Delaware
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81-1224539
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State or other jurisdiction of incorporation or organization
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(I.R.S. Employer Identification No.)
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c/o The Dow Chemical Company
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c/o E. I. du Pont de Nemours and Company
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2211 H.H. Dow Way, Midland, MI 48674
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974 Centre Road, Wilmington, DE 19805
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(989) 636-1000
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(302) 774-1000
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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*
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Europe, Middle East and Africa.
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Crop Application
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|||||||||
Key Product Lines
|
Canola
|
Cereals
|
Corn
|
Cotton
|
Range and Pasture
|
Rice
|
Soybeans
|
Sunflower
|
Trees, Fruits and Vegetables
|
Others
|
Seeds
|
x
|
x
|
x
|
x
|
|
x
|
x
|
x
|
|
x
|
Insecticides
|
x
|
x
|
x
|
x
|
|
x
|
x
|
x
|
x
|
x
|
Fungicides
|
|
x
|
x
|
|
|
x
|
x
|
|
x
|
x
|
Herbicides
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
Other
|
x
|
|
x
|
x
|
|
|
|
|
|
|
Key Product Lines
|
Brands and Technologies
|
Seed Brands
|
Pioneer®; BREVANT™ SEEDS; DAIRYLAND SEED®; MYCOGEN®; HOEGEMEYER®; NUTECH®; SEED CONSULTANTS®; TERRAL SEED®; AGVENTURE®; ALFOREX®; PHYTOGEN®; PANNAR®; VP MAXX®; RPM®; HPT®; G2®; SUPREME EX®; XL®; POWER PLUS®
|
Seed Traits and Technologies
|
ENLIST™ weed control system; ENLIST DUO® herbicide; ENLIST E3™ soybeans; EXZACT™ Precision Technology; HERCULEX® Insect Protection; Pioneer® brand hybrids with Leptra® insect protection technology offering protection against above ground pests; POWERCORE® Insect Trait Technology
1
; Pioneer® brand Optimum® AcreMax® family of products offering above and below ground insect protection; REFUGE ADVANCED® powered by SMARTSTAX®
1
; SMARTSTAX® Insect Trait Technology
1
;NEXERA® seed offering increased canola yield potential; Omega-9 Healthier Oils; Pioneer® brand Optimum® AQUAmax® hybrids; Pioneer® brand corn hybrids; Pioneer® brand A-Series soybeans; Pioneer® brand Plenish® high oleic soybeans; Pioneer® brand sunflowers with the DuPont™ ExpressSun® trait; Pioneer Protector® products for canola and sunflower; Pioneer MAXIMUS® rapeseed hybrids; PROPOUND™
|
Insecticides
|
CLOSER®, DELEGATE®, INTREPID®, ISOCLAST®, LANNATE®, EXALT™, PEXALON™, TRANSFORM®, VYDATE®, OPTIMUM®, RADIANT™, SENTRICON®, ENTRUST® SC, GF-120® and TRACER™
|
Fungicides
|
APPROACH® PRIMA, VESSARYA™, APPROACH POWER™, TALENDO™, TALIUS™, EQUATION PRO™, EQUATION CONTACT™, ZORVEC®, DITHANE®, INATREQ™, CURZATE®, TANOS®, FONTELIS®, ACANTO™ and GALILEO™
|
Herbicides
|
ARIGO™, ARYLEX®, ENLIST DUO®, BROADWAY™, RINSKOR®, ZYPAR™, MUSTANG™, GALLANT™, VERDICT™, LANCET™, KERB®, PIXXARO™, QUELEX®, GALLERY®, CENT-7™, SNAPSHOT®, TRELLIS®, CITADEL™, CLIPPER™, GRANITE™, RAINBOW™, PINDAR® GT, VIPER™, WIDEATTACK™, BELKAR™, WIDEMATCH®, PERFECTMATCH®, CLINCHER®, DURANGO®, FENCER™, GARLON®, SONIC®, TEXARO™, KEYSTONE®, PACTO™, LIGATE, DIMENSION®, TOPSHOT™, RICER™, LOYANT®, CLASSIC®, REALM® Q, TRIVENCE®, LONTREL®, GRAZON®, PANZER™, PRIMUS™, RESICORE®, SPIDER™, STARANE®, SURESTART™ and TORDON™
|
Other
|
LumiGEN™ technologies seed treatment portfolio of offerings - LUMIDERM™ and LUMIVIA®; GRANULAR®; ACREVALUE®; Encirca® services; INSTINCT®; N-SERVE® Nitrogen Stabilizer; and N-LOCK™
|
1.
|
SMARTSTAX® and POWERCORE
™
multi-event technology developed by Dow AgroSciences LLC and Monsanto Technology LLC. SMARTSTAX®, the SMARTSTAX® logo, POWERCORE
™
and the POWERCORE
™
logo are trademarks of Monsanto Technology LLC.
|
Business
|
Applications/Market Segments
|
Major Products
|
Coatings & Performance Monomers
|
Acrylic binders for architectural paints and coatings, industrial coatings and paper; adhesives; dispersants; impact modifiers; inks and paints; opacifiers and surfactants for both architectural and industrial applications; plastics additives; processing aids; protective and functional coatings; rheology modifiers
|
ACOUSTICRYL™ Liquid-Applied Sound Damping Technology; acrylates; ACRYSOL™ Rheology Modifiers; AVANSE™ Acrylic Binders; EVOQUE™ Pre-Composite Polymer; foam cell promoters; FORMASHIELD™ Acrylic Binder; high-quality impact modifiers; MAINCOTE™ Acrylic Epoxy Hybrid; methacrylates; processing aids; RHOPLEX™ Acrylic Resin; TAMOL™ Dispersants; vinyl acetate monomers; weatherable acrylic capstock compounds for thermoplastic and thermosetting materials
|
Consumer Solutions
|
Personal care, color cosmetics, baby care, home care and specialty applications with a key focus on hair care, skin care, sun care, cleansing, as well as fabric, dish, floor, hard surface and air care applications; commercial glazing; electrical and high-voltage insulation; lamp and luminaire modules assembly; oil and gas; paints and inks; release liners, specialty films and tapes; sporting goods; 3D printing
|
Adhesives and sealants; antifoams and surfactants; coatings and controlled release; coupling agents and crosslinkers; EVOLV3D™ Printing Technology; fluids, emulsions and dispersions;formulating and processing aids; granulation and binders; oils; polymers and emollients; opacifiers; reagents; resins, gels and powders; rheology modifiers; rubber; silicone elastomers; solubility
enhancers; aerospace composites; surfactants and solvents; SILASTIC ™ Silicone Elastomers; DOWSIL™ Silicone Products
|
•
|
EQUATE Petrochemical Company K.S.C.C. (“EQUATE”) - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned 42.5 percent by the Company.
|
•
|
The Kuwait Olefins Company K.S.C.C. (“TKOC”) - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned 42.5 percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited (“Map Ta Phut”) - a Thailand-based company that manufactures propylene and ethylene; the Company has an effective ownership of 32.77 percent (of which 20.27 percent is owned directly by the Company and aligned with the Industrial Intermediates & Infrastructure segment and 12.5 percent is owned indirectly through the Company’s equity interest in Siam Polyethylene Company Limited, an entity that is part of The SCG-Dow Group and aligned with the Packaging & Specialty Plastics segment).
|
•
|
Sadara Chemical Company ("Sadara") - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned 35 percent by the Company.
|
Business
|
Applications/Market Segments
|
Major Products
|
Hydrocarbons & Energy
|
Purchaser of feedstocks; production of cost competitive hydrocarbon monomers utilized by Dow derivative businesses; and energy,
principally for use in the company’s global operations
|
Ethylene, propylene, benzene, butadiene, octene, aromatics co-products, power, steam, other utilities
|
Packaging and Specialty Plastics
|
Adhesives; construction; cosmetics; electrical transmission and distribution; food and supply chain packaging; footwear; housewares; health and hygiene; industrial specialty applications using polyolefin elastomers, ethylene copolymers, and ethylene propylene diene monomer elastomers; irrigation pipe; photovoltaic encapsulants; sporting goods; telecommunications infrastructure; toys and
infant products
|
Acrylics, bio-based plasticizers, elastomers, ethylene copolymer resins, EPDM, ethylene vinyl acetate copolymer, methacrylic acid copolymer resins, polyethylene, high-density polyethylene, low-density polyethylene ("LDPE"), linear low-density polyethylene, polyolefin plastomers, resin additives and modifiers, semiconductive and jacketing compound solutions and wire and cable insulation
|
•
|
The Kuwait Styrene Company K.S.C.C. (“TKSC”) - a Kuwait-based company that manufactures styrene monomer; owned 42.5 percent by the Company.
|
•
|
The SCG-Dow Group - a group of Thailand-based companies (consisting of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Co., Ltd.; and Siam Synthetic Latex Company Limited) that manufacture polyethylene, polystyrene, styrene, latex and specialty elastomers; owned 50 percent by the Company.
|
•
|
Expansion of the capacity of Historical Dow’s new ethylene production facility, bringing the facility’s total ethylene capacity to 2,000 kilotonnes per annum ("KTA") and making it the largest ethylene facility in the world.
|
•
|
Incremental debottleneck projects across its global asset network that will deliver approximately 350 KTA of additional polyethylene, the majority of which will be in North America.
|
•
|
Construction of a 600 KTA polyethylene unit on the U.S. Gulf Coast based on Historical Dow’s proprietary Solution Process technology, to meet consumer-driven demand in specialty packaging, health and hygiene, and industrial and consumer packaging applications.
|
•
|
Construction of a 450 KTA polyolefins facility in Europe to maximize the value of Historical Dow’s ethylene integration in the region and serve growing demand for high-performance pressure pipes and fittings, as well as caps and closures applications.
|
•
|
A new catalyst production business for key catalysts licensed by Univation Technologies, LLC, a wholly-owned subsidiary of Historical Dow.
