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
|
2211 H.H. Dow Way, Midland, MI 48674
|
|
974 Centre Road, Wilmington, DE 19805
|
(989) 636-1000
|
|
(302) 774-1000
|
2030 Dow Center, Midland, MI 48674
|
|
|
|
Large accelerated filer
|
|
þ
|
|
Accelerated filer
|
|
¨
|
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
PAGE
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
|
||
|
||
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
DowDuPont Inc.
|
PART I - FINANCIAL INFORMATION
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions, except per share amounts (Unaudited)
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
24,245
|
|
$
|
13,834
|
|
$
|
45,755
|
|
$
|
27,064
|
|
Cost of sales
|
17,974
|
|
10,761
|
|
34,289
|
|
20,955
|
|
||||
Research and development expenses
|
803
|
|
408
|
|
1,571
|
|
827
|
|
||||
Selling, general and administrative expenses
|
1,933
|
|
720
|
|
3,647
|
|
1,479
|
|
||||
Amortization of intangibles
|
488
|
|
157
|
|
962
|
|
312
|
|
||||
Restructuring and asset related charges (credits) - net
|
189
|
|
(12
|
)
|
451
|
|
(13
|
)
|
||||
Integration and separation costs
|
558
|
|
136
|
|
1,015
|
|
245
|
|
||||
Equity in earnings of nonconsolidated affiliates
|
250
|
|
54
|
|
507
|
|
250
|
|
||||
Sundry income (expense) - net
|
178
|
|
322
|
|
293
|
|
(122
|
)
|
||||
Interest expense and amortization of debt discount
|
360
|
|
226
|
|
710
|
|
445
|
|
||||
Income from continuing operations before income taxes
|
2,368
|
|
1,814
|
|
3,910
|
|
2,942
|
|
||||
Provision for income taxes on continuing operations
|
565
|
|
455
|
|
954
|
|
668
|
|
||||
Income from continuing operations, net of tax
|
1,803
|
|
1,359
|
|
2,956
|
|
2,274
|
|
||||
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
||||
Net income
|
1,803
|
|
1,359
|
|
2,951
|
|
2,274
|
|
||||
Net income attributable to noncontrolling interests
|
35
|
|
38
|
|
79
|
|
65
|
|
||||
Net income available for DowDuPont Inc. common stockholders
|
$
|
1,768
|
|
$
|
1,321
|
|
$
|
2,872
|
|
$
|
2,209
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Per common share data:
|
|
|
|
|
||||||||
Earnings per common share from continuing operations - basic
|
$
|
0.76
|
|
$
|
1.08
|
|
$
|
1.24
|
|
$
|
1.82
|
|
Loss per common share from discontinued operations - basic
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Earnings per common share - basic
|
$
|
0.76
|
|
$
|
1.08
|
|
$
|
1.24
|
|
$
|
1.82
|
|
Earnings per common share from continuing operations - diluted
|
$
|
0.76
|
|
$
|
1.07
|
|
$
|
1.23
|
|
$
|
1.79
|
|
Loss per common share from discontinued operations - diluted
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Earnings per common share - diluted
|
$
|
0.76
|
|
$
|
1.07
|
|
$
|
1.23
|
|
$
|
1.79
|
|
|
|
|
|
|
||||||||
Dividends declared per share of common stock
|
$
|
0.76
|
|
$
|
0.46
|
|
$
|
1.14
|
|
$
|
0.92
|
|
Weighted-average common shares outstanding - basic
|
2,308.9
|
|
1,211.8
|
|
2,312.9
|
|
1,207.2
|
|
||||
Weighted-average common shares outstanding - diluted
|
2,323.6
|
|
1,229.0
|
|
2,329.0
|
|
1,225.5
|
|
||||
|
|
|
|
|
||||||||
Depreciation
|
$
|
940
|
|
$
|
534
|
|
$
|
1,893
|
|
$
|
1,112
|
|
Capital expenditures
|
$
|
810
|
|
$
|
795
|
|
$
|
1,586
|
|
$
|
1,549
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions (Unaudited)
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net income
|
$
|
1,803
|
|
$
|
1,359
|
|
$
|
2,951
|
|
$
|
2,274
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
||||||||
Unrealized gains (losses) on investments
|
(14
|
)
|
(9
|
)
|
(39
|
)
|
8
|
|
||||
Cumulative translation adjustments
|
(2,393
|
)
|
387
|
|
(1,060
|
)
|
626
|
|
||||
Pension and other postretirement benefit plans
|
127
|
|
101
|
|
257
|
|
203
|
|
||||
Derivative instruments
|
102
|
|
(39
|
)
|
119
|
|
(89
|
)
|
||||
Total other comprehensive income (loss)
|
(2,178
|
)
|
440
|
|
(723
|
)
|
748
|
|
||||
Comprehensive income (loss)
|
(375
|
)
|
1,799
|
|
2,228
|
|
3,022
|
|
||||
Comprehensive income attributable to noncontrolling interests, net of tax
|
2
|
|
40
|
|
40
|
|
93
|
|
||||
Comprehensive income (loss) attributable to DowDuPont Inc.
|
$
|
(377
|
)
|
$
|
1,759
|
|
$
|
2,188
|
|
$
|
2,929
|
|
In millions, except per share amounts (Unaudited)
|
Jun 30, 2018
|
Dec 31, 2017
|
||||
Assets
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents (variable interest entities restricted - 2018: $116; 2017: $107)
|
$
|
9,244
|
|
$
|
13,438
|
|
Marketable securities
|
507
|
|
956
|
|
||
Accounts and notes receivable:
|
|
|
||||
Trade (net of allowance for doubtful receivables - 2018: $156; 2017: $127)
|
15,379
|
|
11,314
|
|
||
Other
|
4,924
|
|
5,579
|
|
||
Inventories
|
15,630
|
|
16,992
|
|
||
Other current assets
|
2,213
|
|
1,614
|
|
||
Total current assets
|
47,897
|
|
49,893
|
|
||
Investments
|
|
|
||||
Investment in nonconsolidated affiliates
|
5,214
|
|
5,336
|
|
||
Other investments (investments carried at fair value - 2018: $1,730; 2017: $1,512)
|
2,538
|
|
2,564
|
|
||
Noncurrent receivables
|
578
|
|
680
|
|
||
Total investments
|
8,330
|
|
8,580
|
|
||
Property
|
|
|
||||
Property
|
73,664
|
|
73,304
|
|
||
Less accumulated depreciation
|
38,440
|
|
37,057
|
|
||
Net property (variable interest entities restricted - 2018: $786; 2017: $907)
|
35,224
|
|
36,247
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
59,404
|
|
59,527
|
|
||
Other intangible assets (net of accumulated amortization - 2018: $6,451; 2017: $5,550)
|
32,102
|
|
33,274
|
|
||
Deferred income tax assets
|
1,701
|
|
1,869
|
|
||
Deferred charges and other assets
|
2,709
|
|
2,774
|
|
||
Total other assets
|
95,916
|
|
97,444
|
|
||
Total Assets
|
$
|
187,367
|
|
$
|
192,164
|
|
Liabilities and Equity
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable
|
$
|
2,794
|
|
$
|
1,948
|
|
Long-term debt due within one year
|
4,606
|
|
2,067
|
|
||
Accounts payable:
|
|
|
||||
Trade
|
7,983
|
|
9,134
|
|
||
Other
|
4,662
|
|
3,727
|
|
||
Income taxes payable
|
874
|
|
843
|
|
||
Accrued and other current liabilities
|
7,191
|
|
8,409
|
|
||
Total current liabilities
|
28,110
|
|
26,128
|
|
||
Long-Term Debt (variable interest entities nonrecourse - 2018: $147; 2017: $249)
|
26,850
|
|
30,056
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
5,885
|
|
6,266
|
|
||
Pension and other postretirement benefits - noncurrent
|
17,694
|
|
18,581
|
|
||
Asbestos-related liabilities - noncurrent
|
1,179
|
|
1,237
|
|
||
Other noncurrent obligations
|
7,767
|
|
7,969
|
|
||
Total other noncurrent liabilities
|
32,525
|
|
34,053
|
|
||
Stockholders' Equity
|
|
|
||||
Common stock (authorized 5,000,000,000 shares of $0.01 par value each;
issued 2018: 2,350,333,589 shares; 2017: 2,341,455,518 shares)
|
24
|
|
23
|
|
||
Additional paid-in capital
|
81,683
|
|
81,257
|
|
||
Retained earnings
|
30,432
|
|
29,211
|
|
||
Accumulated other comprehensive loss
|
(10,732
|
)
|
(8,972
|
)
|
||
Unearned ESOP shares
|
(145
|
)
|
(189
|
)
|
||
Treasury stock at cost (2018: 43,239,857 shares; 2017: 14,123,049 shares)
|
(3,000
|
)
|
(1,000
|
)
|
||
DowDuPont's stockholders' equity
|
98,262
|
|
100,330
|
|
||
Noncontrolling interests
|
1,620
|
|
1,597
|
|
||
Total equity
|
99,882
|
|
101,927
|
|
||
Total Liabilities and Equity
|
$
|
187,367
|
|
$
|
192,164
|
|
|
Six Months Ended
|
|||||
In millions (Unaudited)
|
Jun 30, 2018
|
Jun 30, 2017
|
||||
Operating Activities
|
|
|
||||
Net income
|
$
|
2,951
|
|
$
|
2,274
|
|
Adjustments to reconcile net income to net cash used for operating activities:
|
|
|
||||
Depreciation and amortization
|
2,980
|
|
1,517
|
|
||
Provision (Credit) for deferred income tax
|
(182
|
)
|
40
|
|
||
Earnings of nonconsolidated affiliates less than dividends received
|
199
|
|
310
|
|
||
Net periodic pension benefit cost
|
56
|
|
219
|
|
||
Pension contributions
|
(500
|
)
|
(381
|
)
|
||
Net gain on sales of assets, businesses and investments
|
(67
|
)
|
(190
|
)
|
||
Adjustment to gain on step acquisition of nonconsolidated affiliate
|
41
|
|
—
|
|
||
Restructuring and asset related charges (credits) - net
|
451
|
|
(13
|
)
|
||
Amortization of Merger-related inventory step-up
|
1,385
|
|
—
|
|
||
Other net loss
|
425
|
|
252
|
|
||
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
||||
Accounts and notes receivable
|
(4,454
|
)
|
(3,233
|
)
|
||
Inventories
|
(222
|
)
|
(839
|
)
|
||
Accounts payable
|
65
|
|
826
|
|
||
Other assets and liabilities, net
|
(3,175
|
)
|
(883
|
)
|
||
Cash used for operating activities
|
(47
|
)
|
(101
|
)
|
||
Investing Activities
|
|
|
||||
Capital expenditures
|
(1,586
|
)
|
(1,549
|
)
|
||
Investment in gas field developments
|
(46
|
)
|
(68
|
)
|
||
Proceeds from sales of property and businesses, net of cash divested
|
96
|
|
215
|
|
||
Investments in and loans to nonconsolidated affiliates
|
(2
|
)
|
(484
|
)
|
||
Distributions and loan repayments from nonconsolidated affiliates
|
55
|
|
54
|
|
||
Proceeds from sale of ownership interests in nonconsolidated affiliates
|
—
|
|
54
|
|
||
Purchases of investments
|
(1,891
|
)
|
(379
|
)
|
||
Proceeds from sales and maturities of investments
|
2,328
|
|
435
|
|
||
Proceeds from interests in trade accounts receivable conduits
|
656
|
|
1,914
|
|
||
Cash provided by (used for) investing activities
|
(390
|
)
|
192
|
|
||
Financing Activities
|
|
|
||||
Changes in short-term notes payable
|
800
|
|
288
|
|
||
Proceeds from issuance of long-term debt
|
254
|
|
—
|
|
||
Payments on long-term debt
|
(842
|
)
|
(105
|
)
|
||
Purchases of treasury stock
|
(2,000
|
)
|
—
|
|
||
Proceeds from issuance of company stock
|
142
|
|
—
|
|
||
Proceeds from sales of common stock
|
—
|
|
357
|
|
||
Employee taxes paid for share-based payment arrangements
|
(118
|
)
|
(85
|
)
|
||
Contingent payment for acquisition of businesses
|
—
|
|
(31
|
)
|
||
Distributions to noncontrolling interests
|
(79
|
)
|
(51
|
)
|
||
Dividends paid to stockholders
|
(1,755
|
)
|
(1,063
|
)
|
||
Other financing activities, net
|
(4
|
)
|
—
|
|
||
Cash used for financing activities
|
(3,602
|
)
|
(690
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(171
|
)
|
208
|
|
||
Summary
|
|
|
||||
Decrease in cash, cash equivalents and restricted cash
|
(4,210
|
)
|
(391
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
14,015
|
|
6,624
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
9,805
|
|
$
|
6,233
|
|
In millions, except per share amounts (Unaudited)
|
Common Stock
|
Add'l Paid in Capital
|
Retained Earnings
|
Accum Other Comp Loss
|
Unearned ESOP
|
Treasury Stock
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at Dec 31, 2016
|
$
|
3,107
|
|
$
|
4,262
|
|
$
|
30,338
|
|
$
|
(9,822
|
)
|
$
|
(239
|
)
|
$
|
(1,659
|
)
|
$
|
1,242
|
|
$
|
27,229
|
|
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
2,209
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,209
|
|
||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
748
|
|
—
|
|
—
|
|
—
|
|
748
|
|
||||||||
Dividends ($0.92 per common share)
|
—
|
|
—
|
|
(1,115
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,115
|
)
|
||||||||
Common stock issued/sold
|
—
|
|
357
|
|
—
|
|
—
|
|
—
|
|
626
|
|
—
|
|
983
|
|
||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
(415
|
)
|
—
|
|
—
|
|
41
|
|
—
|
|
—
|
|
(374
|
)
|
||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(74
|
)
|
(74
|
)
|
||||||||
Other
|
—
|
|
(2
|
)
|
(15
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(17
|
)
|
||||||||
Balance at Jun 30, 2017
|
$
|
3,107
|
|
$
|
4,202
|
|
$
|
31,417
|
|
$
|
(9,074
|
)
|
$
|
(198
|
)
|
$
|
(1,033
|
)
|
$
|
1,168
|
|
$
|
29,589
|
|
2018
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at Dec 31, 2017
|
$
|
23
|
|
$
|
81,257
|
|
$
|
29,211
|
|
$
|
(8,972
|
)
|
$
|
(189
|
)
|
$
|
(1,000
|
)
|
$
|
1,597
|
|
$
|
101,927
|
|
Adoption of accounting standards (Note 1)
|
—
|
|
—
|
|
996
|
|
(1,037
|
)
|
—
|
|
—
|
|
—
|
|
(41
|
)
|
||||||||
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
2,872
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,872
|
|
||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
(723
|
)
|
—
|
|
—
|
|
—
|
|
(723
|
)
|
||||||||
Dividends ($1.14 per common share)
|
—
|
|
—
|
|
(2,629
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,629
|
)
|
||||||||
Common stock issued/sold
|
1
|
|
141
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
142
|
|
||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
285
|
|
—
|
|
—
|
|
44
|
|
—
|
|
—
|
|
329
|
|
||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23
|
|
23
|
|
||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,000
|
)
|
—
|
|
(2,000
|
)
|
||||||||
Other
|
—
|
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
||||||||
Balance at Jun 30, 2018
|
$
|
24
|
|
$
|
81,683
|
|
$
|
30,432
|
|
$
|
(10,732
|
)
|
$
|
(145
|
)
|
$
|
(3,000
|
)
|
$
|
1,620
|
|
$
|
99,882
|
|
Note
|
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
Summary of Changes to the Consolidated Statements of Income
|
Three Months Ended Jun 30, 2017
|
|||||||||||
In millions
|
As Filed
|
Merger Reclass
1
|
ASU Impact
2
|
Updated
|
||||||||
Cost of sales
|
$
|
10,764
|
|
$
|
(1
|
)
|
$
|
(2
|
)
|
$
|
10,761
|
|
Research and development expenses
|
$
|
405
|
|
$
|
—
|
|
$
|
3
|
|
$
|
408
|
|
Selling, general and administrative expenses
|
$
|
855
|
|
$
|
(135
|
)
|
$
|
—
|
|
$
|
720
|
|
Integration and separation costs
|
$
|
—
|
|
$
|
136
|
|
$
|
—
|
|
$
|
136
|
|
Sundry income (expense) - net
|
$
|
299
|
|
$
|
22
|
|
$
|
1
|
|
$
|
322
|
|
Interest income
|
$
|
22
|
|
$
|
(22
|
)
|
$
|
—
|
|
$
|
—
|
|
Summary of Changes to the Consolidated Statements of Income
|
Six Months Ended Jun 30, 2017
|
|||||||||||
In millions
|
As Filed
|
Merger Reclass
1
|
ASU Impact
2
|
Updated
|
||||||||
Cost of sales
|
$
|
20,961
|
|
$
|
(1
|
)
|
$
|
(5
|
)
|
$
|
20,955
|
|
Research and development expenses
|
$
|
821
|
|
$
|
—
|
|
$
|
6
|
|
$
|
827
|
|
Selling, general and administrative expenses
|
$
|
1,722
|
|
$
|
(244
|
)
|
$
|
1
|
|
$
|
1,479
|
|
Integration and separation costs
|
$
|
—
|
|
$
|
245
|
|
$
|
—
|
|
$
|
245
|
|
Sundry income (expense) - net
|
$
|
(171
|
)
|
$
|
47
|
|
$
|
2
|
|
$
|
(122
|
)
|
Interest income
|
$
|
47
|
|
$
|
(47
|
)
|
$
|
—
|
|
$
|
—
|
|
1.
