|
|
Inventory - Obsolescence Reserve
|
|
|
|
||||||
Balance at beginning of period
|
$
|
123
|
|
$
|
152
|
|
$
|
135
|
|
Additions charged to expenses
|
129
|
|
29
|
|
63
|
|
|||
Deductions from reserves
3
|
(82
|
)
|
(58
|
)
|
(46
|
)
|
|||
Balance at end of period
|
$
|
170
|
|
$
|
123
|
|
$
|
152
|
|
Reserves for Other Investments and Noncurrent Receivables
|
|
|
|
||||||
Balance at beginning of period
|
$
|
358
|
|
$
|
494
|
|
$
|
477
|
|
Additions charged to expenses
4
|
83
|
|
153
|
|
108
|
|
|||
Deductions from reserves
5
|
(4
|
)
|
(289
|
)
|
(91
|
)
|
|||
Balance at end of period
|
$
|
437
|
|
$
|
358
|
|
$
|
494
|
|
Deferred Tax Assets - Valuation Allowance
|
|
|
|
||||||
Balance at beginning of period
|
$
|
1,061
|
|
$
|
1,000
|
|
$
|
1,106
|
|
Merger impact
|
1,323
|
|
|
|
|||||
Additions charged to expenses
|
454
|
|
155
|
|
67
|
|
|||
Deductions from reserves
|
(89
|
)
|
(94
|
)
|
(173
|
)
|
|||
Balance at end of period
|
$
|
2,749
|
|
$
|
1,061
|
|
$
|
1,000
|
|
1.
|
Additions to reserves for doubtful receivables charged to other accounts were classified as "Accounts and notes receivable - Other" in the consolidated balance sheets. These reserves relate to Dow's sale of trade accounts receivable. Anticipated credit losses in the portfolio of receivables sold are used to fair value Dow's interests held in trade accounts receivable conduits. See Notes
14
and
22
to the Consolidated Financial Statements for further information.
|
2.
|
Deductions include write-offs, recoveries, currency translation adjustment and other miscellaneous items.
|
3.
|
Deductions include disposals and currency translation adjustments.
|
4.
|
In 2016, additions to reserves for "Other investments and noncurrent receivables" charged to costs and expenses include
$143 million
related to the Company's investment in AgroFresh Solutions, Inc. See Note
5
to the Consolidated Financial Statements for further information.
|
5.
|
In 2016, deductions from reserves for "Other investments and noncurrent receivables" include
$237 million
related to the DCC Transaction. See Note
3
to the Consolidated Financial Statements for further information.
|
/s/ JEANMARIE F. DESMOND
|
|
/s/ RONALD C. EDMONDS
|
Jeanmarie F. Desmond
|
|
Ronald C. Edmonds
|
Co-Controller, Wilmington, Delaware
|
|
Co-Controller, Midland, Michigan
|
February 15, 2018
|
|
February 15, 2018
|
/s/ LAMBERTO ANDREOTTI
|
|
/s/ RAYMOND J. MILCHOVICH
|
Lamberto Andreotti, Director
|
|
Raymond J. Milchovich, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ JAMES A. BELL
|
|
/s/ PAUL POLMAN
|
James A. Bell, Director
|
|
Paul Polman, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ EDWARD D. BREEN
|
|
/s/ DENNIS H. REILLEY
|
Edward D. Breen, Director, Chief Executive Officer
|
|
Dennis H. Reilley, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ ROBERT A. BROWN
|
|
/s/ JAMES M. RINGLER
|
Robert A. Brown, Director
|
|
James M. Ringler, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ ALEXANDER M. CUTLER
|
|
/s/ RUTH G. SHAW
|
Alexander M. Cutler, Co-Lead Independent Director
|
|
Ruth G. Shaw, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ JEFF M. FETTIG
|
|
/s/ LEE M. THOMAS
|
Jeff M. Fettig, Co-Lead Independent Director
|
|
Lee M. Thomas, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ MARILLYN A. HEWSON
|
|
/s/ HOWARD I. UNGERLEIDER
|
Marillyn A. Hewson, Director
|
|
Howard I. Ungerleider, Chief Financial Officer
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ LOIS D. JULIBER
|
|
/s/ PATRICK J. WARD
|
Lois D. Juliber, Director
|
|
Patrick J. Ward, Director
|
February 15, 2018
|
|
February 15, 2018
|
|
|
|
/s/ ANDREW N. LIVERIS
|
|
|
Andrew N. Liveris, Executive Chairman of the Board
|
|
|
February 15, 2018
|
|
|
DowDuPont Inc.