|
Major Product Line
|
Applications/Market Segments
|
Technologies
|
Semiconductor Technologies
|
Integrated circuit fabrication for memory and logic semiconductor fabrication
|
CMP consumables, photolithography materials, semiconductor fabrication materials, fabrication cleaners and removers, advanced chip packaging materials and thermal management materials
|
Interconnect Solutions
|
Printed circuit board, electronic and industrial finishing
|
Circuit packaging materials, interconnect metallization and imaging process chemistries, dry film laminates, and flexible circuit materials
|
Photovoltaic and Advanced Materials
|
Photovoltaics, aerospace/aircraft, automotive, military and consumer electronics
|
Metallization pastes, thick film pastes, polyvinyl fluoromaterials, silicone encapsulants and silane precursors
|
Advanced Printing
|
Flexographic printing and inkjet printing
|
Flexographic printing plates and materials and digital inks
|
Display Technologies
|
Display materials
|
OLED materials, Cd-free quantum dots, display process chemistries, LED encapsulants and display enhancement solutions
|
Business
|
Applications
|
Major Products
|
Nutrition & Health
|
Food and beverage, dietary supplements, infant nutrition, sports nutrition and oral dosage pharmaceuticals excipients
|
Cellulosic and other technologies help bring new classes of medicines to market and enable foods that are healthier (gluten-free, reduced oil/fat content). Notable technologies include excipients and active pharmaceutical ingredients, solubility enhancers, reagents, granulation and binders, as well as coatings and controlled release
Other major products include probiotics, soy protein, fibers, cultures, antioxidants, antimicrobials, emulsifiers, texturants, ingredient systems and sweeteners
|
Industrial Biosciences
|
Animal nutrition, detergents, biofuels production, food and beverage, carpet and apparel fiber, sulfuric acid, oil refining, phosphate fertilizer and microbial control solutions for oil and gas production, home and personal care, and other industrial preservation markets
|
Enzymes, BIO-PDO™ propanediol, SORONA® PTT polymer, yeast, betaine, direct-fed microbials, MECS® sulfuric acid technology, BELCO® clean air technologies, STRATCO® alkylation technology, ISOTHERMING® hydroprocessing, SILVADUR™ antimicrobial, glutaraldehyde, phenoxyethanol
|
Major Product Line
|
Major Products
|
Performance Resins
|
HYTREL® polyester thermoplastic elastomer resins, DELRIN® acetal resins, VAMAC® ethylene acrylic elastomer, and MULTIBASE™ TPSiV™ silicones for thermoplastics
|
Engineering Polymers
|
DUPONT™ ZYTEL® nylon resins, CRASTIN® PBT thermoplastic polyester resin, RYNITE® PET polyester resin and TYNEX® filaments
|
Performance Solutions
|
KALREZ® perfluoroelastomer, VESPEL® parts and shapes, MOLYKOTE® lubricants, DOW CORNING® silicone solutions for healthcare, BETASEAL™, BETAMATE™ and BETAFORCE™ structural and elastic adhesives
|
Major Product Line
|
Applications / Market Segments
|
Major Products / Technologies
|
Construction
|
Rigid and spray foam insulation, weatherization, waterproofing and air sealing, caulks and sealants and roof coatings
|
STYROFOAM™ brand insulation products, THERMAX™ exterior insulation, WALOCEL™ cellulose ethers, XENERGY™ high performance insulation, LIQUIDARMOR™ flashing and sealant, GREAT STUFF™ insulating foam sealants and adhesives, DUPONT™ CORIAN® solid and quartz surfaces
|
Aramids
|
Industrial personnel protection, military and emergency response, medical devices, automotive, aerospace, oil and gas
|
DUPONT™ KEVLAR® fiber; DUPONT™ NOMEX® fiber and paper
|
TYVEK®
Enterprise
|
Industrial personnel protection, medical packaging, weatherization, waterproofing and roof coatings
|
DUPONT™ TYVEK® protective materials; DUPONT™ TYCHEM® protective suits; WEATHERMATE™ house wrap
|
Water Solutions
|
Water filtration and purification technology for residential and industrial use. Key industries include municipal, power, electronics, pharmaceuticals, food and beverage, mining and oil and gas applications
|
DOWEX™ and AMBERLITE™ ion exchange resins, DOW FILMTEC™ reverse osmosis and nanofiltration elements, INTEGRAFLUX™ ultrafiltration modules and FORTILIFE™ challenging water reverse osmosis membranes
|
Patents Owned at Dec 31, 2018
|
United States
|
Foreign
|
||
Historical Dow
|
6,500
|
|
32,200
|
|
Historical DuPont
|
6,500
|
|
10,500
|
|
Total
|
13,000
|
|
42,700
|
|
Principal Nonconsolidated Affiliate
|
Country
|
Ownership Interest
|
Business Description
|
|
EQUATE Petrochemical Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins
|
The HSC Group:
|
|
|
|
|
DC HSC Holdings LLC
1
|
United States
|
50.00
|
%
|
Manufactures polycrystalline silicon products
|
Hemlock Semiconductor L.L.C.
|
United States
|
50.10
|
%
|
Sells polycrystalline silicon products
|
The Kuwait Olefins Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures ethylene and ethylene glycol
|
The Kuwait Styrene Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures styrene monomer
|
Map Ta Phut Olefins Company Limited
2
|
Thailand
|
32.77
|
%
|
Manufactures propylene and ethylene
|
Sadara Chemical Company
3
|
Saudi Arabia
|
35.00
|
%
|
Manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products and isocyanates
|
The SCG-Dow Group:
|
|
|
|
|
Siam Polyethylene Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures polyethylene
|
Siam Polystyrene Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures polystyrene
|
Siam Styrene Monomer Co., Ltd.
|
Thailand
|
50.00
|
%
|
Manufactures styrene
|
Siam Synthetic Latex Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures latex and specialty elastomers
|
1.
|
DC HSC Holdings LLC holds an 80.5 percent indirect ownership interest in Hemlock Semiconductor Operations LLC.
|
2.
|
Historical Dow's effective ownership of Map Ta Phut Olefins Company Limited is 32.77 percent, of which Historical Dow directly owns 20.27 percent and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited.
|
3.
|
Historical Dow is responsible for marketing the majority of Sadara products outside of the Middle East zone through Historical Dow's established sales channels. Under this arrangement, Historical Dow purchases and sells Sadara products for a marketing fee.
|
Name - Age
|
Present Position with Registrant
|
Year Elected to be an Officer
|
Other Business Experience since January 1, 2014
1
|
Edward D. Breen, 62
|
Chief Executive Officer
|
2017
|
DuPont: Board of Directors February 2015 to date; Interim Chair of the Board and CEO October 2015 to date; Immediately prior to joining DuPont, member of Comcast Corporation: Board of Directors February 2014 to date; New Mountain Capital LLC: Advisory Board Member.
|
James C. Collins, Jr., 56
|
Chief Operating Officer for the Agriculture Division
|
2017
|
DuPont: Executive Vice President Agriculture business January 2016 to date; Executive Vice President Electronics & Communications, Industrial Biosciences and Performance Materials businesses December 2014 to January 2016; Senior Vice President Performance Materials and Industrial Biosciences September 2013 to December 2014; President Industrial Biosciences and Vice President Acquisitions (DANISCO) January 2011 to September 2013.
|
Jeanmarie F. Desmond, 52
|
Co-Controller
|
2017
|
DuPont: Vice President & Controller August 2015 to date; General Auditor and Chief Ethics & Compliance Leader September 2014 to July 2015; Director, Corporate Accounting and Reporting 2013 to 2014.
|
C. Marc Doyle, 49
|
Chief Operating Officer for the Specialty Products Division
|
2017
|
DuPont: Executive Vice President Electronics & Communications, Protection Solutions, Sustainable Solutions, Industrial Biosciences, Nutrition & Health, and Performance Materials businesses January 2016 to date; Senior Vice President Safety & Protection businesses July 2015 to December 2015; President of DuPont Protection Technologies June 2013 to June 2015.
|
Ronald C. Edmonds, 61
|
Co-Controller
|
2017
|
Dow: Controller and Vice President of Controllers and Tax February 2016 to date; Vice President and Controller 2009 to 2016.
|
James R. Fitterling, 57
|
Chief Operating Officer for the Materials Science Division
|
2017
|
Dow: Chief Executive Officer July 2018 to date; President and Chief Operating Officer February 2016 to July 2018; Vice Chairman and Chief Operating Officer October 2015 to February 2016; Vice Chairman, Business Operations October 2014 to October 2015; Executive Vice President, Feedstocks, Performance Plastics and Supply Chain December 2013 to October 2014.
|
Stacy L. Fox, 65
|
General Counsel and Corporate Secretary
|
2017
|
DuPont: Senior Vice President and General Counsel October 2014 to date; Corporate Communications January 2016 to date; City of Detroit: Deputy Emergency Manager October 2013 to September 2014; Roxbury Group LLC: Principal March 2005 to date.
|
Howard I. Ungerleider, 50
|
Chief Financial Officer
|
2017
|
Dow: President and Chief Financial Officer July 2018 to date; Vice Chairman and Chief Financial Officer October 2015 to July 2018; Chief Financial Officer and Executive Vice President October 2014 to October 2015; Executive Vice President, Advanced Materials September 2012 to October 2014.
|
1.
|
References to Dow and DuPont in the table above refer to The Dow Chemical Company and E. I. du Pont de Nemours and Company, respectively.
|
•
|
ongoing diversion of the attention of management from the operation of the combined Company’s business as a result of the Intended Business Separations;
|
•
|
impact of portfolio changes between materials science and specialty products on integration and separation preparation activities;
|
•
|
difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects;
|
•
|
the possibility of faulty assumptions underlying expectations regarding the integration or separation process, including with respect to the intended tax efficient transactions;
|
•
|
unanticipated issues in integrating, replicating or separating information technology, communications programs, financial procedures and operations, and other systems, procedures and policies;
|
•
|
difficulties in managing a larger combined company, addressing differences in business culture and retaining key personnel;
|
•
|
unanticipated changes in applicable laws and regulations;
|
•
|
managing tax costs or inefficiencies associated with integrating the operations of the combined Company and the intended tax efficient separation transactions; and
|
•
|
coordinating geographically separate organizations.
|
•
|
difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
|
•
|
unexpected changes in political or regulatory environments;
|
•
|
labor compliance and costs associated with a global workforce;
|
•
|
earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs;
|
•
|
exchange controls or other restrictions;
|
•
|
restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States;
|
•
|
political and economic instability;
|
•
|
import and export restrictions and other trade barriers;
|
•
|
difficulties in maintaining overseas subsidiaries and international operations;
|
•
|
difficulties in obtaining approval for significant transactions;
|
•
|
government limitations on foreign ownership;
|
•
|
government takeover or nationalization of business;
|
•
|
government mandated price controls; and
|
•
|
fluctuations in foreign currency exchange rates.
|
Number of Manufacturing Sites at Dec 31, 2018
1
|
||||||||||||||||
Geographic Region
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
||||||||
U.S. & Canada
|
65
|
|
23
|
|
13
|
|
15
|
|
17
|
|
30
|
|
19
|
|
15
|
|
EMEA
|
27
|
|
17
|
|
18
|
|
8
|
|
5
|
|
45
|
|
8
|
|
12
|
|
Asia Pacific
|
16
|
|
19
|
|
8
|
|
5
|
|
17
|
|
18
|
|
15
|
|
13
|
|
Latin America
|
28
|
|
6
|
|
7
|
|
7
|
|
—
|
|
15
|
|
2
|
|
3
|
|
Total
|
136
|
|
65
|
|
46
|
|
35
|
|
39
|
|
108
|
|
44
|
|
43
|
|
1.
|
Sites that are used by multiple segments are included more than once in the figures above.
|
Issuer Purchases of Equity Securities
|
Average price paid per share
|
Total number of shares purchased as part of the Company's publicly announced share repurchase
program
1
|
Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program
1
(In millions)
|
|||||||
Period
|
Total number of shares purchased
|
|||||||||
October 2018
|
—
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
November 2018
|
9,957,595
|
|
$
|
57.94
|
|
9,957,595
|
|
$
|
2,423
|
|
December 2018
|
15,734,165
|
|
$
|
53.66
|
|
15,734,165
|
|
$
|
1,579
|
|
Fourth quarter 2018
|
25,691,760
|
|
$
|
55.32
|
|
25,691,760
|
|
$
|
1,579
|
|
1.