|
Costs associated with integration and separation activities are now separately reported as “Integration and separation costs” and were reclassified from "Cost of sales" and “Selling, general and administrative expenses.” In addition, “Interest income” was reclassified to “Sundry income (expense) - net.”
|
2.
|
Reflects changes resulting from the adoption of ASU 2017-07. See Note
2
for additional information.
|
Summary of Changes to the Consolidated Statements of Cash Flows
|
Six Months Ended Jun 30, 2017
|
|||||||||||
In millions
|
As Filed
|
Merger Reclass
|
ASU Impact
1
|
Updated
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Net periodic pension benefit cost
|
$
|
—
|
|
$
|
219
|
|
$
|
—
|
|
$
|
219
|
|
Net gain on sales of assets, businesses and investments
|
$
|
—
|
|
$
|
(190
|
)
|
$
|
—
|
|
$
|
(190
|
)
|
Net gain on sales of investments
|
$
|
(53
|
)
|
$
|
53
|
|
$
|
—
|
|
$
|
—
|
|
Net gain on sales of property, businesses and consolidated companies
|
$
|
(135
|
)
|
$
|
135
|
|
$
|
—
|
|
$
|
—
|
|
Net gain on sale of ownership interests in nonconsolidated affiliates
|
$
|
(2
|
)
|
$
|
2
|
|
$
|
—
|
|
$
|
—
|
|
Other net loss
|
$
|
75
|
|
$
|
177
|
|
$
|
—
|
|
$
|
252
|
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
804
|
|
$
|
—
|
|
$
|
(804
|
)
|
$
|
—
|
|
Accounts and notes receivable
|
$
|
(2,123
|
)
|
$
|
—
|
|
$
|
(1,110
|
)
|
$
|
(3,233
|
)
|
Accounts payable
|
$
|
620
|
|
$
|
206
|
|
$
|
—
|
|
$
|
826
|
|
Other assets and liabilities, net
|
$
|
(279
|
)
|
$
|
(602
|
)
|
$
|
(2
|
)
|
$
|
(883
|
)
|
Cash provided by (used for) operating activities
|
$
|
1,815
|
|
$
|
—
|
|
$
|
(1,916
|
)
|
$
|
(101
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
||||
Payment into escrow account
|
$
|
(130
|
)
|
$
|
—
|
|
$
|
130
|
|
$
|
—
|
|
Distribution from escrow account
|
$
|
130
|
|
$
|
—
|
|
$
|
(130
|
)
|
$
|
—
|
|
Acquisitions of property, businesses and consolidated companies, net of cash acquired
|
$
|
(31
|
)
|
$
|
—
|
|
$
|
31
|
|
$
|
—
|
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
—
|
|
$
|
—
|
|
$
|
1,914
|
|
$
|
1,914
|
|
Cash provided by (used for) investing activities
|
$
|
(1,753
|
)
|
$
|
—
|
|
$
|
1,945
|
|
$
|
192
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
||||
Contingent payment for acquisition of businesses
|
$
|
—
|
|
$
|
—
|
|
$
|
(31
|
)
|
$
|
(31
|
)
|
Cash used for financing activities
|
$
|
(659
|
)
|
$
|
—
|
|
$
|
(31
|
)
|
$
|
(690
|
)
|
Summary
|
|
|
|
|
|
|
|
|||||
Decrease in cash, cash equivalents and restricted cash
|
$
|
(389
|
)
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
(391
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
|
$
|
6,607
|
|
$
|
—
|
|
$
|
17
|
|
$
|
6,624
|
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
6,218
|
|
$
|
—
|
|
$
|
15
|
|
$
|
6,233
|
|
1.
|
Reflects the adoption of ASU 2016-15 and ASU 2016-18. See Note
2
for additional information. In connection with the review and implementation of ASU 2016-15, the Company also changed the prior year value of “Proceeds from interests in trade accounts receivable conduits” due to additional interpretive guidance of the required method for calculating the cash received from beneficial interests in the conduits.
|
Summary of Changes to the Consolidated Statements of Equity
|
Six Months Ended Jun 30, 2017
|
||||||||
In millions
|
As Filed
|
Merger Reclass
|
Updated
|
||||||
Dividend equivalents on participating securities
|
$
|
(15
|
)
|
$
|
15
|
|
$
|
—
|
|
Other
|
$
|
—
|
|
$
|
(15
|
)
|
$
|
(15
|
)
|
Summary of Impacts to the Consolidated Balance Sheet
|
Dec 31, 2017
|
Adjustments due to:
|
Jan 1, 2018
|
||||||||||||
In millions
|
As Filed
|
Topic 606
|
ASU 2016-01
|
ASU 2016-16
|
Updated
|
||||||||||
Assets
|
|
|
|
|
|
||||||||||
Accounts and notes receivable - Trade
|
$
|
11,314
|
|
$
|
87
|
|
$
|
—
|
|
$
|
—
|
|
$
|
11,401
|
|
Accounts and notes receivable - Other
|
$
|
5,579
|
|
$
|
(8
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
5,571
|
|
Inventories
|
$
|
16,992
|
|
$
|
(64
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
16,928
|
|
Other current assets
|
$
|
1,614
|
|
$
|
130
|
|
$
|
—
|
|
$
|
31
|
|
$
|
1,775
|
|
Total current assets
|
$
|
49,893
|
|
$
|
145
|
|
$
|
—
|
|
$
|
31
|
|
$
|
50,069
|
|
Deferred income tax assets
|
$
|
1,869
|
|
$
|
26
|
|
$
|
—
|
|
$
|
10
|
|
$
|
1,905
|
|
Deferred charges and other assets
|
$
|
2,774
|
|
$
|
43
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,817
|
|
Total other assets
|
$
|
97,444
|
|
$
|
69
|
|
$
|
—
|
|
$
|
10
|
|
$
|
97,523
|
|
Total Assets
|
$
|
192,164
|
|
$
|
214
|
|
$
|
—
|
|
$
|
41
|
|
$
|
192,419
|
|
Liabilities
|
|
|
|
|
|
||||||||||
Accounts payable - Trade
|
$
|
9,134
|
|
$
|
(3
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
9,131
|
|
Accounts payable - Other
|
$
|
3,727
|
|
$
|
10
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,737
|
|
Income taxes payable
|
$
|
843
|
|
$
|
(2
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
841
|
|
Accrued and other current liabilities
|
$
|
8,409
|
|
$
|
171
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,580
|
|
Total current liabilities
|
$
|
26,128
|
|
$
|
176
|
|
$
|
—
|
|
$
|
—
|
|
$
|
26,304
|
|
Deferred income tax liabilities
|
$
|
6,266
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,269
|
|
Other noncurrent obligations
|
$
|
7,969
|
|
$
|
117
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,086
|
|
Total other noncurrent liabilities
|
$
|
34,053
|
|
$
|
120
|
|
$
|
—
|
|
$
|
—
|
|
$
|
34,173
|
|
Stockholders' Equity
|
|
|
|
|
|
||||||||||
Retained earnings
|
$
|
29,211
|
|
$
|
(82
|
)
|
$
|
(20
|
)
|
$
|
41
|
|
$
|
29,150
|
|
Accumulated other comprehensive loss
|
$
|
(8,972
|
)
|
$
|
—
|
|
$
|
20
|
|
$
|
—
|
|
$
|
(8,952
|
)
|
DowDuPont's stockholders' equity
|
$
|
100,330
|
|
$
|
(82
|
)
|
$
|
—
|
|
$
|
41
|
|
$
|
100,289
|
|
Total equity
|
$
|
101,927
|
|
$
|
(82
|
)
|
$
|
—
|
|
$
|
41
|
|
$
|
101,886
|
|
Total Liabilities and Equity
|
$
|
192,164
|
|
$
|
214
|
|
$
|
—
|
|
$
|
41
|
|
$
|
192,419
|
|
Summary of Impacts to the Consolidated Balance Sheets
|
As Reported at Jun 30, 2018
|
Adjustments
|
Balance at Jun 30, 2018 Excluding Adoption of Topic 606
|
||||||
In millions
|
|||||||||
Assets
|
|
|
|
||||||
Accounts and notes receivable - Trade
|
$
|
15,379
|
|
$
|
(177
|
)
|
$
|
15,202
|
|
Accounts and notes receivable - Other
|
$
|
4,924
|
|
$
|
27
|
|
$
|
4,951
|
|
Inventories
|
$
|
15,630
|
|
$
|
81
|
|
$
|
15,711
|
|
Other current assets
|
$
|
2,213
|
|
$
|
(155
|
)
|
$
|
2,058
|
|
Total current assets
|
$
|
47,897
|
|
$
|
(224
|
)
|
$
|
47,673
|
|
Deferred income tax assets
|
$
|
1,701
|
|
$
|
(28
|
)
|
$
|
1,673
|
|
Deferred charges and other assets
|
$
|
2,709
|
|
$
|
(43
|
)
|
$
|
2,666
|
|
Total other assets
|
$
|
95,916
|
|
$
|
(71
|
)
|
$
|
95,845
|
|
Total Assets
|
$
|
187,367
|
|
$
|
(295
|
)
|
$
|
187,072
|
|
Liabilities
|
|
|
|
||||||
Accounts payable - Other
|
$
|
4,662
|
|
$
|
(10
|
)
|
$
|
4,652
|
|
Income taxes payable
|
$
|
874
|
|
$
|
2
|
|
$
|
876
|
|
Accrued and other current liabilities
|
$
|
7,191
|
|
$
|
(187
|
)
|
$
|
7,004
|
|
Total current liabilities
|
$
|
28,110
|
|
$
|
(195
|
)
|
$
|
27,915
|
|
Deferred income tax liabilities
|
$
|
5,885
|
|
$
|
(11
|
)
|
$
|
5,874
|
|
Other noncurrent obligations
|
$
|
7,767
|
|
$
|
(134
|
)
|
$
|
7,633
|
|
Total other noncurrent liabilities
|
$
|
32,525
|
|
$
|
(145
|
)
|
$
|
32,380
|
|
Stockholders' Equity
|
|
|
|
||||||
Retained earnings
|
$
|
30,432
|
|
$
|
45
|
|
$
|
30,477
|
|
DowDuPont's stockholders' equity
|
$
|
98,262
|
|
$
|
45
|
|
$
|
98,307
|
|
Total equity
|
$
|
99,882
|
|
$
|
45
|
|
$
|
99,927
|
|
Total Liabilities and Equity
|
$
|
187,367
|
|
$
|
(295
|
)
|
$
|
187,072
|
|
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 adjusted
|
||
In millions
|
|||
Fair Value of Assets Acquired
|
|
||
Cash and cash equivalents
|
$
|
4,005
|
|
Marketable securities
|
2,849
|
|
|
Accounts and notes receivable - Trade
|
6,199
|
|
|
Accounts and notes receivable - Other
|
1,648
|
|
|
Inventories
|
8,806
|
|
|
Other current assets
|
420
|
|
|
Assets held for sale
|
3,732
|
|
|
Investment in nonconsolidated affiliates
|
1,626
|
|
|
Other investments
|
50
|
|
|
Noncurrent receivables
|
84
|
|
|
Property
|
11,711
|
|
|
Goodwill
|
45,499
|
|
|
Other intangible assets
|
27,104
|
|
|
Deferred income tax assets
|
284
|
|
|
Deferred charges and other assets
|
1,932
|
|
|
Total Assets
|
$
|
115,949
|
|
Fair Value of Liabilities Assumed
|
|
||
Notes payable
|
$
|
4,046
|
|
Long-term debt due within one year
|
1,273
|
|
|
Accounts payable - Trade
|
2,346
|
|
|
Accounts payable - Other
|
952
|
|
|
Income taxes payable
|
261
|
|
|
Accrued and other current liabilities
|
3,517
|
|
|
Liabilities held for sale
|
125
|
|
|
Long-term debt
|
9,878
|
|
|
Deferred income tax liabilities
|
8,319
|
|
|
Pension and other postretirement benefits - noncurrent
|
8,056
|
|
|
Other noncurrent obligations
|
2,023
|
|
|
Total Liabilities
|
$
|
40,796
|
|
Noncontrolling interests
|
473
|
|
|
Net Assets (Consideration for the Merger)
|
$
|
74,680
|
|
Net Trade Revenue by Segment and Business or Major Product Line
|
Three Months Ended
Jun 30, 2018
|
Six Months Ended
Jun 30, 2018
|
||||
In millions
|
||||||
Crop Protection
|
$
|
1,853
|
|
$
|
3,348
|
|
Seed
|
3,877
|
|
6,190
|
|
||
Agriculture
|
$
|
5,730
|
|
$
|
9,538
|
|
Coatings & Performance Monomers
|
$
|
1,084
|
|
$
|
2,025
|
|
Consumer Solutions
|
1,515
|
|
2,878
|
|
||
Performance Materials & Coatings
|
$
|
2,599
|
|
$
|
4,903
|
|
Construction Chemicals
|
$
|
226
|
|
$
|
408
|
|
Industrial Solutions
|
1,198
|
|
2,357
|
|
||
Polyurethanes & CAV
|
2,458
|
|
4,828
|
|
||
Other
|
3
|
|
7
|
|
||
Industrial Intermediates & Infrastructure
|
$
|
3,885
|
|
$
|
7,600
|
|
Hydrocarbons & Energy
|
$
|
1,853
|
|
$
|
3,653
|
|
Packaging and Specialty Plastics
|
4,246
|
|
8,456
|
|
||
Packaging & Specialty Plastics
|
$
|
6,099
|
|
$
|
12,109
|
|
Advanced Printing
|
$
|
136
|
|
$
|
258
|
|
Display & Other Technologies
|
82
|
|
142
|
|
||
Interconnect Solutions
|
298
|
|
579
|
|
||
Photovoltaic & Advanced Materials
|
282
|
|
571
|
|
||
Semiconductor Technologies
|
405
|
|
806
|
|
||
Electronics & Imaging
|
$
|
1,203
|
|
$
|
2,356
|
|
Industrial Biosciences
|
$
|
561
|
|
$
|
1,102
|
|
Nutrition & Health
|
1,214
|
|
2,393
|
|
||
Nutrition & Biosciences
|
$
|
1,775
|
|
$
|
3,495
|
|
Nylon Enterprise & Polyester
|
$
|
699
|
|
$
|
1,367
|
|
Performance Resins
|
486
|
|
837
|
|
||
Performance Solutions
|
283
|
|
689
|
|
||
Transportation & Advanced Polymers
|
$
|
1,468
|
|
$
|
2,893
|
|
Aramids
|
$
|
398
|
|
$
|
791
|
|
Construction
|
435
|
|
820
|
|
||
TYVEK® Enterprise
|
316
|
|
608
|
|
||
Water Solutions
|
262
|
|
491
|
|
||
Safety & Construction
|
$
|
1,411
|
|
$
|
2,710
|
|
Corporate
|
$
|
75
|
|
$
|
151
|
|
Total
|
$
|
24,245
|
|
$
|
45,755
|
|
Net Trade Revenue by Geographic Region
|
Three Months Ended
Jun 30, 2018 |
Six Months Ended
Jun 30, 2018 |
||||
In millions
|
||||||
U.S. & Canada
|
$
|
10,452
|
|
$
|
18,361
|
|
EMEA
1
|
6,294
|
|
13,213
|
|
||
Asia Pacific
|
5,398
|
|
10,188
|
|
||
Latin America
|
2,101
|
|
3,993
|
|
||
Total
|
$
|
24,245
|
|
$
|
45,755
|
|
1.