|
Trademark Listing
|
|
DowDuPont Inc.
|
EXHIBIT 21
|
|
SUBSIDIARIES OF THE REGISTRANT
|
|
|
Organized Under
Laws Of
|
Dow Subsidiaries
|
|
The Dow Chemical Company
|
Delaware
|
3294027 Nova Scotia Company
|
Canada
|
Agrigenetics, Inc.
|
Delaware
|
Alforex Seeds LLC
|
Delaware
|
Amerchol Corporation
|
Delaware
|
Chemars III LLC
|
Delaware
|
Chemtech Portfolio Inc.
|
Texas
|
Coodetec Desenvolvimento, Producao e Comercializacao Agricola Ltda.
|
Brazil
|
CUPOSIT Electronic Materials Zhangjiagang Co., Ltd.
|
China
|
Dairyland Seed Co., Inc.
|
Wisconsin
|
DCOMCO, Inc.
|
Delaware
|
Dorinco Reinsurance Company
|
Michigan
|
Dorintal Reinsurance Limited
|
Vermont
|
Dow AgroSciences (China) Company Limited
|
China
|
Dow AgroSciences (Malaysia) Sdn Bhd
|
Malaysia
|
Dow AgroSciences (Thailand) Limited
|
Thailand
|
Dow AgroSciences A.S.
|
Turkey
|
Dow AgroSciences Argentina S.R.L.
|
Argentina
|
Dow AgroSciences Australia Limited
|
Australia
|
Dow AgroSciences B.V.
|
Netherlands
|
Dow AgroSciences Bolivia S.A.
|
Bolivia
|
Dow AgroSciences Canada Inc.
|
Canada
|
Dow AgroSciences Chile S.A.
|
Chile
|
Dow AgroSciences Danmark A/S
|
Denmark
|
Dow AgroSciences de Colombia S.A.
|
Colombia
|
Dow AgroSciences de Mexico S.A. de C.V.
|
Mexico
|
Dow AgroSciences Distribution S.A.S.
|
France
|
Dow AgroSciences India Pvt. Ltd.
|
India
|
Dow AgroSciences Industrial Ltda.
|
Brazil
|
Dow AgroSciences Italia s.r.l.
|
Italy
|
Dow AgroSciences Japan Limited
|
Japan
|
Dow AgroSciences Limited
|
United Kingdom
|
Dow AgroSciences LLC
|
Delaware
|
Dow AgroSciences Pacific Limited
|
Hong Kong
|
Dow AgroSciences Paraguay S.A.
|
Paraguay
|
Dow AgroSciences Polska Sp. z o.o.
|
Poland
|
Dow AgroSciences S.A.S.
|
France
|
Dow AgroSciences s.r.o.
|
Czech Republic
|
Dow AgroSciences Southern Africa (Proprietary) Limited
|
South Africa
|
Dow AgroSciences Switzerland S.A.
|
Switzerland
|
Dow Benelux B.V.
|
Netherlands
|
Dow Brasil Industria e Comercio de Produtos Quimicos Ltda.
|
Brazil
|
Dow Brasil Sudeste Industrial Ltda.