|
On November 1, 2018, the Company announced a new $3 billion share buyback program, which expires on March 31, 2019 - commensurate with the expected timing of the materials science spin-off.
|
Cumulative Total Return
|
DowDuPont
|
S&P 500
|
S&P 500 Chemicals
|
||||||
September 1, 2017
|
$
|
100
|
|
$
|
100
|
|
$
|
100
|
|
December 29, 2017
|
$
|
107
|
|
$
|
109
|
|
$
|
110
|
|
December 31, 2018
|
$
|
82
|
|
$
|
104
|
|
$
|
98
|
|
Selected Financial Data
1
|
|
|
|
|
|
||||||||||
In millions, except as noted (Unaudited)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Summary of Operations
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
85,977
|
|
$
|
62,484
|
|
$
|
48,158
|
|
$
|
48,778
|
|
$
|
58,167
|
|
Income from continuing operations, net of tax
2
|
$
|
4,004
|
|
$
|
1,669
|
|
$
|
4,404
|
|
$
|
7,783
|
|
$
|
3,839
|
|
Loss from discontinued operations, net of tax
|
$
|
(5
|
)
|
$
|
(77
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Per share of common stock (in dollars):
|
|
|
|
|
|
||||||||||
Earnings per common share from continuing operations - basic
2
|
$
|
1.66
|
|
$
|
0.97
|
|
$
|
3.57
|
|
$
|
6.45
|
|
$
|
2.91
|
|
Earnings per common share from continuing operations - diluted
2
|
$
|
1.65
|
|
$
|
0.95
|
|
$
|
3.52
|
|
$
|
6.15
|
|
$
|
2.87
|
|
Loss per common share from discontinued operations - basic
|
$
|
—
|
|
$
|
(0.05
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Loss per common share from discontinued operations - diluted
|
$
|
—
|
|
$
|
(0.04
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Cash dividends declared per share of common stock
|
$
|
1.52
|
|
$
|
1.76
|
|
$
|
1.84
|
|
$
|
1.72
|
|
$
|
1.53
|
|
Book value per share of common stock
|
$
|
41.80
|
|
$
|
43.30
|
|
$
|
21.70
|
|
$
|
23.06
|
|
$
|
19.71
|
|
Year-end Financial Position
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
188,030
|
|
$
|
192,164
|
|
$
|
79,511
|
|
$
|
67,938
|
|
$
|
68,639
|
|
Long-term debt
|
$
|
37,662
|
|
$
|
30,056
|
|
$
|
20,456
|
|
$
|
16,215
|
|
$
|
18,741
|
|
|
|
|
|
|
|
||||||||||
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|||||
Research and development expenses as percent of net sales
3
|
3.6
|
%
|
3.4
|
%
|
3.3
|
%
|
3.2
|
%
|
2.8
|
%
|
|||||
Income from continuing operations before income taxes as percent of net sales
2
|
6.4
|
%
|
1.9
|
%
|
9.2
|
%
|
20.4
|
%
|
9.1
|
%
|
|||||
Return on stockholders' equity
2
|
4.1
|
%
|
1.5
|
%
|
15.3
|
%
|
34.4
|
%
|
18.6
|
%
|
|||||
Debt as a percent of total capitalization
|
29.6
|
%
|
25.1
|
%
|
44.0
|
%
|
39.7
|
%
|
45.5
|
%
|
1.
|
The year ended December 31, 2017, reflects the results of Historical Dow for the entire year and the results of Historical DuPont for the period beginning on and after September 1, 2017. The years ended December 31, 2016, 2015 and 2014 solely reflect the results of Historical Dow.
|
2.
|
See Notes
1
,
3
,
6
,
7
,
8
,
13
,
15
,
16
and
19
to the Consolidated Financial Statements for information on items materially impacting the results for the years ended
December 31, 2018
,
2017
and
2016
, including the effects of the U.S. Tax Cuts and Jobs Act, enacted on December 22, 2017; Merger-related amortization of the fair value step-up of inventories; loss on early redemption of debt; gains on divestitures; integration and separation costs; charges related to restructuring programs; goodwill impairment and other asset related charges; a charge related to payment of plan obligations to certain participants of a Historical Dow U.S. non-qualified pension plan; and the impact of a change in accounting policy for asbestos-related defense and processing costs.
|
3.
|
The retrospective adoption of ASU 2017-07 in the first quarter of 2018 resulted in an update to this ratio for 2015. The adoption did not impact the ratio for the remaining periods.
|
Table of Contents
|
Page
|
•
|
The Company reported net sales for
2018
of $86.0 billion, up 38 percent from $62.5 billion in
2017
, with broad-based sales growth across all segments and geographic regions. Portfolio & Other contributed 29 percent of the sales increase, primarily reflecting the Merger as a full year of net sales in 2018 related to Historical DuPont compared with four months in 2017, which impacted all segments except Performance Materials & Coatings and Industrial Intermediates & Infrastructure.
|
•
|
Volume increased 4 percent compared with the same period last year, with increases in all segments, except Performance Materials & Coatings and Transportation & Advanced Polymers (both down 2 percent) and Nutrition & Biosciences (flat). Volume increased in all geographic regions, except U.S. & Canada (flat), led by a double-digit increase in Asia Pacific (up 13 percent).
|
•
|
Local price was up 4 percent compared with last year, primarily in response to higher feedstock and raw material costs. Local price increased in all segments, except Electronics & Imaging (flat). Local price increased in all geographic regions.
|
•
|
Currency had a favorable impact of 1 percent on sales, driven by a favorable impact in EMEA, partially offset by an unfavorable impact in Latin America.
|
•
|
Research and development ("R&D") expenses totaled $3,060 million in
2018
, up 43 percent from $2,141 million in
2017
. Selling, general and administrative ("SG&A") expenses were $6,709 million in
2018
, up 65 percent from $4,064 million in
2017
. R&D and SG&A expenses increased primarily due to the Merger, as 2018 included a full year of expenses related to Historical DuPont, compared with four months in 2017.
|
•
|
Restructuring, goodwill impairment and asset related charges - net was $1,105 million in
2018
, primarily reflecting post-merger restructuring actions under the DowDuPont Cost Synergy Program of $869 million and the DowDuPont Agriculture Division Restructuring Program of $84 million; as well as pretax impairment charges of $160 million related to certain in-process research and development, an equity method investment and capital additions made to a manufacturing facility in Brazil.
|
•
|
Integration and separation costs were $2,463 million in
2018
, up from $1,101 million in
2017
, reflecting post-Merger integration and Intended Business Separation activities.
|
•
|
Equity in earnings of nonconsolidated affiliates was $1,001 million in 2018, up from $764 million in 2017, as higher earnings from the Kuwait joint ventures, lower equity losses from Sadara Chemical Company ("Sadara") and higher earnings from the HSC Group were partially offset by lower equity earnings from the Thai joint ventures.
|
•
|
Net income available for common stockholders was
$3,844 million
(
$1.65
per share) in
2018
, compared with
$1,460 million
(
$0.91
per share) in
2017
.
|
•
|
In November 2018, DowDuPont consummated the offering of senior unsecured DowDuPont Notes in an aggregate principal amount of $12.7 billion, with various maturities through 2048. The net proceeds of the offering after the underwriting discount were $12.6 billion.
|
•
|
In November 2018, $4.4 billion aggregate principal amount of Historical DuPont's outstanding debt securities were validly tendered and accepted for payment. In exchange, Historical DuPont paid a total of $4.8 billion, which included breakage fees and all related accrued and unpaid interest on the tender notes.
|
•
|
In the fourth quarter of 2018, Historical Dow issued
$2.0 billion
of senior unsecured notes with various maturities through 2048, and tendered and redeemed
$2.1 billion
of notes issued by Historical Dow.
|
•
|
In
2018
, Historical Dow and Historical DuPont each made discretionary contributions of
$1,100 million
to their respective principal U.S. pension plans.
|
•
|
On November 1, 2018, the Company announced a new $3.0 billion share buyback program, which expires on March 31, 2019 - commensurate with the expected timing of the materials science spin-off. At December 31, 2018, the Company had repurchased $1.4 billion of shares under this program. The Company intends to complete the program before March 31, 2019.
|
•
|
On November 1, 2018, the Company increased its cost synergy target under the DowDuPont Synergy Program to $3.6 billion.
|
Summary of Sales Results
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
85,977
|
|
$
|
62,484
|
|
$
|
48,158
|
|
Pro forma net sales
|
|
$
|
79,535
|
|
$
|
70,894
|
|
1.
|
Portfolio & Other primarily reflects sales related to the Merger (impacts all segments, except Performance Materials & Coatings and Industrial Intermediates & Infrastructure). Portfolio & Other also 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: 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). In addition, Portfolio & Other in 2017 includes the ownership restructure of Dow Silicones announced on June 1, 2016 (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers).
|
Sales Variances by Segment and Geographic Region - As Reported
|
|
|
|
|
|
|||||
|
2016
|
|||||||||
Percentage change from prior year
|
Local Price & Product Mix
|
Currency
|
Volume
|
Portfolio & Other
1
|
Total
|
|||||
Agriculture
|
1
|
%
|
(1
|
)%
|
(2
|
)%
|
—
|
%
|
(2
|
)%
|
Performance Materials & Coatings
|
(8
|
)
|
(1
|
)
|
(2
|
)
|
52
|
|
41
|
|
Industrial Intermediates & Infrastructure
|
(9
|
)
|
(1
|
)
|
2
|
|
(4
|
)
|
(12
|
)
|
Packaging & Specialty Plastics
|
(8
|
)
|
—
|
|
9
|
|
(1
|
)
|
—
|
|
Electronics & Imaging
|
(3
|
)
|
—
|
|
3
|
|
16
|
|
16
|
|
Nutrition & Biosciences
|
(2
|
)
|
—
|
|
(2
|
)
|
—
|
|
(4
|
)
|
Transportation & Advanced Polymers
|
(1
|
)
|
(1
|
)
|
7
|
|
49
|
|
54
|
|
Safety & Construction
|
(1
|
)
|
—
|
|
(2
|
)
|
—
|
|
(3
|
)
|
Total
|
(6
|
)%
|
—
|
%
|
3
|
%
|
2
|
%
|
(1
|
)%
|
U.S. & Canada
|
(7
|
)%
|
—
|
%
|
3
|
%
|
2
|
%
|
(2
|
)%
|
EMEA
|
(6
|
)
|
(1
|
)
|
4
|
|
(1
|
)
|
(4
|
)
|
Asia Pacific
|
(6
|
)
|
—
|
|
6
|
|
9
|
|
9
|
|
Latin America
|
(6
|
)
|
—
|
|
—
|
|
(1
|
)
|
(7
|
)
|
Total
|
(6
|
)%
|
—
|
%
|
3
|
%
|
2
|
%
|
(1
|
)%
|
1.