|
Europe, Middle East and Africa.
|
Contract Balances
|
Jun 30, 2018
|
Topic 606 Adjustments Jan 1, 2018
|
Dec 31, 2017
|
||||||
In millions
|
|||||||||
Accounts and notes receivable - Trade
|
$
|
15,379
|
|
$
|
87
|
|
$
|
11,314
|
|
Contract assets - current
1
|
$
|
82
|
|
$
|
58
|
|
$
|
—
|
|
Contract assets - noncurrent
2
|
$
|
45
|
|
$
|
43
|
|
$
|
—
|
|
Contract liabilities - current
3
|
$
|
544
|
|
$
|
52
|
|
$
|
2,131
|
|
Contract liabilities - noncurrent
4
|
$
|
1,496
|
|
$
|
117
|
|
$
|
1,413
|
|
1.
|
Included in "Other current assets" in the consolidated balance sheets.
|
2.
|
Included in "Deferred charges and other assets" in the consolidated balance sheets.
|
3.
|
Included in "Accrued and other current liabilities" in the consolidated balance sheets.
|
4.
|
Included in "Other noncurrent obligations" in the consolidated balance sheets.
|
Synergy Program
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
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
|
|
2018 restructuring charges
1
|
294
|
|
81
|
|
67
|
|
442
|
|
||||
Charges against the reserve
|
—
|
|
(81
|
)
|
—
|
|
(81
|
)
|
||||
Cash payments
|
(194
|
)
|
—
|
|
(58
|
)
|
(252
|
)
|
||||
Net translation adjustment
|
(2
|
)
|
—
|
|
—
|
|
(2
|
)
|
||||
Reserve balance at Jun 30, 2018
|
$
|
537
|
|
$
|
—
|
|
$
|
80
|
|
$
|
617
|
|
1.
|
Included in "Restructuring and asset related charges (credits) - net" in the consolidated statements of income.
|
2016 Restructuring
|
Severance and Related Benefit Costs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||
In millions
|
|||||||||
Reserve balance at Dec 31, 2017
|
$
|
51
|
|
$
|
17
|
|
$
|
68
|
|
Adjustments to the reserve
1
|
(8
|
)
|
14
|
|
6
|
|
|||
Cash payments
|
(37
|
)
|
(4
|
)
|
(41
|
)
|
|||
Reserve balance at Jun 30, 2018
|
$
|
6
|
|
$
|
27
|
|
$
|
33
|
|
1.
|
Included in "Restructuring and asset related charges (credits) - net" in the consolidated statements of income. The adjustment to severance and related benefit costs was related to Corporate. The adjustments to costs associated with exit and disposal activities were related to Performance Materials & Coatings.
|
Sundry Income (Expense) - Net
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Non-operating pension and other postretirement benefit plan net credit
1
|
$
|
113
|
|
$
|
1
|
|
$
|
223
|
|
$
|
2
|
|
Interest income
|
$
|
51
|
|
$
|
22
|
|
$
|
106
|
|
$
|
47
|
|
Gain on sales of other assets and investments
2
|
$
|
35
|
|
$
|
133
|
|
$
|
69
|
|
$
|
137
|
|
Adjustment related to Dow Silicones ownership restructure
|
$
|
(41
|
)
|
$
|
—
|
|
$
|
(41
|
)
|
$
|
—
|
|
Foreign exchange gains (losses), net
3
|
$
|
(57
|
)
|
$
|
(30
|
)
|
$
|
(205
|
)
|
$
|
(56
|
)
|
Gain related to Nova patent infringement award
4
|
$
|
—
|
|
$
|
137
|
|
$
|
—
|
|
$
|
137
|
|
Loss related to Dow's Bayer CropScience arbitration matter
4
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(469
|
)
|
1.
|
Presented in accordance with newly implemented ASU 2017-07. See Notes
1
and
2
for additional information.
|
2.
|
Includes a
$20 million
gain in the first quarter of 2018 related to Dow's sale of its equity interest in MEGlobal.
|
3.
|
Includes a
$50 million
foreign exchange loss in the first quarter of 2018, related to adjustments to DuPont's foreign currency exchange contracts as a result of U.S. tax reform.
|
4.
|
See Note
13
for additional information.
|
•
|
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. In the three and six months ended June 30, 2018, charges of
$7 million
and
$24 million
were recorded to “Provision for income taxes on continuing operations" to adjust the provisional amount related to the remeasurement of the Company's deferred tax balance, resulting in a net benefit of
$2,642 million
since the enactment of The Act.
|
•
|
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. 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. The Company has not recorded a change to the
$1,580 million
provisional charge recorded in the fourth quarter of 2017 with respect to the one-time transition tax.
|
•
|
In the six months ended June 30, 2018, the Company recorded an indirect impact of The Act related to prepaid tax on the intercompany sale of inventory. The amount recorded related to the inventory was a
$54 million
charge to "Provision for income taxes on continuing operations."
|
•
|
For tax years beginning after December 31, 2017, The Act introduced new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). The Company is evaluating the 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.
|
Net Income for Earnings Per Share Calculations - Basic
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
1
|
Jun 30, 2018
|
Jun 30, 2017
1
|
||||||||
Income from continuing operations, net of tax
|
$
|
1,803
|
|
$
|
1,359
|
|
$
|
2,956
|
|
$
|
2,274
|
|
Net income attributable to noncontrolling interests
|
(35
|
)
|
(38
|
)
|
(79
|
)
|
(65
|
)
|
||||
Net income attributable to participating securities
2
|
(7
|
)
|
(6
|
)
|
(13
|
)
|
(10
|
)
|
||||
Income from continuing operations attributable to common stockholders
|
$
|
1,761
|
|
$
|
1,315
|
|
$
|
2,864
|
|
$
|
2,199
|
|
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
1,761
|
|
$
|
1,315
|
|
$
|
2,859
|
|
$
|
2,199
|
|
Earnings Per Share Calculations - Basic
|
Three Months Ended
|
Six Months Ended
|
||||||||||
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||||||
Dollars per share
|
||||||||||||
Income from continuing operations attributable to common stockholders
|
$
|
0.76
|
|
$
|
1.08
|
|
$
|
1.24
|
|
$
|
1.82
|
|
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
0.76
|
|
$
|
1.08
|
|
$
|
1.24
|
|
$
|
1.82
|
|
Net Income for Earnings Per Share Calculations - Diluted
|
Three Months Ended
|
Six Months Ended
|
||||||||||
Jun 30, 2018
|
Jun 30, 2017
1
|
Jun 30, 2018
|
Jun 30, 2017
1
|
|||||||||
In millions
|
||||||||||||
Income from continuing operations, net of tax
|
$
|
1,803
|
|
$
|
1,359
|
|
$
|
2,956
|
|
$
|
2,274
|
|
Net income attributable to noncontrolling interests
|
(35
|
)
|
(38
|
)
|
(79
|
)
|
(65
|
)
|
||||
Net income attributable to participating securities
2
|
(7
|
)
|
(6
|
)
|
(13
|
)
|
(10
|
)
|
||||
Income from continuing operations attributable to common stockholders
|
$
|
1,761
|
|
$
|
1,315
|
|
$
|
2,864
|
|
$
|
2,199
|
|
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
1,761
|
|
$
|
1,315
|
|
$
|
2,859
|
|
$
|
2,199
|
|
Earnings Per Share Calculations - Diluted
|
Three Months Ended
|
Six Months Ended
|
||||||||||
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||||||
Dollars per share
|
||||||||||||
Income from continuing operations attributable to common stockholders
|
$
|
0.76
|
|
$
|
1.07
|
|
$
|
1.23
|
|
$
|
1.79
|
|
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
0.76
|
|
$
|
1.07
|
|
$
|
1.23
|
|
$
|
1.79
|
|
Share Count Information
|
Three Months Ended
|
Six Months Ended
|
||||||
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||
Shares in millions
|
||||||||
Weighted-average common shares - basic
|
2,308.9
|
|
1,211.8
|
|
2,312.9
|
|
1,207.2
|
|
Plus dilutive effect of equity compensation plans
|
14.7
|
|
17.2
|
|
16.1
|
|
18.3
|
|
Weighted-average common shares - diluted
|
2,323.6
|
|
1,229.0
|
|
2,329.0
|
|
1,225.5
|
|
Stock options and restricted stock units excluded from EPS calculations
3
|
9.7
|
|
2.2
|
|
7.5
|
|
1.7
|
|
1.
|
Prior period amounts have been updated to conform with the current year presentation.
|
2.
|
Dow restricted stock units (formerly termed deferred stock) are considered participating securities due to Dow's practice of paying dividend equivalents on unvested shares.
|
3.
|
These outstanding options to purchase shares of common stock and restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive.
|
Inventories
|
Jun 30, 2018
|
Dec 31, 2017
|
||||
In millions
|
||||||
Finished goods
|
$
|
9,303
|
|
$
|
9,701
|
|
Work in process
|
3,542
|
|
4,512
|
|
||
Raw materials
|
1,478
|
|
1,267
|
|
||
Supplies
|
1,176
|
|
1,296
|
|
||
Total
|
$
|
15,499
|
|
$
|
16,776
|
|
Adjustment of inventories to a LIFO basis
|
131
|
|
216
|
|
||
Total inventories
1
|
$
|
15,630
|
|
$
|
16,992
|
|
1.
|
In the first quarter of 2018, the Company adopted Topic 606, which resulted in a cumulative effect change to the Company's January 1, 2018 inventory balance. See Note
1
for additional information.
|
Goodwill
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Total
|
||||||||||||||||||
In millions
|
|||||||||||||||||||||||||||
Net goodwill at Dec 31, 2017
|
$
|
14,873
|
|
$
|
3,669
|
|
$
|
1,101
|
|
$
|
5,044
|
|
$
|
8,175
|
|
$
|
13,200
|
|
$
|
6,870
|
|
$
|
6,595
|
|
$
|
59,527
|
|
Measurement period adjustments - Merger
1
|
6
|
|
—
|
|
—
|
|
75
|
|
36
|
|
34
|
|
128
|
|
115
|
|
394
|
|
|||||||||
Measurement period adjustments - H&N Business
1
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
—
|
|
—
|
|
11
|
|
|||||||||
Other
|
—
|
|
20
|
|
—
|
|
—
|
|
—
|
|
(20
|
)
|
—
|
|
—
|
|
—
|
|
|||||||||
Foreign currency impact
|
(269
|
)
|
(21
|
)
|
(3
|
)
|
(2
|
)
|
(39
|
)
|
(120
|
)
|
(34
|
)
|
(40
|
)
|
(528
|
)
|
|||||||||
Net goodwill at Jun 30, 2018
|
$
|
14,610
|
|
$
|
3,668
|
|
$
|
1,098
|
|
$
|
5,117
|
|
$
|
8,172
|
|
$
|
13,105
|
|
$
|
6,964
|
|
$
|
6,670
|
|
$
|
59,404
|
|
1.
|
Final determination of the goodwill value assignment may result in adjustments to the preliminary value recorded.
|
Other Intangible Assets
|
Jun 30, 2018
|
Dec 31, 2017
|
||||||||||||||||
In millions
|
Gross
Carrying
Amount
|
Accum Amort
|
Net
|
Gross Carrying Amount
|
Accum Amort
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
7,751
|
|
$
|
(2,194
|
)
|
$
|
5,557
|
|
$
|
7,627
|
|
$
|
(1,834
|
)
|
$
|
5,793
|
|
Software
|
1,479
|
|
(833
|
)
|
646
|
|
1,420
|
|
(780
|
)
|
640
|
|
||||||
Trademarks/tradenames
|
1,775
|
|
(664
|
)
|
1,111
|
|
1,814
|
|
(596
|
)
|
1,218
|
|
||||||
Customer-related
|
14,357
|
|
(2,499
|
)
|
11,858
|
|
14,537
|
|
(2,151
|
)
|
12,386
|
|
||||||
Microbial cell factories
|
391
|
|
(14
|
)
|
377
|
|
397
|
|
(6
|
)
|
391
|
|
||||||
Favorable supply contracts
|
475
|
|
(64
|
)
|
411
|
|
495
|
|
(17
|
)
|
478
|
|
||||||
Other
1
|
621
|
|
(183
|
)
|
438
|
|
703
|
|
(166
|
)
|
537
|
|
||||||
Total other intangible assets with finite lives
|
$
|
26,849
|
|
$
|
(6,451
|
)
|
$
|
20,398
|
|
$
|
26,993
|
|
$
|
(5,550
|
)
|
$
|
21,443
|
|
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
||||||||||||
In-process research and development
|
680
|
|
—
|
|
680
|
|
710
|
|
—
|
|
710
|
|
||||||
Germplasm
2
|
6,265
|
|
—
|
|
6,265
|
|
6,265
|
|
—
|
|
6,265
|
|
||||||
Trademarks/tradenames
|
4,759
|
|
—
|
|
4,759
|
|
4,856
|
|
—
|
|
4,856
|
|
||||||
Total other intangible assets
|
$
|
38,553
|
|
$
|
(6,451
|
)
|
$
|
32,102
|
|
$
|
38,824
|
|
$
|
(5,550
|
)
|
$
|
33,274
|
|
1.