|
Brazil
|
Dow Chemical (Australia) Pty Ltd
|
Australia
|
Dow Chemical (China) Investment Company Limited
|
China
|
Dow Chemical (Shanghai) Company Limited
|
China
|
Dow Chemical (Sichuan) Co., Ltd.
|
China
|
Dow Chemical (Zhangjiagang) Company Limited
|
China
|
Dow Chemical Canada ULC
|
Canada
|
Dow Chemical Company Limited
|
United Kingdom
|
Dow Chemical Iberica S.L.
|
Spain
|
Dow Chemical International Private Limited
|
India
|
Dow Chemical Japan Limited
|
Japan
|
Dow Chemical Korea Limited
|
Korea
|
Dow Chemical OLED Ltd.
|
Korea
|
Dow Chemical OOO
|
Russia
|
Dow Chemical Pacific (Singapore) Private Limited
|
Singapore
|
Dow Chemical Pacific Limited
|
Hong Kong
|
Dow Chemical Thailand Ltd.
|
Thailand
|
Dow Corning (China) Holding Company Ltd.
|
China
|
Dow Corning (Shanghai) Co., Ltd.
|
China
|
Dow Corning (Thailand) Limited
|
Thailand
|
Dow Corning (Zhangjiagang) Co., Ltd.
|
China
|
Dow Corning (Zhangjiagang) Holding Company Limited
|
China
|
Dow Corning (Zhangjiagang) Silicone Co. Ltd.
|
China
|
Dow Corning Alabama, Inc.
|
Delaware
|
Dow Corning Canada Inc.
|
Canada
|
Dow Corning Corporation
|
Michigan
|
Dow Corning de Mexico S.A. de C.V.
|
Mexico
|
Dow Corning do Brasil, Limitada
|
Brazil
|
Dow Corning Enterprises, LLC
|
Delaware
|
Dow Corning France S.A.S.
|
France
|
Dow Corning India Private Limited
|
India
|
Dow Corning Korea, Ltd.
|
Korea
|
Dow Corning Limited
|
United Kingdom
|
Dow Corning S.r.l.
|
Italy
|
Dow Corning Singapore Pte. Ltd.
|
Singapore
|
Dow Corning Taiwan Inc.
|
Taiwan
|
Dow Corning Toray Company, Ltd.
|
Japan
|
Dow Deutschland Anlagengesellschaft mbH
|
Germany
|
Dow Deutschland Inc.
|
Delaware
|
Dow Europe GmbH
|
Switzerland
|
Dow Europe Holding B.V.
|
Netherlands
|
Dow Financial Services Inc.
|
Delaware
|
Dow France S.A.S.
|
France
|
Dow Global Technologies LLC
|
Delaware
|
Dow Hydrocarbons and Resources LLC
|
Delaware
|
Dow Internacional Mexicana S.A. de C.V.
|
Mexico
|
Dow International Finance S.a r.l.
|
Luxembourg
|
Dow International Holdings S.A.
|
Switzerland
|
Dow Investment Argentina S.R.L.
|
Argentina
|
Dow Italia Divisione Commerciale s.r.l.
|
Italy
|
Dow Italia s.r.l.
|
Italy
|
Dow Izolan OOO
|
Russia
|
Dow Kakoh Kabushiki Kaisha
|
Japan
|
Dow Olefinverbund GmbH
|
Germany
|
Dow Portugal Produtos Quimicos, Unipessoal, Lda.
|
Portugal
|
Dow Produktions und Vertriebs GmbH & Co. OHG
|
Germany
|
Dow Quimica Argentina S.R.L.
|
Argentina
|
Dow Quimica de Colombia S.A.
|
Colombia
|
Dow Quimica Mexicana S.A. de C.V.
|
Mexico
|
Dow Roofing Systems LLC
|
Delaware
|
Dow Saudi Arabia Holding B.V.
|
Netherlands
|
Dow Saudi Arabia Product Marketing B.V.