|
Portfolio & Other reflects sales from June 1, 2016 through December 31, 2016 related to the ownership restructure of Dow Silicones (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers) and sales from January 1, 2016 through April 30, 2016 for the step acquisition of Univation Technologies, LLC, acquired on May 5, 2015 (Packaging & Specialty Plastics). Portfolio & Other also reflects the following divestitures: the chlorine value chain, divested on October 5, 2015 (Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics), ANGUS Chemical Company, divested on February 2, 2015 and the global Sodium Borohydride business, divested on January 30, 2015 (both included in Industrial Intermediates & Infrastructure).
|
1.
|
As reported net sales in the current period compared with pro forma net sales in the prior period.
|
2.
|
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, 2016 through August 31, 2017; sales from September 1, 2017 through November 30, 2017, are included in Portfolio & Other. 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, 2016 through August 31, 2017. Portfolio & Other includes sales for the acquisition of the H&N Business acquired on November 1, 2017, impacting Nutrition & Biosciences. Portfolio & Other also reflects 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. In 2017, Portfolio & Other also reflects sales from January 1, 2017 through May 31, 2017, related to the ownership restructure of Dow Silicones on June 1, 2016 (impacts Performance Materials & Coatings, Electronics & Imaging and Transportation & Advanced Polymers).
|
Unaudited Pro Forma Combined
Statement of Income
|
Year Ended Dec 31, 2017
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
DWDP
1, 2
|
Historical DuPont
2, 3
|
Reclass
2, 4
|
Divestitures
5
|
Pro Forma
6
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
62,484
|
|
$
|
18,349
|
|
$
|
84
|
|
$
|
(1,219
|
)
|
$
|
(163
|
)
|
$
|
79,535
|
|
Cost of sales
|
49,791
|
|
10,464
|
|
387
|
|
(523
|
)
|
65
|
|
60,184
|
|
||||||
Other operating charges
|
—
|
|
521
|
|
(521
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
2,141
|
|
1,117
|
|
(27
|
)
|
(104
|
)
|
19
|
|
3,146
|
|
||||||
Selling, general and administrative expenses
|
4,064
|
|
3,368
|
|
(583
|
)
|
(143
|
)
|
29
|
|
6,735
|
|
||||||
Other (loss) income, net
|
—
|
|
(106
|
)
|
106
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
1,013
|
|
—
|
|
139
|
|
—
|
|
591
|
|
1,743
|
|
||||||
Restructuring, goodwill impairment and asset related charges - net
|
3,280
|
|
323
|
|
—
|
|
—
|
|
(10
|
)
|
3,593
|
|
||||||
Integration and separation costs
|
1,101
|
|
—
|
|
605
|
|
(24
|
)
|
(183
|
)
|
1,499
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
764
|
|
—
|
|
55
|
|
—
|
|
(15
|
)
|
804
|
|
||||||
Sundry income (expense) - net
|
417
|
|
—
|
|
(278
|
)
|
(12
|
)
|
—
|
|
127
|
|
||||||
Interest expense and amortization of debt discount
|
1,082
|
|
254
|
|
—
|
|
—
|
|
(80
|
)
|
1,256
|
|
||||||
Income from continuing operations before income taxes
|
1,193
|
|
2,196
|
|
(33
|
)
|
(437
|
)
|
(609
|
)
|
2,310
|
|
||||||
Provision (Credit) for income taxes on continuing operations
|
(476
|
)
|
228
|
|
(33
|
)
|
(88
|
)
|
(233
|
)
|
(602
|
)
|
||||||
Income from continuing operations, net of tax
|
1,669
|
|
1,968
|
|
—
|
|
(349
|
)
|
(376
|
)
|
2,912
|
|
||||||
Net income attributable to noncontrolling interests
|
132
|
|
20
|
|
—
|
|
—
|
|
7
|
|
159
|
|
||||||
Net income from continuing operations attributable to DowDuPont Inc.
|
1,537
|
|
1,948
|
|
—
|
|
(349
|
)
|
(383
|
)
|
2,753
|
|
||||||
Preferred stock dividends
|
—
|
|
7
|
|
—
|
|
—
|
|
(7
|
)
|
—
|
|
||||||
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
1,537
|
|
$
|
1,941
|
|
$
|
—
|
|
$
|
(349
|
)
|
$
|
(376
|
)
|
$
|
2,753
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
1.18
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
1.17
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,323.9
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,346.1
|
|
1.
|
See the U.S. GAAP consolidated statements of income.
|
2.
|
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 applied retrospectively.
|
3.
|
Reflects Historical DuPont activity for the period from January 1, 2017 to August 31, 2017.
|
4.
|
Certain reclassifications were made to conform with the presentation used for DowDuPont.
|
5.
|
Includes the following divestitures agreed to with certain regulatory agencies as a condition of approval for the Merger: Historical Dow’s EAA Business; the DAS Divested Ag Business; and Historical DuPont’s cereal broadleaf herbicides and chewing insecticides portfolio as well as its crop protection research and development pipeline and organization.
|
6.
|
Certain pro forma adjustments were made to illustrate the estimated effects of the Merger, assuming that the Merger had been consummated on January 1, 2016. Refer to
Summary of Pro Forma Adjustments
at the end of this section for additional details.
|
Unaudited Pro Forma Combined
Statement of Income
|
Year Ended Dec 31, 2016
|
|||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||
In millions, except per share amounts
|
Historical Dow
1, 2
|
Historical DuPont
2, 3
|
Reclass
2, 4
|
Divestitures
5
|
Pro Forma
6
|
Pro Forma
|
||||||||||||
Net sales
|
$
|
48,158
|
|
$
|
24,594
|
|
$
|
170
|
|
$
|
(1,812
|
)
|
$
|
(216
|
)
|
$
|
70,894
|
|
Cost of sales
|
37,668
|
|
14,451
|
|
559
|
|
(783
|
)
|
110
|
|
52,005
|
|
||||||
Other operating charges
|
—
|
|
686
|
|
(686
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Research and development expenses
|
1,593
|
|
1,635
|
|
(40
|
)
|
(153
|
)
|
29
|
|
3,064
|
|
||||||
Selling, general and administrative expenses
|
3,302
|
|
4,303
|
|
(762
|
)
|
(203
|
)
|
43
|
|
6,683
|
|
||||||
Other (loss) income, net
|
—
|
|
668
|
|
(668
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of intangibles
|
544
|
|
—
|
|
194
|
|
—
|
|
886
|
|
1,624
|
|
||||||
Restructuring, goodwill impairment and asset related charges - net
|
452
|
|
552
|
|
143
|
|
4
|
|
—
|
|
1,151
|
|
||||||
Integration and separation costs
|
—
|
|
—
|
|
735
|
|
—
|
|
(259
|
)
|
476
|
|
||||||
Asbestos-related charge
|
1,113
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,113
|
|
||||||
Equity in earnings of nonconsolidated affiliates
|
442
|
|
—
|
|
99
|
|
—
|
|
(25
|
)
|
516
|
|
||||||
Sundry income (expense) - net
|
1,236
|
|
—
|
|
671
|
|
(10
|
)
|
—
|
|
1,897
|
|
||||||
Interest income
|
107
|
|
—
|
|
(107
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense and amortization of debt discount
|
858
|
|
370
|
|
—
|
|
—
|
|
(120
|
)
|
1,108
|
|
||||||
Income from continuing operations before income taxes
|
4,413
|
|
3,265
|
|
22
|
|
(687
|
)
|
(930
|
)
|
6,083
|
|
||||||
Provision for income taxes on continuing operations
|
9
|
|
744
|
|
22
|
|
(160
|
)
|
(327
|
)
|
288
|
|
||||||
Income from continuing operations, net of tax
|
4,404
|
|
2,521
|
|
—
|
|
(527
|
)
|
(603
|
)
|
5,795
|
|
||||||
Net income attributable to noncontrolling interests
|
86
|
|
12
|
|
—
|
|
—
|
|
10
|
|
108
|
|
||||||
Net income attributable to DowDuPont Inc.
|
4,318
|
|
2,509
|
|
—
|
|
(527
|
)
|
(613
|
)
|
5,687
|
|
||||||
Preferred stock dividends
|
340
|
|
10
|
|
—
|
|
—
|
|
(10
|
)
|
340
|
|
||||||
Net income available for DowDuPont Inc. common stockholders
|
$
|
3,978
|
|
$
|
2,499
|
|
$
|
—
|
|
$
|
(527
|
)
|
$
|
(603
|
)
|
$
|
5,347
|
|
|
|
|
|
|
|
|
||||||||||||
Per common share data:
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations - basic
|
|
|
|
$
|
2.40
|
|
||||||||||||
Earnings per common share from continuing operations - diluted
|
|
|
|
$
|
2.37
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding - basic
|
|
|
|
2,221.3
|
|
|||||||||||||
Weighted-average common shares outstanding - diluted
|
|
|
|
2,242.1
|
|
1.
|
See the consolidated statements of income included in Historical Dow's Annual Report on Form 10-K for the year ended December 31, 2016.
|
2.
|
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 applied retrospectively.
|
3.
|
See the consolidated statements of income included in Historical DuPont's Annual Report on Form 10-K for the year ended December 31, 2016.
|
4.
|
Certain reclassifications were made to conform with the presentation used for DowDuPont. The reclassifications are consistent with those identified and disclosed in the Current Report on Form 8-K/A filed with the SEC on October 26, 2017. Additionally, in the fourth quarter of 2017, to improve comparability and conform to the current period presentation, the Company reclassified $143 million of asset impairment charges from "Sundry income (expense) - net" to "Restructuring, goodwill impairment and asset related charges - net."
|
5.
|
Includes the following divestitures agreed to with certain regulatory agencies as a condition of approval for the Merger: Historical Dow’s EAA Business; the DAS Divested Ag Business; and Historical DuPont’s cereal broadleaf herbicides and chewing insecticides portfolio as well as its crop protection research and development pipeline and organization.
|
6.
|
Certain pro forma adjustments were made to illustrate the estimated effects of the Merger, assuming that the Merger had been consummated on January 1, 2016. Refer to
Summary of Pro Forma Adjustments
at the end of this section for additional details.