|
Primarily consists of sales and grower networks, marketing and manufacturing alliances and noncompetition agreements.
|
2.
|
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.
|
Amortization Expense
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Other intangible assets, excluding software
|
$
|
488
|
|
$
|
157
|
|
$
|
962
|
|
$
|
312
|
|
Software, included in "Cost of sales"
|
$
|
25
|
|
$
|
20
|
|
$
|
48
|
|
$
|
40
|
|
Interests Held
|
Jun 30, 2018
|
Dec 31, 2017
|
||||
In millions
|
||||||
Carrying value of interests held
|
$
|
24
|
|
$
|
677
|
|
Percentage of anticipated credit losses
|
36.81
|
%
|
2.64
|
%
|
||
Impact to carrying value - 10% adverse change
|
$
|
—
|
|
$
|
—
|
|
Impact to carrying value - 20% adverse change
|
$
|
—
|
|
$
|
1
|
|
Cash Proceeds
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||||||
Collections reinvested in revolving receivables
|
$
|
—
|
|
$
|
6,051
|
|
$
|
—
|
|
$
|
11,732
|
|
|
Interests in conduits
1
|
$
|
211
|
|
$
|
1,363
|
|
$
|
656
|
|
$
|
1,914
|
|
1.
|
Presented in "Investing Activities" in the consolidated statements of cash flows in accordance with ASU 2016-15. See Notes
1
and
2
for additional information. In connection with the review and implementation of ASU 2016-15, the Company also changed the prior year value of “Interests in conduits” due to additional interpretive guidance of the required method for calculating the cash received from beneficial interests in the conduits.
|
Trade Accounts Receivable Sold
|
Jun 30, 2018
|
Dec 31, 2017
|
||||
In millions
|
||||||
Delinquencies on sold receivables still outstanding
|
$
|
36
|
|
$
|
82
|
|
Trade accounts receivable outstanding and derecognized
|
$
|
36
|
|
$
|
612
|
|
Guarantees
|
Jun 30, 2018
|
Dec 31, 2017
|
|||||||||||||
In millions
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
|||||||||
Dow guarantees
|
2023
|
$
|
4,572
|
|
$
|
45
|
|
2023
|
$
|
4,774
|
|
$
|
49
|
|
|
Dow residual value guarantees
|
2027
|
895
|
|
132
|
|
2027
|
889
|
|
135
|
|
|||||
Total Dow guarantees
|
|
$
|
5,467
|
|
$
|
177
|
|
|
$
|
5,663
|
|
$
|
184
|
|
|
DuPont guarantees
|
2022
|
$
|
256
|
|
$
|
—
|
|
2022
|
$
|
260
|
|
$
|
—
|
|
|
DuPont residual value guarantees
|
2029
|
36
|
|
—
|
|
2029
|
37
|
|
—
|
|
|||||
Total DuPont guarantees
|
|
$
|
292
|
|
$
|
—
|
|
|
$
|
297
|
|
$
|
—
|
|
|
Total guarantees
|
|
$
|
5,759
|
|
$
|
177
|
|
|
$
|
5,960
|
|
$
|
184
|
|
Accumulated Other Comprehensive Loss
1
|
Unrealized Gains (Losses) on Investments
|
Cumulative Translation Adj
|
Pension and Other Postretire Benefits
|
Derivative Instruments
|
Total Accum Other Comp Loss
|
||||||||||
In millions
|
|||||||||||||||
Balance at Jan 1, 2017
|
$
|
43
|
|
$
|
(2,381
|
)
|
$
|
(7,389
|
)
|
$
|
(95
|
)
|
$
|
(9,822
|
)
|
Other comprehensive income (loss) before reclassifications
|
38
|
|
632
|
|
—
|
|
(73
|
)
|
597
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(30
|
)
|
(6
|
)
|
203
|
|
(16
|
)
|
151
|
|
|||||
Net other comprehensive income (loss)
|
$
|
8
|
|
$
|
626
|
|
$
|
203
|
|
$
|
(89
|
)
|
$
|
748
|
|
Balance at Jun 30, 2017
|
$
|
51
|
|
$
|
(1,755
|
)
|
$
|
(7,186
|
)
|
$
|
(184
|
)
|
$
|
(9,074
|
)
|
|
|
|
|
|
|
||||||||||
Balance at Jan 1, 2018
2
|
$
|
17
|
|
$
|
(1,935
|
)
|
$
|
(6,923
|
)
|
$
|
(111
|
)
|
$
|
(8,952
|
)
|
Other comprehensive income (loss) before reclassifications
|
(41
|
)
|
(1,058
|
)
|
9
|
|
75
|
|
(1,015
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
2
|
|
(2
|
)
|
248
|
|
44
|
|
292
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(39
|
)
|
$
|
(1,060
|
)
|
$
|
257
|
|
$
|
119
|
|
$
|
(723
|
)
|
Reclassification of stranded tax effects
3
|
$
|
(1
|
)
|
$
|
(107
|
)
|
$
|
(927
|
)
|
$
|
(22
|
)
|
$
|
(1,057
|
)
|
Balance at Jun 30, 2018
|
$
|
(23
|
)
|
$
|
(3,102
|
)
|
$
|
(7,593
|
)
|
$
|
(14
|
)
|
$
|
(10,732
|
)
|
1.
|
Prior period amounts have been updated to conform with the current period presentation.
|
2.
|
The beginning balance of "Unrealized gains (losses) on investments" was increased by
$20 million
to reflect the impact of the adoption of ASU 2016-01. See Notes 1 and 2 for additional information.
|
3.
|
Amounts reclassified to retained earnings as a result of the adoption of ASU 2018-02. See Notes 1 and 2 for additional information.
|
Tax Benefit (Expense)
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Unrealized gains (losses) on investments
|
$
|
(3
|
)
|
$
|
(4
|
)
|
$
|
(9
|
)
|
$
|
4
|
|
Cumulative translation adjustments
|
25
|
|
8
|
|
20
|
|
26
|
|
||||
Pension and other postretirement benefit plans
|
34
|
|
48
|
|
60
|
|
95
|
|
||||
Derivative instruments
|
17
|
|
(7
|
)
|
10
|
|
(21
|
)
|
||||
Tax benefit from income taxes related to other comprehensive income items
|
$
|
73
|
|
$
|
45
|
|
$
|
81
|
|
$
|
104
|
|
Reclassifications Out of Accumulated Other Comprehensive Loss
|
Three Months Ended
|
Six Months Ended
|
Consolidated Statements of Income Classification
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||||||
Unrealized gains (losses) on investments
|
$
|
1
|
|
$
|
(35
|
)
|
$
|
3
|
|
$
|
(47
|
)
|
See (1) below
|
Tax expense (benefit)
|
—
|
|
13
|
|
(1
|
)
|
17
|
|
See (2) below
|
||||
After tax
|
$
|
1
|
|
$
|
(22
|
)
|
$
|
2
|
|
$
|
(30
|
)
|
|
Cumulative translation adjustments
|
$
|
(2
|
)
|
$
|
(6
|
)
|
$
|
(2
|
)
|
$
|
(6
|
)
|
See (3) below
|
Pension and other postretirement benefit plans
|
$
|
156
|
|
$
|
149
|
|
$
|
310
|
|
$
|
298
|
|
See (4) below
|
Tax benefit
|
(34
|
)
|
(48
|
)
|
(62
|
)
|
(95
|
)
|
See (2) below
|
||||
After tax
|
$
|
122
|
|
$
|
101
|
|
$
|
248
|
|
$
|
203
|
|
|
Derivative Instruments
|
$
|
26
|
|
$
|
(8
|
)
|
$
|
52
|
|
$
|
(15
|
)
|
See (5) below
|
Tax benefit
|
(3
|
)
|
—
|
|
(8
|
)
|
(1
|
)
|
See (2) below
|
||||
After tax
|
$
|
23
|
|
$
|
(8
|
)
|
$
|
44
|
|
$
|
(16
|
)
|
|
Total reclassifications for the period, after tax
|
$
|
144
|
|
$
|
65
|
|
$
|
292
|
|
$
|
151
|
|
|
1.
|
"Net sales" and "Sundry income (expense) - net."
|
2.
|
"Provision for income taxes on continuing operations."
|
3.
|
"Sundry income (expense) - net."
|
4.
|
These AOCL components are included in the computation of net periodic benefit cost of the Company's defined benefit pension and other postretirement benefit plans. See Note
16
for additional information.
|
5.
|
"Cost of sales," "Sundry income (expense) - net" and "Interest expense and amortization of debt discount."
|
Noncontrolling Interests
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30,
2018 |
Jun 30,
2017 |
Jun 30,
2018 |
Jun 30,
2017 |
||||||||
Balance at beginning of period
|
$
|
1,664
|
|
$
|
1,274
|
|
$
|
1,597
|
|
$
|
1,242
|
|
Net income attributable to noncontrolling interests
|
35
|
|
38
|
|
79
|
|
65
|
|
||||
Distributions to noncontrolling interests
1
|
(46
|
)
|
(27
|
)
|
(73
|
)
|
(48
|
)
|
||||
Noncontrolling interests from Merger
2
|
—
|
|
—
|
|
56
|
|
—
|
|
||||
Deconsolidation of noncontrolling interests
3
|
—
|
|
(119
|
)
|
—
|
|
(119
|
)
|
||||
Cumulative translation adjustments
|
(34
|
)
|
3
|
|
(40
|
)
|
28
|
|
||||
Other
|
1
|
|
(1
|
)
|
1
|
|
—
|
|
||||
Balance at end of period
|
$
|
1,620
|
|
$
|
1,168
|
|
$
|
1,620
|
|
$
|
1,168
|
|
1.
|
Net of dividends paid to a joint venture, which were reclassified to "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income, totaled
$6 million
for the three months ended
June 30, 2018
(
$3 million
for the three months ended
June 30, 2017
) and
$6 million
for the
six
months ended
June 30, 2018
(
$3 million
for the
six
months ended
June 30, 2017
).
|
2.
|
Reflects a measurement period adjustment. See Note
3
for additional information.
|
3.
|
On June 30, 2017, Dow sold its ownership interest in SKC Haas Display Films group of companies.
|
Net Periodic Benefit Cost for All Significant Plans
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Defined Benefit Pension Plans:
|
|
|
|
|
||||||||
Service cost
|
$
|
165
|
|
$
|
126
|
|
$
|
332
|
|
$
|
251
|
|
Interest cost
|
406
|
|
220
|
|
814
|
|
439
|
|
||||
Expected return on plan assets
|
(705
|
)
|
(385
|
)
|
(1,414
|
)
|
(768
|
)
|
||||
Amortization of prior service credit
|
(6
|
)
|
(6
|
)
|
(12
|
)
|
(12
|
)
|
||||
Amortization of net loss
|
169
|
|
158
|
|
340
|
|
315
|
|
||||
Curtailment/settlement
1
|
(4
|
)
|
(6
|
)
|
(4
|
)
|
(6
|
)
|
||||
Net periodic benefit cost
|
$
|
25
|
|
$
|
107
|
|
$
|
56
|
|
$
|
219
|
|
Other Postretirement Benefits:
|
|
|
|
|
||||||||
Service cost
|
$
|
5
|
|
$
|
3
|
|
$
|
10
|
|
$
|
6
|
|
Interest cost
|
33
|
|
13
|
|
65
|
|
27
|
|
||||
Amortization of net gain
|
(6
|
)
|
(1
|
)
|
(12
|
)
|
(3
|
)
|
||||
Net periodic benefit cost
|
$
|
32
|
|
$
|
15
|
|
$
|
63
|
|
$
|
30
|
|
•
|
6.3 million
stock options with a weighted-average exercise price of
$71.85
per share and a weighted-average fair value of
$15.46
per share; and
|
•
|
1.9 million
restricted stock units ("RSUs") (formerly termed deferred stock) with a weighted-average fair value of
$71.83
per share.
|
•
|
3.3 million
stock options with a weighted-average exercise price of
$71.85
per share and a weighted-average fair value of
$15.46
per share; and
|
•
|
0.8 million
RSUs with a weighted-average fair value of
$71.75
per share.
|
Fair Value of Financial Instruments
|
Jun 30, 2018
|
Dec 31, 2017
|
||||||||||||||||||||||
In millions
|
Cost
|
Gain
|
Loss
|
Fair Value
|
Cost
|
Gain
|
Loss
|
Fair Value
|
||||||||||||||||
Cash equivalents
1
|
$
|
4,279
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,279
|
|
$
|
6,927
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,927
|
|
Restricted cash equivalents
1, 2
|
$
|
516
|
|
$
|
—
|
|
$
|
—
|
|
$
|
516
|
|
$
|
558
|
|
$
|
—
|
|
$
|
—
|
|
$
|
558
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
3
|
$
|
131
|
|
$
|
2
|
|
$
|
—
|
|
$
|
133
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
Held-to-maturity
1, 4
|
374
|
|
—
|
|
—
|
|
374
|
|
952
|
|
—
|
|
—
|
|
952
|
|
||||||||
Total marketable securities
|
$
|
505
|
|
$
|
2
|
|
$
|
—
|
|
$
|
507
|
|
$
|
956
|
|
$
|
—
|
|
$
|
—
|
|
$
|
956
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt
5
|
$
|
678
|
|
$
|
8
|
|
$
|
(24
|
)
|
$
|
662
|
|
$
|
637
|
|
$
|
13
|
|
$
|
(11
|
)
|
$
|
639
|
|
Corporate bonds
|
913
|
|
22
|
|
(28
|
)
|
907
|
|
704
|
|
32
|
|
(3
|
)
|
733
|
|
||||||||
Total debt securities
|
$
|
1,591
|
|
$
|
30
|
|
$
|
(52
|
)
|
$
|
1,569
|
|
$
|
1,341
|
|
$
|
45
|
|
$
|
(14
|
)
|
$
|
1,372
|
|
Equity securities
6
|
$
|
154
|
|
$
|
20
|
|
$
|
(13
|
)
|
$
|
161
|
|
$
|
164
|
|
$
|
2
|
|
$
|
(26
|
)
|
$
|
140
|
|
Total other investments
|
$
|
1,745
|
|
$
|
50
|
|
$
|
(65
|
)
|
$
|
1,730
|
|
$
|
1,505
|
|
$
|
47
|
|
$
|
(40
|
)
|
$
|
1,512
|
|
Total cash and restricted cash equivalents, marketable securities and other investments
|
$
|
7,045
|
|
$
|
52
|
|
$
|
(65
|
)
|
$
|
7,032
|
|
$
|
9,946
|
|
$
|
47
|
|
$
|
(40
|
)
|
$
|
9,953
|
|
Long-term debt including debt due within one year
7
|
$
|
(31,456
|
)
|
$
|
467
|
|
$
|
(1,312
|
)
|
$
|
(32,301
|
)
|
$
|
(32,123
|
)
|
$
|
69
|
|
$
|
(2,121
|
)
|
$
|
(34,175
|
)
|
Derivatives relating to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates
|
$
|
—
|
|
$
|
—
|
|
$
|
(39
|
)
|
$
|
(39
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(4
|
)
|
$
|
(4
|
)
|
Commodities
8
|
—
|
|
163
|
|
(212
|
)
|
(49
|
)
|
—
|
|
130
|
|
(256
|
)
|
(126
|
)
|
||||||||
Foreign currency
|
—
|
|
301
|
|
(79
|
)
|
222
|
|
—
|
|
31
|
|
(159
|
)
|
(128
|
)
|
||||||||
Total derivatives
|
$
|
—
|
|
$
|
464
|
|
$
|
(330
|
)
|
$
|
134
|
|
$
|
—
|
|
$
|
161
|
|
$
|
(419
|
)
|
$
|
(258
|
)
|
1.