|
Netherlands
|
Dow Silicones Belgium SPRL
|
Belgium
|
Dow Silicones Deutschland GmbH
|
Germany
|
Dow Southern Africa (Pty) Ltd
|
South Africa
|
Dow Specialties Limited
|
Saudi Arabia
|
Dow Stade Produktions GmbH & Co. OHG
|
Germany
|
Dow Suomi OY
|
Finland
|
Dow Sverige AB
|
Sweden
|
Dow Switzerland Holding GmbH
|
Switzerland
|
Dow Thames Limited
|
United Kingdom
|
Dow Turkiye Kimya Sanayi ve Ticaret Limited Sirketi
|
Turkey
|
Essex Specialty Products LLC
|
New Jersey
|
FilmTec Corporation
|
Delaware
|
Flexible Products Company
|
Georgia
|
Fort Saskatchewan Ethylene Storage Limited Partnership
|
Canada
|
Multibase S.A.
|
France
|
Multibase, Inc.
|
Delaware
|
Mycogen Corporation
|
California
|
Mycogen Seeds-Puerto Rico Corporation
|
Delaware
|
Nitta Haas Incorporated
|
Japan
|
Nitta Haas Trading Company
|
Japan
|
OMEX Overseas Holdings Inc.
|
Virgin Islands
|
Palmyra do Brasil Indústria e Comércio de Silício Metálico e Recursos Naturais Ltda.
|
Brazil
|
Palmyra Recursos Naturais Exploracao e Comercio
|
Brazil
|
PBBPolisur S.R.L.
|
Argentina
|
Petroquimica-Dow S.A. (Petrodow)
|
Chile
|
Pfister Seeds LLC
|
Delaware
|
Phytogen Seed Company, LLC
|
Delaware
|
Prairie Brand Seeds LLC
|
Delaware
|
PT Dow AgroSciences Indonesia
|
Indonesia
|
PT Dow Indonesia
|
Indonesia
|
ROH Delaware, LP
|
Delaware
|
ROH Venture GmbH
|
Germany
|
Rohm and Haas Australia Pty. Ltd.
|
Australia
|
Rohm and Haas Canada Investments ULC
|
Canada
|
Rohm and Haas Canada LP
|
Canada
|
Rohm and Haas Chemical (Thailand) Limited
|
Thailand
|
Rohm and Haas Chemicals LLC
|
Delaware
|
Rohm and Haas Company
|
Delaware
|
Rohm and Haas Denmark Finance A/S
|
Denmark
|
Rohm and Haas Electronic Materials (Dongguan) Co., Ltd.
|
China
|
Rohm and Haas Electronic Materials (Shanghai) Co., Ltd.
|
China
|
Rohm and Haas Electronic Materials Asia Limited
|
Hong Kong
|
Rohm and Haas Electronic Materials Asia-Pacific Co., Ltd.
|
Taiwan
|
Rohm and Haas Electronic Materials CMP Asia Inc.
|
Delaware
|
Rohm and Haas Electronic Materials CMP Inc.
|
Delaware
|
Rohm and Haas Electronic Materials CMP Korea Ltd.
|
Korea
|
Rohm and Haas Electronic Materials CMP Sdn. Bhd.
|
Malaysia
|
Rohm and Haas Electronic Materials K.K.
|
Japan
|
Rohm and Haas Electronic Materials Korea Ltd.
|
Korea
|
Rohm and Haas Electronic Materials LLC
|
Delaware
|
Rohm and Haas Electronic Materials Singapore Pte. Ltd.
|
Singapore
|
Rohm and Haas Electronic Materials Taiwan Ltd.
|
Taiwan
|
Rohm and Haas International Trading (Shanghai) Co. Ltd.
|
China
|
Rohm and Haas Italia S.r.l.
|
Italy
|
Rohm and Haas Mexico, S. de R.L. de C.V.
|
Mexico
|
Rohm and Haas Quimica Ltda.