|
Summary of Pro Forma Adjustments
|
Year Ended
|
|||||
In millions (Unaudited)
|
Dec 31, 2017
|
Dec 31, 2016
|
||||
Net sales
|
|
|
||||
Intercompany transactions
1
|
$
|
(163
|
)
|
$
|
(216
|
)
|
Cost of sales
|
|
|
||||
Intercompany transactions
1
|
$
|
(163
|
)
|
$
|
(216
|
)
|
Policy harmonization
2
|
11
|
|
—
|
|
||
Depreciation expense
3
|
217
|
|
326
|
|
||
Total cost of sales
|
$
|
65
|
|
$
|
110
|
|
Research and development expenses
|
|
|
||||
Depreciation expense
3
|
$
|
19
|
|
$
|
29
|
|
Selling, general and administrative expenses
|
|
|
||||
Depreciation expense
3
|
$
|
29
|
|
$
|
43
|
|
Amortization of intangibles
|
|
|
||||
Amortization expense
4
|
$
|
591
|
|
$
|
886
|
|
Restructuring, goodwill impairment and asset related charges - net
|
|
|
||||
Transaction costs
5
|
$
|
(10
|
)
|
$
|
—
|
|
Integration and separation costs
|
|
|
||||
Transaction costs
5
|
$
|
(183
|
)
|
$
|
(259
|
)
|
Equity in earnings of nonconsolidated affiliates
|
|
|
||||
Fair value of nonconsolidated affiliates
6
|
$
|
(15
|
)
|
$
|
(25
|
)
|
Interest expense and amortization of debt discount
|
|
|
||||
Amortization of debt discount
7
|
$
|
(80
|
)
|
$
|
(120
|
)
|
Total pro forma adjustments to income from continuing operations before income taxes
|
$
|
(609
|
)
|
$
|
(930
|
)
|
Provision for income taxes on continuing operations
8
|
|
|
||||
Policy harmonization
2
|
$
|
(4
|
)
|
$
|
—
|
|
Depreciation expense
3
|
(91
|
)
|
(132
|
)
|
||
Amortization expense
4
|
(184
|
)
|
(280
|
)
|
||
Transaction costs
5
|
22
|
|
49
|
|
||
Fair value of nonconsolidated affiliates
6
|
(5
|
)
|
(8
|
)
|
||
Amortization of debt discount
7
|
29
|
|
44
|
|
||
Total provision for income taxes on continuing operations
|
$
|
(233
|
)
|
$
|
(327
|
)
|
Total pro forma adjustments to income from continuing operations, net of tax
|
$
|
(376
|
)
|
$
|
(603
|
)
|
Net income attributable to noncontrolling interests
|
|
|
||||
Reclass historical dividends
9
|
$
|
7
|
|
$
|
10
|
|
Net income from continuing operations attributable to DowDuPont Inc.
|
$
|
(383
|
)
|
$
|
(613
|
)
|
Preferred stock dividends
|
|
|
||||
Reclass historical dividends
9
|
$
|
(7
|
)
|
$
|
(10
|
)
|
Net income from continuing operations available for DowDuPont Inc. common stockholders
|
$
|
(376
|
)
|
$
|
(603
|
)
|
1.
|
Elimination of intercompany transactions between Historical Dow and Historical DuPont.
|
2.
|
Adjustment to conform Historical DuPont's accounting policy of deferring and amortizing expense for planned major maintenance activities with Historical Dow's accounting policy of directly expensing the costs as incurred.
|
3.
|
Increase in depreciation expense for the fair value step-up of Historical DuPont's property, plant and equipment.
|
4.
|
Increase in amortization expense for the fair value step-up of Historical DuPont's finite-lived intangibles.
|
5.
|
Elimination of one-time transaction costs directly attributable to the Merger.
|
6.
|
Decrease in equity in earnings of nonconsolidated affiliates for the fair value adjustment to Historical DuPont's investment in nonconsolidated affiliates.
|
7.
|
Decrease in interest expense related to amortization of the fair value adjustment to Historical DuPont's long-term debt.
|
8.
|
Represents the income tax effect of the pro forma adjustments related to the Merger calculated using a blended statutory income tax rate, inclusive of state taxes. Management believes the blended statutory income tax rate resulting from this calculation provides a reasonable basis for the pro forma adjustments, however the effective tax rate of DowDuPont could be significantly different depending on the mix of activities.
|
9.
|
Reclassify historical dividends for Historical DuPont preferred stock from "Preferred stock dividends" to "Net income attributable to noncontrolling interests."
|
•
|
Realignment of the HSC Group joint ventures (DC HSC Holdings LLC and Hemlock Semiconductor L.L.C.) from the Consumer Solutions global business in the Performance Materials & Coatings reportable segment to the Electronics & Imaging reportable segment.
|
•
|
Realignment of certain cellulosics product lines from the Nutrition & Health operating segment in the Nutrition & Biosciences reportable segment to the Consumer Solutions global business in the Performance Materials & Coatings reportable segment.
|
•
|
Certain roofing products were realigned from the Building Solutions product line in the Safety & Construction reportable segment to Corporate.
|
•
|
Realignment of the previously divested Epoxy and Chlorinated Organics global businesses from the Industrial Intermediates & Infrastructure reportable segment to Corporate.
|
•
|
In addition, the following realignments within the Industrial Intermediates & Infrastructure reportable segment were made, which had no effect on the segment results:
|
–
|
The Construction Chemicals global business was combined with the Polyurethanes & CAV global business.
|
–
|
Certain product lines associated with the oil and gas industry were realigned from the Industrial Solutions global business to the Polyurethanes & CAV global business.
|
Agriculture
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
14,301
|
|
$
|
7,516
|
|
$
|
6,173
|
|
Pro forma net sales
|
|
$
|
14,342
|
|
$
|
14,060
|
|
||
Operating EBITDA
1
|
$
|
2,705
|
|
$
|
2,611
|
|
$
|
2,322
|
|
Equity earnings
|
$
|
—
|
|
$
|
3
|
|
$
|
5
|
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Agriculture
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
3
|
%
|
(1
|
)%
|
1
|
%
|
Currency
|
(2
|
)
|
—
|
|
(1
|
)
|
Volume
|
1
|
|
(2
|
)
|
(2
|
)
|
Portfolio & other
|
88
|
|
25
|
|
—
|
|
Total
|
90
|
%
|
22
|
%
|
(2
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
3
|
|
—
|
%
|
|
|
Currency
|
—
|
|
—
|
|
|
|
Volume
|
(2
|
)
|
1
|
|
|
|
Portfolio & other
|
(1
|
)
|
1
|
|
|
|
Total
|
—
|
%
|
2
|
%
|
|
1.
|
As reported net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Performance Materials & Coatings
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
10
|
%
|
8
|
%
|
(8
|
)%
|
Currency
|
1
|
|
—
|
|
(1
|
)
|
Volume
|
(2
|
)
|
2
|
|
(2
|
)
|
Portfolio & other
|
—
|
|
27
|
|
52
|
|
Total
|
9
|
%
|
37
|
%
|
41
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
10
|
%
|
8
|
%
|
|
|
Currency
|
1
|
|
—
|
|
|
|
Volume
|
(2
|
)
|
2
|
|
|
|
Portfolio & other
|
—
|
|
27
|
|
|
|
Total
|
9
|
%
|
37
|
%
|
|
1.
|
As reported net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Industrial Intermediates & Infrastructure
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
5
|
%
|
10
|
%
|
(9
|
)%
|
Currency
|
1
|
|
—
|
|
(1
|
)
|
Volume
|
14
|
|
7
|
|
2
|
|
Portfolio & other
|
—
|
|
—
|
|
(4
|
)
|
Total
|
20
|
%
|
17
|
%
|
(12
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
5
|
%
|
10
|
%
|
|
|
Currency
|
1
|
|
—
|
|
|
|
Volume
|
14
|
|
7
|
|
|
|
Portfolio & other
|
—
|
|
—
|
|
|
|
Total
|
20
|
%
|
17
|
%
|
|
1.
|
As reported net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Packaging & Specialty Plastics
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
1
|
%
|
8
|
%
|
(8
|
)%
|
Currency
|
1
|
|
1
|
|
—
|
|
Volume
|
5
|
|
5
|
|
9
|
|
Portfolio & other
|
5
|
|
3
|
|
(1
|
)
|
Total
|
12
|
%
|
17
|
%
|
—
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
1
|
%
|
8
|
%
|
|
|
Currency
|
2
|
|
—
|
|
|
|
Volume
|
5
|
|
5
|
|
|
|
Portfolio & other
|
—
|
|
—
|
|
|
|
Total
|
8
|
%
|
13
|
%
|
|
1.
|
As reported net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
Electronics & Imaging
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
4,720
|
|
$
|
3,356
|
|
$
|
2,307
|
|
Pro forma net sales
|
|
$
|
4,775
|
|
$
|
4,266
|
|
||
Operating EBITDA
1
|
$
|
1,902
|
|
$
|
1,840
|
|
$
|
1,388
|
|
Equity earnings
|
$
|
412
|
|
$
|
356
|
|
$
|
234
|
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Electronics & Imaging
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
—
|
%
|
(1
|
)%
|
(3
|
)%
|
Currency
|
—
|
|
—
|
|
—
|
|
Volume
|
2
|
|
9
|
|
3
|
|
Portfolio & other
|
39
|
|
37
|
|
16
|
|
Total
|
41
|
%
|
45
|
%
|
16
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
(1
|
)%
|
(1
|
)%
|
|
|
Currency
|
1
|
|
—
|
|
|
|
Volume
|
1
|
|
11
|
|
|
|
Portfolio & other
|
(2
|
)
|
2
|
|
|
|
Total
|
(1
|
)%
|
12
|
%
|
|
1.
|
Net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
Nutrition & Biosciences
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
6,801
|
|
$
|
2,786
|
|
$
|
948
|
|
Pro forma net sales
|
|
$
|
5,952
|
|
$
|
5,736
|
|
||
Operating EBITDA
1
|
$
|
1,632
|
|
$
|
1,296
|
|
$
|
1,227
|
|
Equity earnings
|
$
|
16
|
|
$
|
13
|
|
$
|
10
|
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
1.
|
Net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Transportation & Advanced Polymers
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
6
|
%
|
—
|
%
|
(1
|
)%
|
Currency
|
—
|
|
—
|
|
(1
|
)
|
Volume
|
(2
|
)
|
6
|
|
7
|
|
Portfolio & other
|
119
|
|
175
|
|
49
|
|
Total
|
123
|
%
|
181
|
%
|
54
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
6
|
%
|
2
|
%
|
|
|
Currency
|
2
|
|
—
|
|
|
|
Volume
|
2
|
|
7
|
|
|
|
Portfolio & other
|
—
|
|
5
|
|
|
|
Total
|
10
|
%
|
14
|
%
|
|
1.
|
Net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
Safety & Construction
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
5,453
|
|
$
|
3,006
|
|
$
|
1,877
|
|
Pro forma net sales
|
|
$
|
5,142
|
|
$
|
4,984
|
|
||
Operating EBITDA
1
|
$
|
1,427
|
|
$
|
1,194
|
|
$
|
1,133
|
|
Equity earnings
|
$
|
24
|
|
$
|
2
|
|
$
|
1
|
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Safety & Construction
|
|
|
|
|||
Percentage change from prior year
|
2018
|
2017
|
2016
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
2
|
%
|
—
|
%
|
(1
|
)%
|
Currency
|
—
|
|
—
|
|
—
|
|
Volume
|
3
|
|
3
|
|
(2
|
)
|
Portfolio & other
|
76
|
|
57
|
|
—
|
|
Total
|
81
|
%
|
60
|
%
|
(3
|
)%
|
Change in Pro Forma Net Sales from Prior Period due to:
1
|
|
|
|
|||
Local price & product mix
|
1
|
%
|
(1
|
)%
|
|
|
Currency
|
1
|
|
—
|
|
|
|
Volume
|
4
|
|
4
|
|
|
|
Portfolio & other
|
—
|
|
—
|
|
|
|
Total
|
6
|
%
|
3
|
%
|
|
1.