|
Prior period amounts were updated to conform with the current year presentation.
|
2.
|
Classified as "Other current assets" in the consolidated balance sheets.
|
3.
|
Available-for-sale securities with maturities of less than one year at the time of purchase.
|
4.
|
Held-to-maturity securities with maturities of more than three months to less than one year at the time of purchase.
|
5.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
|
6.
|
Equity securities with a readily determinable fair value. Presented in accordance with ASU 2016-01. See Notes
1
and
2
for additional information.
|
7.
|
Cost includes fair value adjustments of
$419 million
at
June 30, 2018
and
$492 million
at
December 31, 2017
, related to the accounting for the Merger. Cost also includes fair value hedge adjustments of
$18 million
at
June 30, 2018
and
$19 million
at
December 31, 2017
on
$2,990 million
of debt.
|
8.
|
Presented net of cash collateral.
|
Investing Results
1
|
Six Months Ended
|
|||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
||||
Proceeds from sales of available-for-sale securities
|
$
|
625
|
|
$
|
132
|
|
Gross realized gains
|
$
|
15
|
|
$
|
3
|
|
Gross realized losses
|
$
|
(18
|
)
|
$
|
—
|
|
Fair Value of Derivative Instruments
|
Jun 30, 2018
|
|||||||||
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:
|
|
|
|
|
||||||
Interest rate swaps
|
Deferred charges and other assets
|
$
|
1
|
|
$
|
(1
|
)
|
$
|
—
|
|
Foreign currency contracts
|
Other current assets
|
158
|
|
(42
|
)
|
116
|
|
|||
Commodity contracts
|
Other current assets
|
53
|
|
(4
|
)
|
49
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
104
|
|
(2
|
)
|
102
|
|
|||
Total
|
|
$
|
316
|
|
$
|
(49
|
)
|
$
|
267
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
282
|
|
$
|
(97
|
)
|
$
|
185
|
|
Commodity contracts
|
Other current assets
|
11
|
|
(4
|
)
|
7
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
6
|
|
(1
|
)
|
5
|
|
|||
Total
|
|
$
|
299
|
|
$
|
(102
|
)
|
$
|
197
|
|
Total asset derivatives
|
|
$
|
615
|
|
$
|
(151
|
)
|
$
|
464
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate swaps
|
Other noncurrent obligations
|
$
|
40
|
|
$
|
(1
|
)
|
$
|
39
|
|
Foreign currency contracts
|
Accrued and other current liabilities
|
44
|
|
(42
|
)
|
2
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
94
|
|
(5
|
)
|
89
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
115
|
|
(2
|
)
|
113
|
|
|||
Total
|
|
$
|
293
|
|
$
|
(50
|
)
|
$
|
243
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
130
|
|
$
|
(53
|
)
|
$
|
77
|
|
Commodity contracts
|
Accrued and other current liabilities
|
6
|
|
(4
|
)
|
2
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
9
|
|
(1
|
)
|
8
|
|
|||
Total
|
|
$
|
145
|
|
$
|
(58
|
)
|
$
|
87
|
|
Total liability derivatives
|
|
$
|
438
|
|
$
|
(108
|
)
|
$
|
330
|
|
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 the Company 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, 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 the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Basis of Fair Value Measurements on a Recurring Basis at Jun 30, 2018
|
Quoted Prices in Active Markets for Identical Items
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
||||||||
In millions
|
||||||||||||
Assets at fair value:
|
|
|
|
|
||||||||
Cash equivalents and restricted cash equivalents
1
|
$
|
—
|
|
$
|
4,795
|
|
$
|
—
|
|
$
|
4,795
|
|
Marketable securities
2
|
—
|
|
507
|
|
—
|
|
507
|
|
||||
Interests in trade accounts receivable conduits
3
|
—
|
|
—
|
|
24
|
|
24
|
|
||||
Equity securities
4
|
22
|
|
139
|
|
—
|
|
161
|
|
||||
Debt securities:
4
|
|
|
|
|
||||||||
Government debt
5
|
—
|
|
662
|
|
—
|
|
662
|
|
||||
Corporate bonds
|
—
|
|
907
|
|
—
|
|
907
|
|
||||
Derivatives relating to:
6
|
|
|
|
|
||||||||
Interest rates
|
—
|
|
1
|
|
—
|
|
1
|
|
||||
Commodities
|
39
|
|
135
|
|
—
|
|
174
|
|
||||
Foreign currency
|
—
|
|
440
|
|
—
|
|
440
|
|
||||
Total assets at fair value
|
$
|
61
|
|
$
|
7,586
|
|
$
|
24
|
|
$
|
7,671
|
|
Liabilities at fair value:
|
|
|
|
|
||||||||
Long-term debt including debt due within one year
7
|
$
|
—
|
|
$
|
32,301
|
|
$
|
—
|
|
$
|
32,301
|
|
Derivatives relating to:
6
|
|
|
|
|
||||||||
Interest rates
|
—
|
|
40
|
|
—
|
|
40
|
|
||||
Commodities
|
20
|
|
204
|
|
—
|
|
224
|
|
||||
Foreign currency
|
—
|
|
174
|
|
—
|
|
174
|
|
||||
Total liabilities at fair value
|
$
|
20
|
|
$
|
32,719
|
|
$
|
—
|
|
$
|
32,739
|
|
1.
|
Treasury bills, time deposits, and money market funds included in "Cash and cash equivalents" and money market funds included in "Other current assets" in the consolidated balance sheets and 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
11
for additional information on transfers of financial assets.
|
4.
|
The Company’s investments in debt securities, which are primarily available-for-sale, and equity securities 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
18
for the classification of derivatives in the consolidated balance sheets.
|
7.
|
See Note
18
for information on fair value measurements of long-term debt.
|
Basis of Fair Value Measurements on a Recurring Basis at Dec 31, 2017
|
Quoted Prices in Active Markets for Identical Items
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
||||||||
In millions
|
||||||||||||
Assets at fair value:
|
|
|
|
|
||||||||
Cash equivalents and restricted cash equivalents
1
|
$
|
—
|
|
$
|
7,485
|
|
$
|
—
|
|
$
|
7,485
|
|
Marketable securities
2
|
—
|
|
956
|
|
—
|
|
956
|
|
||||
Interests in trade accounts receivable conduits
3
|
—
|
|
—
|
|
677
|
|
677
|
|
||||
Equity securities
4
|
88
|
|
52
|
|
—
|
|
140
|
|
||||
Debt securities:
4
|
|
|
|
|
||||||||
Government debt
5
|
—
|
|
639
|
|
—
|
|
639
|
|
||||
Corporate bonds
|
—
|
|
733
|
|
—
|
|
733
|
|
||||
Derivatives relating to:
6
|
|
|
|
|
||||||||
Commodities
|
47
|
|
100
|
|
—
|
|
147
|
|
||||
Foreign currency
|
—
|
|
172
|
|
—
|
|
172
|
|
||||
Total assets at fair value
|
$
|
135
|
|
$
|
10,137
|
|
$
|
677
|
|
$
|
10,949
|
|
Liabilities at fair value:
|
|
|
|
|
||||||||
Long-term debt including debt due within one year
7
|
$
|
—
|
|
$
|
34,175
|
|
$
|
—
|
|
$
|
34,175
|
|
Derivatives relating to:
6
|
|
|
|
|
||||||||
Interest rates
|
—
|
|
4
|
|
—
|
|
4
|
|
||||
Commodities
|
31
|
|
261
|
|
—
|
|
292
|
|
||||
Foreign currency
|
—
|
|
295
|
|
—
|
|
295
|
|
||||
Total liabilities at fair value
|
$
|
31
|
|
$
|
34,735
|
|
$
|
—
|
|
$
|
34,766
|
|
1.
|
Treasury bills, time deposits, and money market funds included in "Cash and cash equivalents" and money market funds included in "Other current assets" in the consolidated balance sheets and 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
11
for additional information on transfers of financial assets.
|
4.
|
The Company’s investments in debt securities, which are primarily available-for-sale, and equity securities 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
18
for the classification of derivatives in the consolidated balance sheets.
|
7.
|
See Note
18
for information on fair value measurements of long-term debt.
|
Fair Value Measurements Using Level 3 Inputs for Interests Held in Trade Receivable Conduits
1
|
Three Months Ended
|
Six Months Ended
|
||||||||||
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
|||||||||
In millions
|
||||||||||||
Balance at beginning of period
|
$
|
234
|
|
$
|
1,663
|
|
$
|
677
|
|
$
|
1,237
|
|
Gain (loss) included in earnings
2
|
1
|
|
(2
|
)
|
3
|
|
(2
|
)
|
||||
Purchases
3
|
—
|
|
1,386
|
|
—
|
|
2,363
|
|
||||
Settlements
3
|
(211
|
)
|
(1,363
|
)
|
(656
|
)
|
(1,914
|
)
|
||||
Balance at end of period
|
$
|
24
|
|
$
|
1,684
|
|
$
|
24
|
|
$
|
1,684
|
|
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.
|
3.
|
Presented in accordance with ASU 2016-15. See Notes
1
and
2
for additional information. In connection with the review and implementation of ASU 2016-15, the Company also changed the prior year value of “Purchases” and "Settlements" due to additional interpretive guidance of the required method for calculating the cash received from beneficial interests in the conduits.
|
1.
|
All assets were restricted at
June 30, 2018
and
December 31, 2017
.
|
2.
|
All liabilities were nonrecourse at
June 30, 2018
and
December 31, 2017
.
|
Carrying Amounts of Assets and Liabilities Related to Nonconsolidated VIEs
|
|
Jun 30,
2018 |
Dec 31,
2017 |
||||
In millions
|
Description of asset or liability
|
||||||
Hemlock Semiconductor L.L.C.
|
Equity method investment
1
|
$
|
(717
|
)
|
$
|
(752
|
)
|
Silicon joint ventures
|
Equity method investments
2
|
$
|
102
|
|
$
|
103
|
|
AgroFresh Solutions, Inc
|
Equity method investment
2
|
$
|
42
|
|
$
|
51
|
|
Other receivable
3
|
$
|
—
|
|
$
|
4
|
|
1.
|
Classified as "Other noncurrent obligations" in the consolidated balance sheets. The Company's maximum exposure to loss was
zero
at
June 30, 2018
(
zero
at
December 31, 2017
).
|
2.
|
Classified as "Investment in nonconsolidated affiliates" in the consolidated balance sheets.
|
3.
|
Classified as "Accounts and notes receivable - Other" in the consolidated balance sheets.
|
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
|
||||||||||||||||||||||||||||||
Three months ended Jun 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
5,730
|
|
$
|
2,599
|
|
$
|
3,885
|
|
$
|
6,099
|
|
$
|
1,203
|
|
$
|
1,775
|
|
$
|
1,468
|
|
$
|
1,411
|
|
$
|
75
|
|
$
|
24,245
|
|
Operating EBITDA
1
|
$
|
1,685
|
|
$
|
569
|
|
$
|
682
|
|
$
|
1,330
|
|
$
|
372
|
|
$
|
433
|
|
$
|
446
|
|
$
|
341
|
|
$
|
(182
|
)
|
$
|
5,676
|
|
Equity in earnings (losses) of nonconsolidated affiliates
|
$
|
3
|
|
$
|
36
|
|
$
|
96
|
|
$
|
108
|
|
$
|
6
|
|
$
|
5
|
|
$
|
1
|
|
$
|
8
|
|
$
|
(13
|
)
|
$
|
250
|
|
Three months ended Jun 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
1,629
|
|
$
|
2,273
|
|
$
|
3,015
|
|
$
|
5,079
|
|
$
|
677
|
|
$
|
277
|
|
$
|
298
|
|
$
|
490
|
|
$
|
96
|
|
$
|
13,834
|
|
Pro forma net sales
|
$
|
4,595
|
|
$
|
2,255
|
|
$
|
3,013
|
|
$
|
5,428
|
|
$
|
1,221
|
|
$
|
1,494
|
|
$
|
1,284
|
|
$
|
1,329
|
|
$
|
98
|
|
$
|
20,717
|
|
Pro forma Operating EBITDA
2
|
$
|
1,165
|
|
$
|
540
|
|
$
|
417
|
|
$
|
1,163
|
|
$
|
410
|
|
$
|
318
|
|
$
|
308
|
|
$
|
262
|
|
$
|
(190
|
)
|
$
|
4,393
|
|
Equity in earnings (losses) of nonconsolidated affiliates
|
$
|
2
|
|
$
|
41
|
|
$
|
(13
|
)
|
$
|
33
|
|
$
|
—
|
|
$
|
2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(11
|
)
|
$
|
54
|
|
Six months ended Jun 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
9,538
|
|
$
|
4,903
|
|
$
|
7,600
|
|
$
|
12,109
|
|
$
|
2,356
|
|
$
|
3,495
|
|
$
|
2,893
|
|
$
|
2,710
|
|
$
|
151
|
|
$
|
45,755
|
|
Operating EBITDA
1
|
$
|
2,576
|
|
$
|
1,197
|
|
$
|
1,336
|
|
$
|
2,631
|
|
$
|
729
|
|
$
|
851
|
|
$
|
883
|
|
$
|
695
|
|
$
|
(351
|
)
|
$
|
10,547
|
|
Equity in earnings (losses) of nonconsolidated affiliates
|
$
|
2
|
|
$
|
77
|
|
$
|
245
|
|
$
|
167
|
|
$
|
13
|
|
$
|
8
|
|
$
|
4
|
|
$
|
13
|
|
$
|
(22
|
)
|
$
|
507
|
|
Six months ended Jun 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
3,197
|
|
$
|
4,352
|
|
$
|
5,866
|
|
$
|
10,104
|
|
$
|
1,332
|
|
$
|
534
|
|
$
|
588
|
|
$
|
924
|
|
$
|
167
|
|
$
|
27,064
|
|
Pro forma net sales
|
$
|
9,644
|
|
$
|
4,318
|
|
$
|
5,860
|
|
$
|
10,810
|
|
$
|
2,385
|
|
$
|
2,918
|
|
$
|
2,535
|
|
$
|
2,542
|
|
$
|
172
|
|
$
|
41,184
|
|
Pro forma Operating EBITDA
2
|
$
|
2,626
|
|
$
|
1,021
|
|
$
|
929
|
|
$
|
2,277
|
|
$
|
737
|
|
$
|
635
|
|
$
|
629
|
|
$
|
554
|
|
$
|
(401
|
)
|
$
|
9,007
|
|
Equity in earnings (losses) of nonconsolidated affiliates
|
$
|
4
|
|
$
|
132
|
|
$
|
60
|
|
$
|
66
|
|
$
|
—
|
|
$
|
6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(18
|
)
|
$
|
250
|
|
1.