|
Brazil
|
Rohm and Haas Shanghai Chemical Industry Co., Ltd.
|
China
|
Rohm and Haas Singapore (Pte.) Ltd.
|
Singapore
|
Rohm and Haas Taiwan, Inc.
|
Taiwan
|
Rohm and Haas Texas Incorporated
|
Texas
|
Rohm and Haas Wood Treatment LLC
|
Delaware
|
Specialty Electronic Materials UK Limited
|
United Kingdom
|
Union Carbide Corporation
|
New York
|
Univation (Zhangjiagang) Chemical Company Limited
|
China
|
Univation Technologies, LLC
|
Delaware
|
Valley Asset Leasing, LLC
|
Delaware
|
Zhejiang OMEX Environmental Engineering Co., Ltd.
|
China
|
Zhejiang Pacific Chemical Corporation
|
China
|
DuPont Subsidiaries
|
Organized Under
Laws Of |
E.I. du Pont de Nemours and Company
|
Delaware
|
Belco Technologies Corporation
|
Delaware
|
DPC (Luxembourg) SARL
|
Luxembourg
|
DPNL BV
|
The Netherlands
|
Du Pont (Australia) PTY LTD.
|
Australia
|
Du Pont Agricultural Chemicals Ltd., Shanghai
|
China
|
Du Pont China Limited (US)
|
Delaware
|
Du Pont de Nemours (Belgium) BVBA
|
Belgium
|
Du Pont de Nemours Italiana S.r.l.
|
Italy
|
Du Pont Feedstocks Company
|
Delaware
|
DuPont (China) Research & Development and Management Co., Ltd.
|
China
|
DuPont (Korea) Inc.
|
Korea
|
DuPont (Thailand) Limited
|
Thailand
|
DuPont (U.K.) Industrial Limited
|
United Kingdom
|
DuPont (U.K.) Limited
|
United Kingdom
|
DuPont (U.K.) Ltd.
|
United Kingdom
|
DuPont Acquisition (Luxembourg) S.a.r.l.
|
Luxembourg
|
DuPont Acquisition, LLC
|
Delaware
|
DuPont Apollo (Shenzhen) Limited
|
China
|
DuPont Argentina S.R.L.
|
Argentina
|
DuPont Asturias, S.L.
|
Spain
|
DuPont Belgium North America Finance Company
|
Belgium
|
DuPont BVco BV
|
The Netherlands
|
DuPont Capital Management Corporation
|
Delaware
|
DuPont Chemical and Energy Operations, Inc.
|
Delaware
|
DuPont China Holding Company Ltd.
|
China
|
DuPont China Limited
|
Hong Kong
|
DuPont Company (Singapore) Pte Ltd.
|
Singapore
|
DuPont Contern (Luxembourg) SARL
|
Luxembourg
|
DuPont Coordination Center N.V.
|
Belgium
|
DuPont DACI Beteiligungs-GmbH
|
Austria
|
DuPont de Nemours (Deutschland) GmbH
|
Germany
|
DuPont de Nemours (France) S.A.S.
|
France
|
DuPont de Nemours (Luxembourg) S.a.r.l.
|
Luxembourg
|
DuPont de Nemours (Luxembourg) SARL
|
Luxembourg
|
DuPont de Nemours (Nederland) B.V.
|
The Netherlands
|
DuPont de Nemours Groupe SAS
|
France
|
DuPont de Nemours Holding Sarl (LLC)
|
Switzerland
|
DuPont de Nemours International S.a.r.l.
|
Switzerland
|
DuPont de Nemours International Sarl
|
Switzerland
|
DuPont Denmark Holding ApS
|
Denmark
|
DuPont Deutschland Holding GmbH & Co. KG
|
Germany
|
DuPont do Brasil S.A.
|
Brazil
|
DuPont Eastern Europe BV
|
The Netherlands
|
DuPont Electronic Polymers LP
|
Delaware
|
DuPont Electronics Microcircuits Industries, Ltd.