|
Net sales in 2018 compared with pro forma net sales in 2017. Pro forma net sales in 2017 compared with pro forma net sales in 2016.
|
Corporate
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
295
|
|
$
|
387
|
|
$
|
281
|
|
Pro forma net sales
|
|
$
|
393
|
|
$
|
294
|
|
||
Operating EBITDA
1
|
$
|
(714
|
)
|
$
|
(848
|
)
|
$
|
(818
|
)
|
Equity losses
|
$
|
(26
|
)
|
$
|
(11
|
)
|
$
|
(28
|
)
|
1.
|
The Company’s measure of profit/loss for segment reporting purposes is Operating EBITDA for the twelve months ended December 31, 2018 and pro forma Operating EBITDA for the twelve months ended December 31, 2017 and 2016.
|
Net Sales by Division
|
2018
|
2017
1
|
2016
1
|
||||||
In millions
|
|||||||||
Agriculture
|
$
|
14,301
|
|
$
|
14,342
|
|
$
|
14,060
|
|
Performance Materials & Coatings
|
9,575
|
|
8,768
|
|
6,389
|
|
|||
Industrial Intermediates & Infrastructure
|
15,116
|
|
12,640
|
|
10,820
|
|
|||
Packaging & Specialty Plastics
|
24,096
|
|
22,392
|
|
19,848
|
|
|||
Materials Science
|
$
|
48,787
|
|
$
|
43,800
|
|
$
|
37,057
|
|
Electronics & Imaging
|
4,720
|
|
4,775
|
|
4,266
|
|
|||
Nutrition & Biosciences
|
6,801
|
|
5,952
|
|
5,736
|
|
|||
Transportation & Advanced Polymers
|
5,620
|
|
5,131
|
|
4,497
|
|
|||
Safety & Construction
|
5,453
|
|
5,142
|
|
4,984
|
|
|||
Specialty Products
|
$
|
22,594
|
|
$
|
21,000
|
|
$
|
19,483
|
|
Net Sales Variance by Division
1
|
2018
|
2017
|
||||||||||||||||||
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
|
3
|
%
|
—
|
%
|
(2
|
)%
|
(1
|
)%
|
—
|
%
|
—
|
%
|
—
|
%
|
1
|
%
|
1
|
%
|
2
|
%
|
Materials Science
|
4
|
%
|
1
|
%
|
6
|
%
|
—
|
%
|
11
|
%
|
8
|
%
|
—
|
%
|
5
|
%
|
5
|
%
|
18
|
%
|
Specialty Products
|
2
|
%
|
1
|
%
|
3
|
%
|
2
|
%
|
8
|
%
|
—
|
%
|
—
|
%
|
6
|
%
|
2
|
%
|
8
|
%
|
Operating EBITDA by Division
|
2018
|
2017
1
|
2016
1
|
||||||
In millions
|
|||||||||
Agriculture
|
$
|
2,705
|
|
$
|
2,611
|
|
$
|
2,322
|
|
Performance Materials & Coatings
|
2,170
|
|
1,774
|
|
1,015
|
|
|||
Industrial Intermediates & Infrastructure
|
2,543
|
|
2,282
|
|
1,675
|
|
|||
Packaging & Specialty Plastics
|
4,926
|
|
4,698
|
|
5,129
|
|
|||
Materials Science
|
$
|
9,639
|
|
$
|
8,754
|
|
$
|
7,819
|
|
Electronics & Imaging
|
1,902
|
|
1,840
|
|
1,388
|
|
|||
Nutrition & Biosciences
|
1,632
|
|
1,296
|
|
1,227
|
|
|||
Transportation & Advanced Polymers
|
1,702
|
|
1,319
|
|
1,043
|
|
|||
Safety & Construction
|
1,427
|
|
1,194
|
|
1,133
|
|
|||
Specialty Products
|
$
|
6,663
|
|
$
|
5,649
|
|
$
|
4,791
|
|
1.
|
Information for 2017 and 2016 was prepared on a pro forma basis.
|
2.
|
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, 2016 through August 31, 2017. Sales from September 1, 2017 through November 30, 2017, are included in Portfolio & Other. 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, 2016 through August 31, 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 on June 30, 2017), the authentication business (divested on January 6, 2017), and the divestiture of the global food safety diagnostic business (divested on February 28, 2017), all impacting Specialty Products. In 2017, Portfolio & Other also reflects sales from January 1, 2017 through May 31, 2017, related to the ownership restructure of Dow Silicones on June 1, 2016, impacting both Materials Science and Specialty Products.
|
Cash Flow Summary
|
|
|
|
||||||
In millions
|
2018
|
2017
1
|
2016
1
|
||||||
Cash provided by (used for):
|
|
|
|
||||||
Operating activities
|
$
|
4,731
|
|
$
|
(765
|
)
|
$
|
(2,957
|
)
|
Investing activities
|
(2,462
|
)
|
14,325
|
|
5,092
|
|
|||
Financing activities
|
(1,918
|
)
|
(6,554
|
)
|
(4,014
|
)
|
|||
Effect of exchange rate changes on cash
|
(344
|
)
|
297
|
|
(77
|
)
|
|||
Cash reclassified as held for sale
|
—
|
|
88
|
|
—
|
|
|||
Summary
|
|
|
|
||||||
Increase (Decrease) in cash, cash equivalents and restricted cash
|
7
|
|
7,391
|
|
(1,956
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
14,015
|
|
6,624
|
|
8,580
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
14,022
|
|
$
|
14,015
|
|
$
|
6,624
|
|
Less: Restricted cash and cash equivalents, included in "Other current assets"
|
540
|
|
577
|
|
17
|
|
|||
Cash and cash equivalents at end of year
|
$
|
13,482
|
|
$
|
13,438
|
|
$
|
6,607
|
|
Cash Flows from Operating Activities Excluding the Impact of ASU 2016-15 and Additional Interpretive Guidance (non-GAAP)
|
2018
|
2017
|
2016
|
|||||||
In millions
|
||||||||||
Cash flows from operating activities - Updated for impact of ASU 2016-15 and additional interpretive guidance (GAAP)
|
$
|
4,731
|
|
$
|
(765
|
)
|
$
|
(2,957
|
)
|
|
Less: Impact of ASU 2016-15 and additional interpretive guidance
|
(657
|
)
|
(9,462
|
)
|
(8,551
|
)
|
||||
Cash flows from operating activities - Excluding impact of ASU 2016-15 and additional interpretive guidance (non-GAAP)
|
$
|
5,388
|
|
$
|
8,697
|
|
$
|
5,594
|
|
Reconciliation of "Cash Provided by (Used for) Operating Activities" to Free Cash Flow
|
|
|
|
||||||
In millions
|
2018
|
2017
1
|
2016
1
|
||||||
Cash provided by (used for) operating activities
|
$
|
4,731
|
|
$
|
(765
|
)
|
$
|
(2,957
|
)
|
Capital expenditures
|
(3,837
|
)
|
(3,570
|
)
|
(3,804
|
)
|
|||
Free Cash Flow
|
$
|
894
|
|
$
|
(4,335
|
)
|
$
|
(6,761
|
)
|
1.
|
"Cash from operating activities" was updated for ASU 2016-15 (including SEC interpretive guidance) 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
|
Stable
|
Credit Ratings
|
Long-Term Rating
|
Short-Term Rating
|
Outlook
|
Standard & Poor’s
|
A-
|
A-2
|
Stable
|
Moody’s Investors Service
|
A3
|
P-2
|
Stable
|
Fitch Ratings
|
A
|
F1
|
Stable
|
Total Debt
|
Dec 31, 2018
|
Dec 31, 2017
|
|||||||||||||||||||
In millions
|
DowDuPont
1
|
Historical Dow
|
Historical DuPont
|
Total
|
Historical Dow
|
Historical DuPont
|
Total
|
||||||||||||||
Notes payable
|
$
|
—
|
|
$
|
302
|
|
$
|
1,863
|
|
$
|
2,165
|
|
$
|
484
|
|
$
|
1,464
|
|
$
|
1,948
|
|
Long-term debt due within one year
|
—
|
|
340
|
|
297
|
|
637
|
|
752
|
|
1,315
|
|
2,067
|
|
|||||||
Long-term debt
|
12,596
|
|
19,254
|
|
5,812
|
|
37,662
|
|
19,765
|
|
10,291
|
|
30,056
|
|
|||||||
Total debt
|
$
|
12,596
|
|
$
|
19,896
|
|
$
|
7,972
|
|
$
|
40,464
|
|
$
|
21,001
|
|
$
|
13,070
|
|
$
|
34,071
|
|
1.
|
Represents the DowDuPont holding company.
|
Dividends Paid for the Years Ended Dec 31
|
|
|
|
||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
||||||
Dividends paid, per common share
1
|
$
|
1.52
|
|
$
|
2.22
|
|
$
|
1.84
|
|
Dividends paid to common stockholders
2
|
$
|
3,491
|
|
$
|
3,394
|
|
$
|
2,037
|
|
Dividends paid to preferred shareholders
3
|
$
|
—
|
|
$
|
—
|
|
$
|
425
|
|
1.
|
The 2017 dividend is comprised of $0.38 per share of DowDuPont dividends declared and paid in the fourth quarter of 2017 and the remaining amount relates to payments of Historical Dow dividends declared prior to the Merger.
|
2.
|
The 2017 dividend consists of $885 million paid to DowDuPont common stockholders for dividends declared after the Merger, as well as $2,179 million paid to Historical Dow common stockholders for dividends declared prior to the Merger, and $330 million paid to Historical DuPont common stockholders after the Merger for dividends declared prior to the Merger.
|
Contractual Obligations at Dec 31, 2018
|
Payments Due In
|
||||||||||||||
In millions
|
2019
|
2020-2021
|
2022-2023
|
2024 & Beyond
|
Total
|
||||||||||
Long-term debt obligations
1
|
$
|
635
|
|
$
|
15,068
|
|
$
|
5,199
|
|
$
|
17,759
|
|
$
|
38,661
|
|
Expected cash requirements for interest
2
|
1,702
|
|
2,992
|
|
2,233
|
|
12,028
|
|
18,955
|
|
|||||
Pension and other postretirement benefits
|
799
|
|
1,569
|
|
4,238
|
|
9,804
|
|
16,410
|
|
|||||
Operating leases
|
654
|
|
915
|
|
660
|
|
1,063
|
|
3,292
|
|
|||||
Purchase obligations
3
|
3,870
|
|
5,542
|
|
4,205
|
|
6,521
|
|
20,138
|
|
|||||
Other noncurrent obligations
4
|
460
|
|
1,435
|
|
989
|
|
2,010
|
|
4,894
|
|
|||||
Total contractual obligations
|
$
|
8,120
|
|
$
|
27,521
|
|
$
|
17,524
|
|
$
|
49,185
|
|
$
|
102,350
|
|
1.