|
A reconciliation of "Income from continuing operations, net of tax" to Operating EBITDA is provided on the following page.
|
2.
|
A reconciliation of "Income from continuing operations, net of tax" to pro forma Operating EBITDA is provided on the following page.
|
Reconciliation of "Income from continuing operations, net of tax" to Operating EBITDA for the Three and Six Months Ended Jun 30, 2018
|
Three Months Ended
|
Six Months Ended
|
||||
In millions
|
Jun 30, 2018
|
Jun 30, 2018
|
||||
Income from continuing operations, net of tax
|
$
|
1,803
|
|
$
|
2,956
|
|
+ Provision for income taxes on continuing operations
|
565
|
|
954
|
|
||
Income from continuing operations before income taxes
|
$
|
2,368
|
|
$
|
3,910
|
|
+ Depreciation and amortization
|
1,496
|
|
2,980
|
|
||
- Interest income
1
|
51
|
|
106
|
|
||
+ Interest expense and amortization of debt discount
|
360
|
|
710
|
|
||
- Foreign exchange gains (losses), net
1, 2
|
(57
|
)
|
(155
|
)
|
||
- Significant items
|
(1,446
|
)
|
(2,898
|
)
|
||
Operating EBITDA
|
$
|
5,676
|
|
$
|
10,547
|
|
1.
|
Included in "Sundry income (expense) - net."
|
2.
|
Excludes a
$50 million
pretax foreign exchange loss significant item related to adjustments to DuPont's foreign currency exchange contracts as a result of U.S. tax reform during the six months ended June 30, 2018.
|
Reconciliation of "Income from continuing operations, net of tax" to Pro Forma Operating EBITDA for the Three and Six Months Ended Jun 30, 2017
|
Three Months Ended
|
Six Months Ended
|
||||
In millions
|
Jun 30, 2017
|
Jun 30, 2017
|
||||
Income from continuing operations, net of tax
|
$
|
1,359
|
|
$
|
2,274
|
|
+ Provision for income taxes on continuing operations
|
455
|
|
668
|
|
||
Income from continuing operations before income taxes
|
$
|
1,814
|
|
$
|
2,942
|
|
+ Depreciation and amortization
|
739
|
|
1,517
|
|
||
- Interest income
1
|
22
|
|
47
|
|
||
+ Interest expense and amortization of debt discount
|
226
|
|
445
|
|
||
- Foreign exchange gains (losses), net
1
|
(30
|
)
|
(56
|
)
|
||
+ Pro forma adjustments
|
1,284
|
|
3,045
|
|
||
- Adjusted significant items
2
|
(322
|
)
|
(1,049
|
)
|
||
Pro forma Operating EBITDA
|
$
|
4,393
|
|
$
|
9,007
|
|
1.
|
Included in "Sundry income (expense) - net."
|
2.
|
Adjusted significant items, excluding the impact of one-time transaction costs directly attributable to the Merger and reflected in the pro forma adjustments.
|
Significant Items by Segment for the Three Months Ended Jun 30, 2018
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Net loss on divestiture and change in joint venture ownership
1
|
$
|
24
|
|
$
|
(41
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(17
|
)
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(558
|
)
|
(558
|
)
|
||||||||||
Inventory step-up amortization
3
|
(676
|
)
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
(682
|
)
|
||||||||||
Restructuring and asset related charges (credits) - net
4
|
(37
|
)
|
(15
|
)
|
—
|
|
(3
|
)
|
(1
|
)
|
—
|
|
—
|
|
(12
|
)
|
(121
|
)
|
(189
|
)
|
||||||||||
Total
|
$
|
(689
|
)
|
$
|
(56
|
)
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
(1
|
)
|
$
|
(4
|
)
|
$
|
—
|
|
$
|
(12
|
)
|
$
|
(679
|
)
|
$
|
(1,446
|
)
|
1.
|
Includes a gain related to Agriculture asset sales and a loss related to post-closing adjustments related to the Dow Silicones ownership restructure.
|
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 Silicones.
|
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. See Note 3 for additional information.
|
4.
|
Includes Board approved restructuring plans and asset related charges, which include other asset impairments. See Note
5
for additional information.
|
Adjusted Significant Items by Segment for the Three Months Ended Jun 30, 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
|
||||||||||||||||||||||||||||||
Gain on divestiture
1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7
|
|
$
|
7
|
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(296
|
)
|
(296
|
)
|
||||||||||
Litigation related charges, awards and adjustments
3
|
—
|
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
137
|
|
||||||||||
Restructuring and asset related charges (credits) - net
4
|
—
|
|
3
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(2
|
)
|
(157
|
)
|
9
|
|
(148
|
)
|
||||||||||
Transaction costs and productivity actions
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(22
|
)
|
(22
|
)
|
||||||||||
Total
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
$
|
137
|
|
$
|
(1
|
)
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
(157
|
)
|
$
|
(302
|
)
|
$
|
(322
|
)
|
1.
|
Includes post-closing adjustments on the split-off of Dow's chlorine value chain.
|
2.
|
Integration and separation costs related to the Merger and the ownership restructure of Dow Silicones.
|
3.
|
Includes a patent infringement matter with Nova Chemicals Corporation. See Note
13
for additional information.
|
4.
|
Includes Board approved restructuring plans and asset related charges, which includes other asset impairments. See Note
5
for additional information.
|
5.
|
Includes implementation costs associated with Dow's restructuring programs and other productivity actions.
|
Significant Items by Segment for the Six Months Ended Jun 30, 2018
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Net gain on divestitures and change in joint venture ownership
1
|
$
|
24
|
|
$
|
(41
|
)
|
$
|
20
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3
|
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,015
|
)
|
(1,015
|
)
|
||||||||||
Inventory step-up amortization
3
|
(1,315
|
)
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(67
|
)
|
—
|
|
(1
|
)
|
—
|
|
(1,385
|
)
|
||||||||||
Restructuring and asset related charges (credits) - net
4
|
(95
|
)
|
(14
|
)
|
(11
|
)
|
(9
|
)
|
(2
|
)
|
—
|
|
1
|
|
(19
|
)
|
(302
|
)
|
(451
|
)
|
||||||||||
Income tax related item
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(50
|
)
|
(50
|
)
|
||||||||||
Total
|
$
|
(1,386
|
)
|
$
|
(55
|
)
|
$
|
9
|
|
$
|
(11
|
)
|
$
|
(2
|
)
|
$
|
(67
|
)
|
$
|
1
|
|
$
|
(20
|
)
|
$
|
(1,367
|
)
|
$
|
(2,898
|
)
|
1.
|
Includes a gain related to Dow's sale of its equity interest in MEGlobal, a gain related to Agriculture asset sales and a loss related to post-closing adjustments on the Dow Silicones ownership restructure.
|
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 Silicones.
|
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. See Note 3 for additional information.
|
4.
|
Includes Board approved restructuring plans and asset related charges, which include other asset impairments. See Note
5
for additional information.
|
5.
|
Includes a foreign exchange loss related to adjustments to DuPont's foreign currency exchange contracts as a result of U.S. tax reform.
|
Adjusted Significant Items by Segment for the Six Months Ended Jun 30, 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 divestitures
1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
162
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7
|
|
$
|
169
|
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(538
|
)
|
(538
|
)
|
||||||||||
Litigation related charges, awards and adjustments
3
|
(469
|
)
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(332
|
)
|
||||||||||
Restructuring and asset related charges (credits) - net
4
|
—
|
|
3
|
|
—
|
|
—
|
|
(3
|
)
|
(6
|
)
|
(4
|
)
|
(265
|
)
|
(25
|
)
|
(300
|
)
|
||||||||||
Transaction costs and productivity actions
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(48
|
)
|
(48
|
)
|
||||||||||
Total
|
$
|
(469
|
)
|
$
|
3
|
|
$
|
—
|
|
$
|
137
|
|
$
|
(3
|
)
|
$
|
156
|
|
$
|
(4
|
)
|
$
|
(265
|
)
|
$
|
(604
|
)
|
$
|
(1,049
|
)
|
1.
|
Includes the sale of DuPont's global food safety diagnostic business and post-closing adjustments on the split-off of Dow's chlorine value chain.
|
2.
|
Integration and separation costs related to the Merger and the ownership restructure of Dow Silicones.
|
3.
|
Includes an arbitration matter with Bayer CropScience and a patent infringement matter with Nova Chemicals Corporation. See Note
13
for additional information.
|
4.
|
Includes Board approved restructuring plans and asset related charges, which includes other asset impairments. See Note
5
for additional information.
|
5.
|
Includes implementation costs associated with Dow's restructuring programs and other productivity actions.
|
•
|
The Company reported net sales in the second quarter of
2018
of
$24.2 billion
, up 75 percent from
$13.8 billion
in the second quarter of 2017. Portfolio & Other contributed 61 percent of the sales increase (62 percent increase from the Merger, impacting all segments except Performance Materials & Coatings and Industrial Intermediates & Infrastructure, offset by a 1 percent decrease from other portfolio actions). The remainder of the increase was driven by broad-based sales growth across all segments and geographic regions.
|
•
|
Volume increased 7 percent compared with the second quarter of 2017, with increases in all operating segments, except Nutrition & Biosciences (flat), including a double-digit increase in Industrial Intermediates & Infrastructure (up 18 percent). Volume increased in all geographic regions, led by a double-digit increase in Asia Pacific (up 18 percent).
|
•
|
Local price was up 4 percent compared with the same period last year, driven primarily by broad-based pricing actions in response to higher feedstock and raw material costs. Local price increased in Performance Materials & Coatings (up 10 percent), Industrial Intermediates & Infrastructure (up 8 percent), Nutrition & Biosciences (up 3 percent), Packaging & Specialty Plastics (up 2 percent) and Safety & Construction (up 1 percent) and declined in Electronics & Imaging (down 1 percent). Price was flat in Agriculture and Transportation & Advanced Polymers. Local price increased in all geographic regions.
|
•
|
Currency had a favorable impact of 3 percent on sales, driven primarily by Europe, Middle East and Africa ("EMEA").
|
•
|
Research and development ("R&D") expenses totaled
$803 million
in the second quarter of
2018
, up from
$408 million
in the second quarter of 2017. Selling, general and administrative ("SG&A") expenses were
$1,933 million
in the second quarter of
2018
, up from
$720 million
in the second quarter of 2017. R&D and SG&A expenses increased primarily due to the Merger.
|
•
|
Restructuring and asset related charges (credits) - net was a $189 million charge in the second quarter of 2018, consisting of $114 million of severance and related benefit costs, $33 million of asset write-downs and write-offs and $42 million of costs associated with exit and disposal activities.
|
•
|
Integration and separation costs were
$558 million
in the second quarter of
2018
, up from
$136 million
in the second quarter of 2017, primarily from post-Merger integration and Intended Business Separation activities.
|
•
|
Equity in earnings of nonconsolidated affiliates was
$250 million
in the second quarter of 2018, up from
$54 million
in the second quarter of 2017, primarily due to higher earnings from the Kuwait joint ventures and lower equity losses from Sadara Chemical Company ("Sadara").
|
•
|
Sundry income (expense) - net was income of
$178 million
in the second quarter of
2018
, down from income of
$322 million
in the second quarter of 2017 which included a gain related to the Nova patent infringement award.
|
•
|
On April 25, 2018, DowDuPont announced that its Board declared a dividend of $0.38 per share, which was paid on June 15, 2018, to shareholders of record on May 31, 2018.
|
•
|
On June 25, 2018, DowDuPont announced that its Board declared a dividend of $0.38 per share, payable on September 14, 2018, to shareholders of record on August 31, 2018.
|
•
|
The Company spent $1 billion on repurchases of DowDuPont common stock in the second quarter of 2018. At June 30, 2018, $1 billion of the $4 billion share repurchase program authorization remained available for additional purchases. Although there is no timeline to complete the share repurchase program, subject to sufficient opportunities to be in the market, DowDuPont intends to repurchase approximately $1 billion of the Company's stock in the third quarter of 2018, thereby completing the share repurchase program.
|
•
|
Andrew N. Liveris, former Executive Chairman of DowDuPont, retired on July 1, 2018.
|
Selected Financial Data
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions, except per share amounts
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
24,245
|
|
$
|
13,834
|
|
$
|
45,755
|
|
$
|
27,064
|
|
|
|
|
|
|
||||||||
Cost of sales ("COS")
|
$
|
17,974
|
|
$
|
10,761
|
|
$
|
34,289
|
|
$
|
20,955
|
|
Percent of net sales
|
74.1
|
%
|
77.8
|
%
|
74.9
|
%
|
77.4
|
%
|
||||
|
|
|
|
|
||||||||
Research and development expenses
|
$
|
803
|
|
$
|
408
|
|
$
|
1,571
|
|
$
|
827
|
|
Percent of net sales
|
3.3
|
%
|
2.9
|
%
|
3.4
|
%
|
3.1
|
%
|
||||
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
$
|
1,933
|
|
$
|
720
|
|
$
|
3,647
|
|
$
|
1,479
|
|
Percent of net sales
|
8.0
|
%
|
5.2
|
%
|
8.0
|
%
|
5.5
|
%
|
||||
|
|
|
|
|
||||||||
Effective tax rate
|
23.9
|
%
|
25.1
|
%
|
24.4
|
%
|
22.7
|
%
|
||||
|
|
|
|
|
||||||||
Net income available for common stockholders
|
$
|
1,768
|
|
$
|
1,321
|
|
$
|
2,872
|
|
$
|
2,209
|
|
|
|
|
|
|
||||||||
Earnings per common share – basic
|
$
|
0.76
|
|
$
|
1.08
|
|
$
|
1.24
|
|
$
|
1.82
|
|
Earnings per common share – diluted
|
$
|
0.76
|
|
$
|
1.07
|
|
$
|
1.23
|
|
$
|
1.79
|
|
Summary of Sales Results
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
24,245
|
|
$
|
13,834
|
|
$
|
45,755
|
|
$
|
27,064
|
|
Pro forma net sales
|
|
$
|
20,717
|
|
|
$
|
41,184
|
|
1.
|
Portfolio & Other primarily reflects sales related to the Merger (impacts all segments, except Performance Materials & Coatings and Industrial Intermediates & Infrastructure). 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).
|
1.
|
Pro forma net sales for Agriculture excludes sales related to the November 30, 2017, divestiture of the DAS Divested Ag Business for the period January 1, 2017 through June 30, 2017. Pro forma net sales for Packaging & Specialty Plastics excludes sales related to the September 1, 2017, divestiture of the EAA Business for the period January 1, 2017 through June 30, 2017. Portfolio & Other includes sales for the acquisition of FMC Corporation's ("FMC") Health and Nutrition Business (the "H&N Business") acquired on November 1, 2017, impacting Nutrition & Biosciences. Portfolio & Other also reflects the following divestitures: SKC Haas Display Films group of companies (divested June 30, 2017) and the authentication business (divested on January 6, 2017), both impacting Electronics & Imaging; and, the divestiture of the global food safety diagnostic business (divested February 28, 2017), impacting Nutrition & Biosciences.