|
Bermuda
|
DuPont Energy Company, LLC
|
Delaware
|
DuPont Global Operations, Inc.
|
Delaware
|
DuPont Iberica, S.L.
|
Spain
|
DuPont International (Luxembourg) SCA
|
Luxembourg
|
DuPont International B.V.
|
The Netherlands
|
DuPont International Operations S.a r.l.
|
Switzerland
|
DuPont Kabushiki Kaisha
|
Japan
|
DuPont KGA B.V.
|
The Netherlands
|
DuPont Mexico S.A. de C.V.
|
Mexico
|
DuPont Nutrition Biosciences ApS
|
Denmark
|
DuPont Nutrition USA, Inc.
|
Delaware
|
DuPont Operations Worldwide, Inc.
|
Delaware
|
DuPont Operations, Inc.
|
Delaware
|
DuPont Products (Luxembourg) SARL
|
Luxembourg
|
DuPont Science (Luxembourg) S.a r.l.
|
Luxembourg
|
DuPont Solutions (Luxembourg) SARL
|
Luxembourg
|
DuPont Specialty Products Kabushiki Kaisha
|
Japan
|
DuPont Taiwan Limited
|
Taiwan
|
DuPont Technology (Luxembourg) S.a.r.l.
|
Luxembourg
|
DuPont Teijin Films China LTD.
|
Hong Kong
|
DuPont Trading (Shanghai) Co., Ltd.
|
China
|
DuPont Xingda Filaments Company Limited
|
China
|
E.I. DuPont Canada Company
|
Canada
|
E.I. DuPont Canada- Thetford Inc.
|
Canada
|
E.I. DuPont India Private Limited
|
India
|
EKC Technology, Inc.
|
California
|
FCC Acquisition Corporation
|
California
|
FMC Biopolymer AS
|
Norway
|
FMC Manufacturing Limited
|
Ireland
|
Hickory Holdings, Inc.
|
Delaware
|
Howson Algraphy BV
|
The Netherlands
|
MECS Inc.
|
Delaware
|
Pioneer Hi-Bred International, Inc.
|
Iowa
|
Shenzhen DuPont Performance Materials Investment Co., Ltd.
|
China
|
Solae L.L.C.
|
Delaware
|
SP EMEA Holding 7 B.V.
|
The Netherlands
|
SP Luxembourg, LLC
|
Delaware
|
Spruance Genco, LLC
|
Delaware
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.1
|
|
|
|
/s/ DELOITTE & TOUCHE
LLP
|
Deloitte & Touche
LLP
|
Midland, Michigan
|
February 15, 2018
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.2
|
|
|
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
PricewaterhouseCoopers LLP
|
Philadelphia, Pennsylvania
|
February 15, 2018
|
|
Ankura Consulting Group, LLC's Consent
|
EXHIBIT 23.3
|
|
|
|
Form S-8:
|
|
|
|
Nos.
|
333-220330
|
|
333-220324
|
/s/ B. THOMAS FLORENCE
|
B. Thomas Florence
|
Senior Managing Director
|
Ankura Consulting Group, LLC
|
February 15, 2018
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 31.1
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of DowDuPont Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ EDWARD D. BREEN
|
Edward D. Breen
|
Chief Executive Officer
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 31.2
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of DowDuPont Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ HOWARD I. UNGERLEIDER
|
Howard I. Ungerleider
|
Chief Financial Officer
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 32.1
|
|
|
|
|
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended
December 31, 2017
as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ EDWARD D. BREEN
|
Edward D. Breen
|
Chief Executive Officer
|
February 15, 2018
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 32.2
|
|
|
|
|
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended
December 31, 2017
as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ HOWARD I. UNGERLEIDER
|
Howard I. Ungerleider
|
Chief Financial Officer
|
February 15, 2018
|