|
Excludes unamortized debt discount and issuance costs of
$440 million
and unamortized debt step-up premium of
$78 million
. Includes capital lease obligations of
$486 million
. Assumes the option to extend the Dow Silicones Term Loan facility will be exercised.
|
2.
|
Cash requirements for interest on long-term debt was calculated using current interest rates at
December 31, 2018
and includes
$5,200 million
of various floating rate notes.
|
3.
|
Includes take-or-pay and throughput obligations, outstanding purchase orders and other commitments greater than $1 million obtained through a survey conducted by the Subsidiaries.
|
4.
|
Includes liabilities related to asbestos litigation, environmental remediation, legal settlements and other noncurrent liabilities. The table also includes future payments under Historical DuPont Pioneer license agreements of
$911 million
on an undiscounted basis (
$806 million
on a discounted basis). The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities and deferred tax liabilities as it is impractical to determine whether there will be a cash impact related to these liabilities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
|
•
|
Conserve - aggressively pursue energy efficiency and conservation
|
•
|
Optimize - increase and diversify energy resources
|
•
|
Accelerate - develop cost-effective, clean, renewable and alternative energy sources
|
•
|
Transition - to a sustainable energy future
|
1.
|
Includes Historical DuPont costs for the period September 1, 2017 through December 31, 2017.
|
1.
|
Remediation obligations assumed upon completion of the Merger.
|
2.
|
Represents the net change in indemnified remediation obligations based on activity as well as the removal from Historical DuPont's accrued remediation liabilities of obligations have been fully transferred to Chemours. Pursuant to the Chemours Separation Agreement, as discussed below and in Note
16
to the Consolidated Financial Statements, Historical DuPont is indemnified by Chemours for certain environmental matters.
|
Environmental Sites
1
|
Historical DuPont
|
Historical Dow
|
||||||||||||||
|
Sites
2
|
Superfund Sites
3, 4
|
Sites
5
|
Superfund Sites
3
|
||||||||||||
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
||||||||
Number of sites at Jan 1
|
99
|
|
—
|
|
62
|
|
—
|
|
244
|
|
189
|
|
131
|
|
131
|
|
Sites added during year
6
|
1
|
|
99
|
|
7
|
|
62
|
|
3
|
|
60
|
|
2
|
|
2
|
|
Sites closed during year
|
—
|
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
(5
|
)
|
(2
|
)
|
(2
|
)
|
Number of sites at Dec 31
|
100
|
|
99
|
|
69
|
|
62
|
|
238
|
|
244
|
|
131
|
|
131
|
|
1.
|
Active sites.
|
2.
|
Sites currently or formerly owned by Historical DuPont. Remediation obligations are imposed by the Resource Conservation and Recovery Act or similar state law in the United States and by similar federal, state, provincial or local law in non-U.S. locations. At
December 31, 2018
, Chemours is indemnifying Historical DuPont for activities at
31
of these sites. See discussion below and Note 16 to the Consolidated Financial Statements for additional information.
|
3.
|
Superfund sites are sites, including sites not owned by Historical DuPont or Historical Dow, where remediation obligations may be imposed on either company under federal or state Superfund laws or similar laws in non-U.S. locations. The total includes approximately 40 sites that have been counted twice as Historical DuPont and Historical Dow are separately named.
|
4.
|
At
December 31, 2018
, Chemours is indemnifying Historical DuPont for activities at
28
of these Superfund sites. See discussion below and Note 16 to the Consolidated Financial Statements for additional information.
|
5.
|
Sites currently or formerly owned by Historical Dow. Remediation obligations are imposed by the Resource Conservation and Recovery Act or similar state law in the United States and by similar federal, state, provincial or local law in non-U.S. locations. At
December 31, 2018
,
32
of these sites (
35
sites at
December 31, 2017
) were formerly owned by Dowell Schlumberger, Inc., a group of companies in which Historical Dow previously owned a 50 percent interest. Historical Dow sold its interest in Dowell Schlumberger in 1992.
|
6.
|
Includes Historical DuPont remediation obligations transferred as a result of the Merger in 2017.
|
Asbestos-Related Claim Activity
|
2018
|
2017
|
2016
|
|||
Claims unresolved at Jan 1
|
15,427
|
|
16,141
|
|
18,778
|
|
Claims filed
|
6,599
|
|
7,010
|
|
7,813
|
|
Claims settled, dismissed or otherwise resolved
|
(9,246
|
)
|
(7,724
|
)
|
(10,450
|
)
|
Claims unresolved at Dec 31
|
12,780
|
|
15,427
|
|
16,141
|
|
Claimants with claims against both Union Carbide and Amchem
|
(4,675
|
)
|
(5,530
|
)
|
(5,741
|
)
|
Individual claimants at Dec 31
|
8,105
|
|
9,897
|
|
10,400
|
|
Total Daily VAR by Exposure Type at Dec 31
|
2018
|
2017
|
||||||||||
In millions
|
Year-end
|
Average
|
Year-end
|
Average
|
||||||||
Commodities
|
$
|
26
|
|
$
|
30
|
|
$
|
32
|
|
$
|
35
|
|
Equity securities
|
12
|
|
7
|
|
4
|
|
9
|
|
||||
Foreign exchange
|
26
|
|
28
|
|
26
|
|
38
|
|
||||
Interest rate
|
81
|
|
80
|
|
70
|
|
76
|
|
||||
Composite
|
$
|
145
|
|
$
|
145
|
|
$
|
132
|
|
$
|
158
|
|
Foreign Currency Contracts at Dec 31, 2018
|
Fair Value
Asset
|
Fair Value
Sensitivity
|
||||
In millions
|
||||||
Foreign currency contracts
|
$
|
51
|
|
$
|
(402
|
)
|
/s/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 11, 2019
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
PricewaterhouseCoopers LLP
|
Philadelphia, Pennsylvania
|
February 11, 2019
|
(In millions, except per share amounts) For the years ended Dec 31,
|
2018
|
2017
|
2016
|
||||||
Net sales
|
$
|
85,977
|
|
$
|
62,484
|
|
$
|
48,158
|
|
Cost of sales
|
65,333
|
|
49,791
|
|
37,668
|
|
|||
Research and development expenses
|
3,060
|
|
2,141
|
|
1,593
|
|
|||
Selling, general and administrative expenses
|
6,709
|
|
4,064
|
|
2,953
|
|
|||
Amortization of intangibles
|
1,903
|
|
1,013
|
|
544
|
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
1,105
|
|
3,280
|
|
595
|
|
|||
Integration and separation costs
|
2,463
|
|
1,101
|
|
349
|
|
|||
Asbestos-related charge
|
—
|
|
—
|
|
1,113
|
|
|||
Equity in earnings of nonconsolidated affiliates
|
1,001
|
|
764
|
|
442
|
|
|||
Sundry income (expense) - net
|
592
|
|
417
|
|
1,486
|
|
|||
Interest expense and amortization of debt discount
|
1,504
|
|
1,082
|
|
858
|
|
|||
Income from continuing operations before income taxes
|
5,493
|
|
1,193
|
|
4,413
|
|
|||
Provision (Credit) for income taxes on continuing operations
|
1,489
|
|
(476
|
)
|
9
|
|
|||
Income from continuing operations, net of tax
|
4,004
|
|
1,669
|
|
4,404
|
|
|||
Loss from discontinued operations, net of tax
|
(5
|
)
|
(77
|
)
|
—
|
|
|||
Net income
|
3,999
|
|
1,592
|
|
4,404
|
|
|||
Net income attributable to noncontrolling interests
|
155
|
|
132
|
|
86
|
|
|||
Net income attributable to DowDuPont Inc.
|
3,844
|
|
1,460
|
|
4,318
|
|
|||
Preferred stock dividends
|
—
|
|
—
|
|
340
|
|
|||
Net income available for DowDuPont Inc. common stockholders
|
$
|
3,844
|
|
$
|
1,460
|
|
$
|
3,978
|
|
|
|
|
|
||||||
|
|
|
|
||||||
Per common share data:
|
|
|
|
||||||
Earnings per common share from continuing operations - basic
|
$
|
1.66
|
|
$
|
0.97
|
|
$
|
3.57
|
|
Loss per common share from discontinued operations - basic
|
—
|
|
(0.05
|
)
|
—
|
|
|||
Earnings per common share - basic
|
$
|
1.66
|
|
$
|
0.92
|
|
$
|
3.57
|
|
Earnings per common share from continuing operations - diluted
|
$
|
1.65
|
|
$
|
0.95
|
|
$
|
3.52
|
|
Loss per common share from discontinued operations - diluted
|
—
|
|
(0.04
|
)
|
—
|
|
|||
Earnings per common share - diluted
|
$
|
1.65
|
|
$
|
0.91
|
|
$
|
3.52
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding - basic
|
2,301.0
|
|
1,579.8
|
|
1,108.1
|
|
|||
Weighted-average common shares outstanding - diluted
|
2,315.5
|
|
1,598.1
|
|
1,123.2
|
|
(In millions) For the years ended Dec 31,
|
2018
|
2017
|
2016
|
||||||
Net income
|
$
|
3,999
|
|
$
|
1,592
|
|
$
|
4,404
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||||
Unrealized losses on investments
|
(67
|
)
|
(46
|
)
|
(4
|
)
|
|||
Cumulative translation adjustments
|
(1,743
|
)
|
446
|
|
(644
|
)
|
|||
Pension and other postretirement benefit plans
|
(626
|
)
|
466
|
|
(620
|
)
|
|||
Derivative instruments
|
51
|
|
(16
|
)
|
113
|
|
|||
Total other comprehensive income (loss)
|
(2,385
|
)
|
850
|
|
(1,155
|
)
|
|||
Comprehensive income
|
1,614
|
|
2,442
|
|
3,249
|
|
|||
Comprehensive income attributable to noncontrolling interests, net of tax
|
118
|
|
174
|
|
83
|
|
|||
Comprehensive income attributable to DowDuPont Inc.