|
Unaudited Pro Forma Combined
Statement of Income
|
Three Months Ended Jun 30, 2017
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
Historical Dow
1, 3
|
Historical DuPont
1, 3
|
Reclass
2, 3
|
Divestitures
4
|
Pro Forma
5
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
13,834
|
|
$
|
7,424
|
|
$
|
28
|
|
$
|
(510
|
)
|
$
|
(59
|
)
|
$
|
20,717
|
|
Cost of sales
|
10,761
|
|
4,134
|
|
138
|
|
(218
|
)
|
61
|
|
14,876
|
|
||||||
Other operating charges
|
—
|
|
176
|
|
(176
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
408
|
|
426
|
|
(10
|
)
|
(43
|
)
|
7
|
|
788
|
|
||||||
Selling, general and administrative expenses
|
856
|
|
1,317
|
|
(361
|
)
|
(53
|
)
|
11
|
|
1,770
|
|
||||||
Other (loss) income, net
|
—
|
|
(125
|
)
|
125
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
157
|
|
—
|
|
57
|
|
—
|
|
221
|
|
435
|
|
||||||
Restructuring and asset related charges
(credits) - net
|
(12
|
)
|
160
|
|
—
|
|
—
|
|
—
|
|
148
|
|
||||||
Integration and separation costs
|
—
|
|
—
|
|
352
|
|
(15
|
)
|
(41
|
)
|
296
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
54
|
|
—
|
|
24
|
|
—
|
|
(5
|
)
|
73
|
|
||||||
Sundry income (expense) - net
|
300
|
|
—
|
|
(150
|
)
|
(9
|
)
|
—
|
|
141
|
|
||||||
Interest income
|
22
|
|
—
|
|
(22
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense and amortization of debt discount
|
226
|
|
99
|
|
—
|
|
—
|
|
(30
|
)
|
295
|
|
||||||
Income from continuing operations before income taxes
|
1,814
|
|
987
|
|
5
|
|
(190
|
)
|
(293
|
)
|
2,323
|
|
||||||
Provision for income taxes on continuing operations
|
455
|
|
128
|
|
5
|
|
(46
|
)
|
(102
|
)
|
440
|
|
||||||
Income from continuing operations, net of tax
|
1,359
|
|
859
|
|
—
|
|
(144
|
)
|
(191
|
)
|
1,883
|
|
||||||
Net income attributable to noncontrolling interests
|
38
|
|
7
|
|
—
|
|
—
|
|
3
|
|
48
|
|
||||||
Net income from continuing operations attributable to DowDuPont Inc.
|
1,321
|
|
852
|
|
—
|
|
(144
|
)
|
(194
|
)
|
1,835
|
|
||||||
Preferred stock dividends
|
—
|
|
3
|
|
—
|
|
—
|
|
(3
|
)
|
—
|
|
||||||
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
1,321
|
|
$
|
849
|
|
$
|
—
|
|
$
|
(144
|
)
|
$
|
(191
|
)
|
$
|
1,835
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
0.79
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
0.78
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,325.0
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,347.7
|
|
1.
|
Reflects historical consolidated statements of income included in Dow's and DuPont's Quarterly Reports on Form 10-Q for the quarter ended June 30, 2017.
|
2.
|
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.
|
3.
|
Amounts have been updated to reflect certain reclassifications required under ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which was adopted on January 1, 2018, and required retrospective application.
|
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. For additional information regarding these divestitures, see Note 4 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
|
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. The pro forma adjustments are consistent with those identified and disclosed in the Company's Current Report on Form 8-K/A filed with the SEC on October 26, 2017.
|
Unaudited Pro Forma Combined
Statement of Income
|
Six Months Ended Jun 30, 2017
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
Historical Dow
1, 3
|
Historical DuPont
1, 3
|
Reclass
2, 3
|
Divestitures
4
|
Pro Forma
5
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
27,064
|
|
$
|
15,167
|
|
$
|
73
|
|
$
|
(994
|
)
|
$
|
(126
|
)
|
$
|
41,184
|
|
Cost of sales
|
20,955
|
|
8,448
|
|
271
|
|
(417
|
)
|
52
|
|
29,309
|
|
||||||
Other operating charges
|
—
|
|
380
|
|
(380
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
827
|
|
826
|
|
(20
|
)
|
(78
|
)
|
14
|
|
1,569
|
|
||||||
Selling, general and administrative expenses
|
1,724
|
|
2,546
|
|
(610
|
)
|
(102
|
)
|
22
|
|
3,580
|
|
||||||
Other (loss) income, net
|
—
|
|
77
|
|
(77
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
312
|
|
—
|
|
108
|
|
—
|
|
443
|
|
863
|
|
||||||
Restructuring and asset related charges
(credits) - net
|
(13
|
)
|
312
|
|
—
|
|
—
|
|
—
|
|
299
|
|
||||||
Integration and separation costs
|
—
|
|
—
|
|
631
|
|
(15
|
)
|
(78
|
)
|
538
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
250
|
|
—
|
|
42
|
|
—
|
|
(11
|
)
|
281
|
|
||||||
Sundry income (expense) - net
|
(169
|
)
|
—
|
|
(26
|
)
|
(11
|
)
|
—
|
|
(206
|
)
|
||||||
Interest income
|
47
|
|
—
|
|
(47
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense and amortization of debt discount
|
445
|
|
183
|
|
—
|
|
—
|
|
(60
|
)
|
568
|
|
||||||
Income from continuing operations before income taxes
|
2,942
|
|
2,549
|
|
(35
|
)
|
(393
|
)
|
(530
|
)
|
4,533
|
|
||||||
Provision for income taxes on continuing operations
|
668
|
|
352
|
|
(35
|
)
|
(78
|
)
|
(186
|
)
|
721
|
|
||||||
Income from continuing operations, net of tax
|
2,274
|
|
2,197
|
|
—
|
|
(315
|
)
|
(344
|
)
|
3,812
|
|
||||||
Net income attributable to noncontrolling interests
|
65
|
|
15
|
|
—
|
|
—
|
|
5
|
|
85
|
|
||||||
Net income from continuing operations attributable to DowDuPont Inc.
|
2,209
|
|
2,182
|
|
—
|
|
(315
|
)
|
(349
|
)
|
3,727
|
|
||||||
Preferred stock dividends
|
—
|
|
5
|
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
||||||
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
2,209
|
|
$
|
2,177
|
|
$
|
—
|
|
$
|
(315
|
)
|
$
|
(344
|
)
|
$
|
3,727
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
1.60
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
1.59
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,320.4
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,344.4
|
|
1.
|
Reflects historical consolidated statements of income included in Dow's and DuPont's Quarterly Reports on Form 10-Q for the quarter ended June 30, 2017.
|
2.
|
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.
|
3.
|
Amounts have been updated to reflect certain reclassifications required under ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which was adopted on January 1, 2018, and required retrospective application.
|
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. For additional information regarding these divestitures, see Note 4 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
|
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. The pro forma adjustments are consistent with those identified and disclosed in the Company's Current Report on Form 8-K/A filed with the SEC on October 26, 2017.
|
Agriculture
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
5,730
|
|
$
|
1,629
|
|
$
|
9,538
|
|
$
|
3,197
|
|
Pro forma net sales
|
|
$
|
4,595
|
|
|
$
|
9,644
|
|
||||
Operating EBITDA
|
$
|
1,685
|
|
|
$
|
2,576
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
1,165
|
|
|
$
|
2,626
|
|
||||
Equity earnings
|
$
|
3
|
|
$
|
2
|
|
$
|
2
|
|
$
|
4
|
|
Agriculture
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
—
|
%
|
—
|
%
|
Currency
|
2
|
|
3
|
|
Volume
|
2
|
|
(3
|
)
|
Portfolio & other
|
248
|
|
198
|
|
Total
|
252
|
%
|
198
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
4
|
%
|
2
|
%
|
Currency
|
1
|
|
2
|
|
Volume
|
20
|
|
(5
|
)
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
25
|
%
|
(1
|
)%
|
Performance Materials & Coatings
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
2,599
|
|
$
|
2,273
|
|
$
|
4,903
|
|
$
|
4,352
|
|
Pro forma net sales
|
|
$
|
2,255
|
|
|
$
|
4,318
|
|
||||
Operating EBITDA
|
$
|
569
|
|
|
$
|
1,197
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
540
|
|
|
$
|
1,021
|
|
||||
Equity earnings
|
$
|
36
|
|
$
|
41
|
|
$
|
77
|
|
$
|
132
|
|
Performance Materials & Coatings
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
10
|
%
|
10
|
%
|
Currency
|
3
|
|
3
|
|
Volume
|
1
|
|
(1
|
)
|
Portfolio & other
|
—
|
|
1
|
|
Total
|
14
|
%
|
13
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
10
|
%
|
10
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
2
|
|
—
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
15
|
%
|
14
|
%
|
Industrial Intermediates & Infrastructure
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
3,885
|
|
$
|
3,015
|
|
$
|
7,600
|
|
$
|
5,866
|
|
Pro forma net sales
|
|
$
|
3,013
|
|
|
$
|
5,860
|
|
||||
Operating EBITDA
|
$
|
682
|
|
|
$
|
1,336
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
417
|
|
|
$
|
929
|
|
||||
Equity earnings (losses)
|
$
|
96
|
|
$
|
(13
|
)
|
$
|
245
|
|
$
|
60
|
|
Industrial Intermediates & Infrastructure
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
8
|
%
|
10
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
18
|
|
16
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
29
|
%
|
30
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
8
|
%
|
10
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
18
|
|
16
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
29
|
%
|
30
|
%
|
Packaging & Specialty Plastics
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
6,099
|
|
$
|
5,079
|
|
$
|
12,109
|
|
$
|
10,104
|
|
Pro forma net sales
|
|
$
|
5,428
|
|
|
$
|
10,810
|
|
||||
Operating EBITDA
|
$
|
1,330
|
|
|
$
|
2,631
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
1,163
|
|
|
$
|
2,277
|
|
||||
Equity earnings
|
$
|
108
|
|
$
|
33
|
|
$
|
167
|
|
$
|
66
|
|
Packaging & Specialty Plastics
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
2
|
%
|
1
|
%
|
Currency
|
3
|
|
3
|
|
Volume
|
8
|
|
9
|
|
Portfolio & other
|
7
|
|
7
|
|
Total
|
20
|
%
|
20
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
1
|
%
|
1
|
%
|
Currency
|
3
|
|
3
|
|
Volume
|
8
|
|
8
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
12
|
%
|
12
|
%
|
Electronics & Imaging
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
1,203
|
|
$
|
677
|
|
$
|
2,356
|
|
$
|
1,332
|
|
Pro forma net sales
|
|
$
|
1,221
|
|
|
$
|
2,385
|
|
||||
Operating EBITDA
|
$
|
372
|
|
|
$
|
729
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
410
|
|
|
$
|
737
|
|
||||
Equity earnings
|
$
|
6
|
|
$
|
—
|
|
$
|
13
|
|
$
|
—
|
|
Electronics & Imaging
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
(1
|
)%
|
—
|
%
|
Currency
|
1
|
|
1
|
|
Volume
|
5
|
|
3
|
|
Portfolio & other
|
73
|
|
73
|
|
Total
|
78
|
%
|
77
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
—
|
%
|
—
|
%
|
Currency
|
1
|
|
2
|
|
Volume
|
3
|
|
2
|
|
Portfolio & other
|
(5
|
)
|
(5
|
)
|
Total
|
(1
|
)%
|
(1
|
)%
|
Nutrition & Biosciences
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
1,775
|
|
$
|
277
|
|
$
|
3,495
|
|
$
|
534
|
|
Pro forma net sales
|
|
$
|
1,494
|
|
|
$
|
2,918
|
|
||||
Operating EBITDA
|
$
|
433
|
|
|
$
|
851
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
318
|
|
|
$
|
635
|
|
||||
Equity earnings
|
$
|
5
|
|
$
|
2
|
|
$
|
8
|
|
$
|
6
|
|
Nutrition & Biosciences
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
3
|
%
|
3
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
—
|
|
4
|
|
Portfolio & other
|
535
|
|
543
|
|
Total
|
541
|
%
|
554
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
1
|
%
|
1
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
4
|
|
4
|
|
Portfolio & other
|
11
|
|
11
|
|
Total
|
19
|
%
|
20
|
%
|
Transportation & Advanced Polymers
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
1,468
|
|
$
|
298
|
|
$
|
2,893
|
|
$
|
588
|
|
Pro forma net sales
|
|
$
|
1,284
|
|
|
$
|
2,535
|
|
||||
Operating EBITDA
|
$
|
446
|
|
|
$
|
883
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
308
|
|
|
$
|
629
|
|
||||
Equity earnings
|
$
|
1
|
|
$
|
—
|
|
$
|
4
|
|
$
|
—
|
|
Transportation & Advanced Polymers
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
—
|
%
|
—
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
6
|
|
3
|
|
Portfolio & other
|
384
|
|
385
|
|
Total
|
393
|
%
|
392
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
5
|
%
|
5
|
%
|
Currency
|
3
|
|
4
|
|
Volume
|
6
|
|
5
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
14
|
%
|
14
|
%
|
Safety & Construction
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
1,411
|
|
$
|
490
|
|
$
|
2,710
|
|
$
|
924
|
|
Pro forma net sales
|
|
$
|
1,329
|
|
|
$
|
2,542
|
|
||||
Operating EBITDA
|
$
|
341
|
|
|
$
|
695
|
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
262
|
|
|
$
|
554
|
|
||||
Equity earnings
|
$
|
8
|
|
$
|
—
|
|
$
|
13
|
|
$
|
—
|
|
Safety & Construction
|
Three Months Ended
|
Six Months Ended
|
||
Percentage change from prior year
|
Jun 30, 2018
|
Jun 30, 2018
|
||
Change in Net Sales from Prior Period due to:
|
|
|
||
Local price & product mix
|
1
|
%
|
1
|
%
|
Currency
|
3
|
|
3
|
|
Volume
|
3
|
|
—
|
|
Portfolio & other
|
181
|
|
189
|
|
Total
|
188
|
%
|
193
|
%
|
Change in Net Sales in Current Period from Pro Forma Net Sales in Prior Period due to:
|
|
|
||
Local price & product mix
|
1
|
%
|
1
|
%
|
Currency
|
2
|
|
3
|
|
Volume
|
3
|
|
3
|
|
Portfolio & other
|
—
|
|
—
|
|
Total
|
6
|
%
|
7
|
%
|
Corporate
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
|
Jun 30, 2018
|
Jun 30, 2017
|
||||||||
Net sales
|
$
|
75
|
|
$
|
96
|
|
$
|
151
|
|
$
|
167
|
|
Pro forma net sales
|
|
$
|
98
|
|
|
$
|
172
|
|
||||
Operating EBITDA
|
$
|
(182
|
)
|
|
$
|
(351
|
)
|
|
||||
Pro forma Operating EBITDA
|
|
$
|
(190
|
)
|
|
$
|
(401
|
)
|
||||
Equity losses
|
$
|
(13
|
)
|
$
|
(11
|
)
|
$
|
(22
|
)
|
$
|
(18
|
)
|
Net Sales by Division
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
1
|
Jun 30, 2018
|
Jun 30, 2017
1
|
||||||||
Agriculture
|
$
|
5,730
|
|
$
|
4,595
|
|
$
|
9,538
|
|
$
|
9,644
|
|
Performance Materials & Coatings
|
2,599
|
|
2,255
|
|
4,903
|
|
4,318
|
|
||||
Industrial Intermediates & Infrastructure
|
3,885
|
|
3,013
|
|
7,600
|
|
5,860
|
|
||||
Packaging & Specialty Plastics
|
6,099
|
|
5,428
|
|
12,109
|
|
10,810
|
|
||||
Materials Science
|
$
|
12,583
|
|
$
|
10,696
|
|
$
|
24,612
|
|
$
|
20,988
|
|
Electronics & Imaging
|
1,203
|
|
1,221
|
|
2,356
|
|
2,385
|
|
||||
Nutrition & Biosciences
|
1,775
|
|
1,494
|
|
3,495
|
|
2,918
|
|
||||
Transportation & Advanced Polymers
|
1,468
|
|
1,284
|
|
2,893
|
|
2,535
|
|
||||
Safety & Construction
|
1,411
|
|
1,329
|
|
2,710
|
|
2,542
|
|
||||
Specialty Products
|
$
|
5,857
|
|
$
|
5,328
|
|
$
|
11,454
|
|
$
|
10,380
|
|
Net Sales Variance by Division
1
|
Three Months Ended Jun 30, 2018
|
Six Months Ended Jun 30, 2018
|
||||||||||||||||||
Local Price & Product Mix
|
Currency
|
Volume
|
Portfolio / Other
2
|
Total
|
Local Price & Product Mix
|
Currency
|
Volume
|
Portfolio / Other
2
|
Total
|
|||||||||||
Percent change from prior year
|
||||||||||||||||||||
Agriculture
|
4
|
%
|
1
|
%
|
20
|
%
|
—
|
%
|
25
|
%
|
2
|
%
|
2
|
%
|
(5
|
)%
|
—
|
%
|
(1
|
)%
|
Materials Science
|
5
|
%
|
3
|
%
|
10
|
%
|
—
|
%
|
18
|
%
|
5
|
%
|
4
|
%
|
8
|
%
|
—
|
%
|
17
|
%
|
Specialty Products
|
1
|
%
|
3
|
%
|
4
|
%
|
2
|
%
|
10
|
%
|
2
|
%
|
3
|
%
|
3
|
%
|
2
|
%
|
10
|
%
|
Operating EBITDA by Division
|
Three Months Ended
|
Six Months Ended
|
||||||||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
1
|
Jun 30, 2018
|
Jun 30, 2017
1
|
||||||||
Agriculture
|
$
|
1,685
|
|
$
|
1,165
|
|
$
|
2,576
|
|
$
|
2,626
|
|
Performance Materials & Coatings
|
569
|
|
540
|
|
1,197
|
|
1,021
|
|
||||
Industrial Intermediates & Infrastructure
|
682
|
|
417
|
|
1,336
|
|
929
|
|
||||
Packaging & Specialty Plastics
|
1,330
|
|
1,163
|
|
2,631
|
|
2,277
|
|
||||
Materials Science
|
$
|
2,581
|
|
$
|
2,120
|
|
$
|
5,164
|
|
$
|
4,227
|
|
Electronics & Imaging
|
372
|
|
410
|
|
729
|
|
737
|
|
||||
Nutrition & Biosciences
|
433
|
|
318
|
|
851
|
|
635
|
|
||||
Transportation & Advanced Polymers
|
446
|
|
308
|
|
883
|
|
629
|
|
||||
Safety & Construction
|
341
|
|
262
|
|
695
|
|
554
|
|
||||
Specialty Products
|
$
|
1,592
|
|
$
|
1,298
|
|
$
|
3,158
|
|
$
|
2,555
|
|
1.
|
Information for the three and six months ended June 30, 2017, was prepared on a pro forma basis.
|
2.
|
Pro forma net sales for Agriculture excludes sales related to the November 30, 2017, divestiture of a portion of the DAS Divested Ag Business for the period January 1, 2017 through June 30, 2017. Pro forma net sales for Materials Science excludes sales related to the September 1, 2017, divestiture of the EAA Business for the period January 1, 2017 through June 30, 2017. Portfolio & Other includes sales for the acquisition of the H&N Business acquired on November 1, 2017, impacting Specialty Products. Portfolio & Other also reflects the following divestitures: SKC Haas Display Films group of companies (divested June 30, 2017), the authentication business (divested on January 6, 2017), and the divestiture of the global food safety diagnostic business (divested February 28, 2017), all impacting Specialty Products.
|
Cash Flow Summary
|
Six Months Ended
|
|||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
1
|
||||
Cash provided by (used for):
|
|
|
||||
Operating activities
|
$
|
(47
|
)
|
$
|
(101
|
)
|
Investing activities
|
(390
|
)
|
192
|
|
||
Financing activities
|
(3,602
|
)
|
(690
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(171
|
)
|
208
|
|
||
Summary
|
|
|
||||
Decrease in cash, cash equivalents and restricted cash
|
$
|
(4,210
|
)
|
$
|
(391
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
|
14,015
|
|
6,624
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
9,805
|
|
$
|
6,233
|
|
1.
|
Updated for ASU 2016-15 and ASU 2016-18. See Notes 1 and 2 to the Consolidated Financial Statements for additional information.
|
Net Working Capital
|
Jun 30, 2018
|
Dec 31, 2017
|
||||
In millions
|
||||||
Current assets
|
$
|
47,897
|
|
$
|
49,893
|
|
Current liabilities
|
28,110
|
|
26,128
|
|
||
Net working capital
|
$
|
19,787
|
|
$
|
23,765
|
|
Current ratio
|
1.70:1
|
|
1.91:1
|
|
Reconciliation of "Cash Used for Operating Activities" to Free Cash Flow
|
Six Months Ended
|
|||||
In millions
|
Jun 30, 2018
|
Jun 30, 2017
1
|
||||
Cash used for operating activities
|
$
|
(47
|
)
|
$
|
(101
|
)
|
Capital expenditures
|
(1,586
|
)
|
(1,549
|
)
|
||
Free Cash Flow
|
$
|
(1,633
|
)
|
$
|
(1,650
|
)
|
1.
|
"Cash used for operating activities" was updated for ASU 2016-15 and ASU 2016-18. See Notes 1 and 2 to the Consolidated Financial Statements for additional information.
|
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
|
Rating 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
|
Rating Watch Negative
|
Total Debt
|
Jun 30, 2018
|
Dec 31, 2017
|
||||||||||||||||
In millions
|
Dow
|
DuPont
|
Total
|
Dow
|
DuPont
|
Total
|
||||||||||||
Notes payable
|
$
|
862
|
|
$
|
1,932
|
|
$
|
2,794
|
|
$
|
484
|
|
$
|
1,464
|
|
$
|
1,948
|
|
Long-term debt due within one year
|
2,837
|
|
1,769
|
|
4,606
|
|
752
|
|
1,315
|
|
2,067
|
|
||||||
Long-term debt
|
17,122
|
|
9,728
|
|
26,850
|
|
19,765
|
|
10,291
|
|
30,056
|
|
||||||
Total debt
|
$
|
20,821
|
|
$
|
13,429
|
|
$
|
34,250
|
|
$
|
21,001
|
|
$
|
13,070
|
|
$
|
34,071
|
|
Contractual Obligations
|
Payments Due In
|
||||||||||||||
In millions
|
2018
|
2019-2020
|
2021-2022
|
2023 and beyond
|
Total
|
||||||||||
Purchase obligations
1
|
$
|
4,058
|
|
$
|
6,000
|
|
$
|
4,699
|
|
$
|
7,551
|
|
$
|
22,308
|
|
1.
|
Includes take-or-pay and throughput obligations and outstanding purchase orders and other commitments greater than $1 million, obtained through a survey conducted by the Subsidiaries.
|
Issuer Purchases of Equity Securities
|
|
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
|
Average price paid per share
|
||||||||
April 2018
|
—
|
|
$
|
—
|
|
—
|
|
$
|
2,000
|
|
May 2018
|
10,560,142
|
|
$
|
66.63
|
|
10,560,142
|
|
$
|
1,296
|
|
June 2018
|
4,438,216
|
|
$
|
66.77
|
|
4,438,216
|
|
$
|
1,000
|
|
Second quarter 2018
|
14,998,358
|
|
$
|
66.67
|
|
14,998,358
|
|
$
|
1,000
|
|
1.
|
On November 2, 2017, the Company announced the Board of Directors authorized an initial $4 billion share repurchase program, which has no expiration date.
|
Summary of Changes to the Consolidated Statements of Income
In millions
|
For the Years Ended Dec 31,
|
|||||||||||||||||
2017
As Filed
|
2017 Updated
1
|
2016
As Filed
|
2016 Updated
1
|
2015
As Filed
|
2015 Updated
1
|
|||||||||||||
Cost of sales
|
$
|
50,414
|
|
$
|
49,791
|
|
$
|
37,640
|
|
$
|
37,668
|
|
$
|
37,745
|
|
$
|
37,512
|
|
Research and development expenses
|
$
|
2,110
|
|
$
|
2,141
|
|
$
|
1,584
|
|
$
|
1,593
|
|
$
|
1,598
|
|
$
|
1,564
|
|
Selling, general and administrative expenses
|
$
|
4,021
|
|
$
|
4,064
|
|
$
|
2,956
|
|
$
|
2,953
|
|
$
|
2,948
|
|
$
|
2,898
|
|
Sundry income (expense) - net
|
$
|
966
|
|
$
|
417
|
|
$
|
1,452
|
|
$
|
1,486
|
|
$
|
4,716
|
|
$
|
4,399
|
|
Summary of Changes to the Consolidated Statements of Cash Flows
In millions
|
For the Years Ended Dec 31,
|
|||||||||||||||||
2017
As Filed
|
2017 Updated
1
|
2016
As Filed
|
2016 Updated
1
|
2015
As Filed
|
2015 Updated
1
|
|||||||||||||
Operating Activities
|
|
|
|
|
|
|
||||||||||||
Accounts and notes receivable
|
$
|
(2,589
|
)
|
$
|
(4,959
|
)
|
$
|
(1,539
|
)
|
$
|
(4,252
|
)
|
$
|
(84
|
)
|
$
|
(3,427
|
)
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
2,269
|
|
$
|
—
|
|
$
|
1,257
|
|
$
|
—
|
|
$
|
1,034
|
|
$
|
—
|
|
Other assets and liabilities, net
|
$
|
1,563
|
|
$
|
1,565
|
|
$
|
(717
|
)
|
$
|
(723
|
)
|
$
|
(48
|
)
|
$
|
(44
|
)
|
Cash provided by operating activities
|
$
|
8,695
|
|
$
|
4,058
|
|
$
|
5,600
|
|
$
|
1,624
|
|
$
|
7,607
|
|
$
|
3,234
|
|
Investing Activities
|
|
|
|
|
|
|
||||||||||||
Payment into escrow / trust accounts
|
$
|
(701
|
)
|
$
|
—
|
|
$
|
(835
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Distribution from escrow / trust accounts
|
$
|
143
|
|
$
|
—
|
|
$
|
835
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Acquisitions of property and businesses, net of cash acquired
|
$
|
19
|
|
$
|
50
|
|
$
|
(187
|
)
|
$
|
(187
|
)
|
$
|
(123
|
)
|
$
|
(123
|
)
|
Cash acquired in step acquisition of nonconsolidated affiliate
|
$
|
—
|
|
$
|
—
|
|
$
|
1,050
|
|
$
|
1,070
|
|
$
|
—
|
|
$
|
—
|
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
—
|
|
$
|
4,639
|
|
$
|
—
|
|
$
|
3,970
|
|
$
|
—
|
|
$
|
4,377
|
|
Cash provided by (used for) investing activities
|
$
|
4,274
|
|
$
|
9,502
|
|
$
|
(3,479
|
)
|
$
|
511
|
|
$
|
(1,350
|
)
|
$
|
3,027
|
|
Financing Activities
|
|
|
|
|
|
|
||||||||||||
Contingent payment for acquisition of businesses
|
$
|
—
|
|
$
|
(31
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Other financing activities, net
|
$
|
(1
|
)
|
$
|
(1
|
)
|
$
|
(2
|
)
|
$
|
(2
|
)
|
$
|
(88
|
)
|
$
|
(89
|
)
|
Cash used for financing activities
|
$
|
(6,523
|
)
|
$
|
(6,554
|
)
|
$
|
(4,014
|
)
|
$
|
(4,014
|
)
|
$
|
(3,132
|
)
|
$
|
(3,133
|
)
|
Summary
|
|
|
|
|
|
|
||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
6,831
|
|
$
|
7,391
|
|
$
|
(1,970
|
)
|
$
|
(1,956
|
)
|
$
|
2,923
|
|
$
|
2,926
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
$
|
6,607
|
|
$
|
6,624
|
|
$
|
8,577
|
|
$
|
8,580
|
|
$
|
5,654
|
|
$
|
5,654
|
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
13,438
|
|
$
|
14,015
|
|
$
|
6,607
|
|
$
|
6,624
|
|
$
|
8,577
|
|
$
|
8,580
|
|
1.
|
Reflects the adoption of ASU 2016-15 and ASU 2016-18. In connection with the review and implementation of ASU 2016-15, the Company also changed the value of “Proceeds from interests in trade accounts receivable conduits” due to additional interpretive guidance of the required method for calculating the cash received from beneficial interests in the conduits.
|
|
EXHIBIT NO.
|
|
DESCRIPTION
|
|
23
*
|
|
Ankura Consulting Group, LLC's Consent.
|
|
31.1
*
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
*
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
*
|
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
*
|
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
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.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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DowDuPont Inc.
Trademark Listing
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By:
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/s/ JEANMARIE F. DESMOND
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By:
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/s/ RONALD C. EDMONDS
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Name:
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Jeanmarie F. Desmond
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Name:
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Ronald C. Edmonds
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Title:
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Co-Controller
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Title:
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Co-Controller
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City:
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Wilmington
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City:
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Midland
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State:
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Delaware
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State:
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Michigan
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Ankura Consulting Group, LLC's Consent
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EXHIBIT 23
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Form S-8:
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Nos.
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333-220330
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333-220324
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/s/ B. THOMAS FLORENCE
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B. Thomas Florence
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Senior Managing Director
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Ankura Consulting Group, LLC
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August 3, 2018
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DowDupont Inc.
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EXHIBIT 31.1
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1.
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I have reviewed this quarterly report on Form 10-Q of DowDuPont Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ EDWARD D. BREEN
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Edward D. Breen
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Chief Executive Officer
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DowDupont Inc.
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EXHIBIT 31.2
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1.
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I have reviewed this quarterly report on Form 10-Q of DowDuPont Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ HOWARD I. UNGERLEIDER
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Howard I. Ungerleider
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Chief Financial Officer
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DowDupont Inc.
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EXHIBIT 32.1
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1.
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the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 30, 2018
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
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ EDWARD D. BREEN
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Edward D. Breen
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Chief Executive Officer
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August 3, 2018
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DowDupont Inc.
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EXHIBIT 32.2
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1.
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the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 30, 2018
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
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ HOWARD I. UNGERLEIDER
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Howard I. Ungerleider
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Chief Financial Officer
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August 3, 2018
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