|
$
|
1,496
|
|
$
|
2,268
|
|
$
|
3,166
|
|
(In millions, except share amounts) At Dec 31,
|
2018
|
2017
|
||||
Assets
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents (variable interest entities restricted - 2018: $82; 2017: $107)
|
$
|
13,482
|
|
$
|
13,438
|
|
Marketable securities
|
134
|
|
956
|
|
||
Accounts and notes receivable:
|
|
|
||||
Trade (net of allowance for doubtful receivables - 2018: $191; 2017: $127)
|
12,376
|
|
11,314
|
|
||
Other
|
4,963
|
|
5,579
|
|
||
Inventories
|
16,621
|
|
16,992
|
|
||
Other current assets
|
2,027
|
|
1,614
|
|
||
Total current assets
|
49,603
|
|
49,893
|
|
||
Investments
|
|
|
||||
Investment in nonconsolidated affiliates
|
5,204
|
|
5,336
|
|
||
Other investments (investments carried at fair value - 2018: $1,699; 2017: $1,512)
|
2,701
|
|
2,564
|
|
||
Noncurrent receivables
|
477
|
|
680
|
|
||
Total investments
|
8,382
|
|
8,580
|
|
||
Property
|
|
|
||||
Property
|
75,343
|
|
73,304
|
|
||
Less accumulated depreciation
|
39,495
|
|
37,057
|
|
||
Net property (variable interest entities restricted - 2018: $734; 2017: $907)
|
35,848
|
|
36,247
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
59,032
|
|
59,527
|
|
||
Other intangible assets (net of accumulated amortization - 2018: $7,414; 2017: $5,550)
|
30,965
|
|
33,274
|
|
||
Deferred income tax assets
|
1,724
|
|
1,869
|
|
||
Deferred charges and other assets
|
2,476
|
|
2,774
|
|
||
Total other assets
|
94,197
|
|
97,444
|
|
||
Total Assets
|
$
|
188,030
|
|
$
|
192,164
|
|
Liabilities and Equity
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable
|
$
|
2,165
|
|
$
|
1,948
|
|
Long-term debt due within one year
|
637
|
|
2,067
|
|
||
Accounts payable:
|
|
|
||||
Trade
|
9,457
|
|
9,134
|
|
||
Other
|
3,656
|
|
3,727
|
|
||
Income taxes payable
|
857
|
|
843
|
|
||
Accrued and other current liabilities
|
7,943
|
|
8,409
|
|
||
Total current liabilities
|
24,715
|
|
26,128
|
|
||
Long-Term Debt (variable interest entities nonrecourse - 2018: $75; 2017: $249)
|
37,662
|
|
30,056
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
5,435
|
|
6,266
|
|
||
Pension and other postretirement benefits - noncurrent
|
15,909
|
|
18,581
|
|
||
Asbestos-related liabilities - noncurrent
|
1,142
|
|
1,237
|
|
||
Other noncurrent obligations
|
6,988
|
|
7,969
|
|
||
Total other noncurrent liabilities
|
29,474
|
|
34,053
|
|
||
Stockholders' Equity
|
|
|
||||
Common stock (authorized 5,000,000,000 shares of $0.01 par value each;
issued 2018: 2,352,430,301 shares; 2017: 2,341,455,518 shares) |
24
|
|
23
|
|
||
Additional paid-in capital
|
81,960
|
|
81,257
|
|
||
Retained earnings
|
30,536
|
|
29,211
|
|
||
Accumulated other comprehensive loss
|
(12,394
|
)
|
(8,972
|
)
|
||
Unearned ESOP shares
|
(134
|
)
|
(189
|
)
|
||
Treasury stock at cost (2018: 83,452,554 shares; 2017: 14,123,049 shares)
|
(5,421
|
)
|
(1,000
|
)
|
||
DowDuPont's stockholders' equity
|
94,571
|
|
100,330
|
|
||
Noncontrolling interests
|
1,608
|
|
1,597
|
|
||
Total equity
|
96,179
|
|
101,927
|
|
||
Total Liabilities and Equity
|
$
|
188,030
|
|
$
|
192,164
|
|
(In millions) For the years ended Dec 31,
|
2018
|
2017
|
2016
|
||||||
Operating Activities
|
|
|
|
||||||
Net income
|
$
|
3,999
|
|
$
|
1,592
|
|
$
|
4,404
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
5,918
|
|
3,969
|
|
2,862
|
|
|||
Credit for deferred income tax
|
(434
|
)
|
(2,083
|
)
|
(1,259
|
)
|
|||
Earnings of nonconsolidated affiliates less than dividends received
|
83
|
|
128
|
|
243
|
|
|||
Net periodic pension benefit cost
|
58
|
|
1,026
|
|
389
|
|
|||
Pension contributions
|
(2,964
|
)
|
(1,744
|
)
|
(629
|
)
|
|||
Net gain on sales of assets, businesses and investments
|
(93
|
)
|
(1,172
|
)
|
(214
|
)
|
|||
Net (gain) loss on step acquisition of nonconsolidated affiliate
|
47
|
|
—
|
|
(2,445
|
)
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
1,105
|
|
3,280
|
|
595
|
|
|||
Amortization of Merger-related inventory step-up
|
1,628
|
|
1,573
|
|
—
|
|
|||
Asbestos-related charge
|
—
|
|
—
|
|
1,113
|
|
|||
Other net loss
|
673
|
|
470
|
|
361
|
|
|||
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
|
||||||
Accounts and notes receivable
|
(1,611
|
)
|
(9,782
|
)
|
(8,833
|
)
|
|||
Inventories
|
(1,490
|
)
|
(2,218
|
)
|
610
|
|
|||
Accounts payable
|
201
|
|
2,631
|
|
569
|
|
|||
Other assets and liabilities, net
|
(2,389
|
)
|
1,565
|
|
(723
|
)
|
|||
Cash provided by (used for) operating activities
|
4,731
|
|
(765
|
)
|
(2,957
|
)
|
|||
Investing Activities
|
|
|
|
||||||
Capital expenditures
|
(3,837
|
)
|
(3,570
|
)
|
(3,804
|
)
|
|||
Investment in gas field developments
|
(114
|
)
|
(121
|
)
|
(113
|
)
|
|||
Purchases of previously leased assets
|
(26
|
)
|
(187
|
)
|
—
|
|
|||
Proceeds from sales of property and businesses, net of cash divested
|
202
|
|
2,959
|
|
284
|
|
|||
Acquisitions of property and businesses, net of cash acquired
|
(20
|
)
|
50
|
|
(187
|
)
|
|||
Cash acquired in Merger transaction
|
—
|
|
4,005
|
|
—
|
|
|||
Cash acquired in step acquisition of nonconsolidated affiliate
|
—
|
|
—
|
|
1,070
|
|
|||
Investments in and loans to nonconsolidated affiliates
|
(26
|
)
|
(754
|
)
|
(1,020
|
)
|
|||
Distributions and loan repayments from nonconsolidated affiliates
|
55
|
|
106
|
|
109
|
|
|||
Proceeds from sales of ownership interests in nonconsolidated affiliates
|
4
|
|
64
|
|
22
|
|
|||
Purchases of investments
|
(2,787
|
)
|
(1,690
|
)
|
(577
|
)
|
|||
Proceeds from sales and maturities of investments
|
3,402
|
|
4,101
|
|
733
|
|
|||
Proceeds from interests in trade accounts receivable conduits
|
657
|
|
9,462
|
|
8,551
|
|
|||
Other investing activities, net
|
28
|
|
(100
|
)
|
24
|
|
|||
Cash provided by (used for) investing activities
|
(2,462
|
)
|
14,325
|
|
5,092
|
|
|||
Financing Activities
|
|
|
|
||||||
Changes in short-term notes payable
|
223
|
|
(2,248
|
)
|
(33
|
)
|
|||
Proceeds from issuance of long-term debt
|
15,455
|
|
499
|
|
32
|
|
|||
Payments on long-term debt
|
(9,009
|
)
|
(663
|
)
|
(588
|
)
|
|||
Purchases of treasury stock
|
(4,421
|
)
|
(1,000
|
)
|
(916
|
)
|
|||
Proceeds from issuance of company stock
|
197
|
|
66
|
|
—
|
|
|||
Proceeds from sales of common stock
|
—
|
|
453
|
|
398
|
|
|||
Transaction financing, debt issuance and other costs
|
(555
|
)
|
—
|
|
—
|
|
|||
Employee taxes paid for share-based payment arrangements
|
(128
|
)
|
(99
|
)
|
(65
|
)
|
|||
Distributions to noncontrolling interests
|
(195
|
)
|
(136
|
)
|
(176
|
)
|
|||
Purchases of noncontrolling interests
|
—
|
|
—
|
|
(202
|
)
|
|||
Dividends paid to stockholders
|
(3,491
|
)
|
(3,394
|
)
|
(2,462
|
)
|
|||
Other financing activities, net
|
6
|
|
(32
|
)
|
(2
|
)
|
|||
Cash used for financing activities
|
(1,918
|
)
|
(6,554
|
)
|
(4,014
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(344
|
)
|
297
|
|
(77
|
)
|
|||
Cash reclassified as held for sale
|
—
|
|
88
|
|
—
|
|
|||
Summary
|
|
|
|
||||||
Increase (Decrease) in cash, cash equivalents and restricted cash
|
7
|
|
7,391
|
|
(1,956
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
14,015
|
|
6,624
|
|
8,580
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
14,022
|
|
$
|
14,015
|
|
$
|
6,624
|
|
Less: Restricted cash and cash equivalents, included in "Other current assets"
|
540
|
|
577
|
|
17
|
|
|||
Cash and cash equivalents at end of year
|
$
|
13,482
|
|
$
|
13,438
|
|
$
|
6,607
|
|
Supplemental cash flow information
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
2,116
|
|
$
|
1,254
|
|
$
|
1,192
|
|
Income taxes
|
$
|
2,199
|
|
$
|
1,368
|
|
$
|
1,592
|
|
(In millions, except per share amounts)
|
Preferred Stock
|
Common Stock
|
Add'l Paid in Capital
|
Retained Earnings
|
Accum Other Comp Loss
|
Unearned ESOP
|
Treasury Stock
|
Non-controlling Interests
|
Total Equity
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance at Jan 1, 2016
|
$
|
4,000
|
|
$
|
3,107
|
|
$
|
4,936
|
|
$
|
28,425
|
|
$
|
(8,667
|
)
|
$
|
(272
|
)
|
$
|
(6,155
|
)
|
$
|
809
|
|
$
|
26,183
|
|
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
3,978
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,978
|
|
|||||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,155
|
)
|
—
|
|
—
|
|
—
|
|
(1,155
|
)
|
|||||||||
Dividends ($1.84 per common share)
|
—
|
|
—
|
|
—
|
|
(2,037
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,037
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
—
|
|
398
|
|
—
|
|
—
|
|
—
|
|
717
|
|
—
|
|
1,115
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
(376
|
)
|
—
|
|
—
|
|
51
|
|
—
|
|
—
|
|
(325
|
)
|
|||||||||
ESOP shares acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
(18
|
)
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
433
|
|
433
|
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(916
|
)
|
—
|
|
(916
|
)
|
|||||||||
Preferred stock converted to common stock
|
(4,000
|
)
|
—
|
|
(695
|
)
|
—
|
|
—
|
|
—
|
|
4,695
|
|
—
|
|
—
|
|
|||||||||
Other
|
—
|
|
—
|
|
(1
|
)
|
(28
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(29
|
)
|
|||||||||
Balance at Dec 31, 2016
|
$
|
—
|
|
$
|
3,107
|
|
$
|
4,262
|
|
$
|
30,338
|
|
$
|
(9,822
|
)
|
$
|
(239
|
)
|
$
|
(1,659
|
)
|
$
|
1,242
|
|
$
|
27,229
|
|
2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
1,460
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,460
|
|
|||||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
850
|
|
—
|
|
—
|
|
—
|
|
850
|
|
|||||||||
Dividends ($1.76 per common share)
|
—
|
|
—
|
|
—
|
|
(2,558
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,558
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
—
|
|
519
|
|
—
|
|
—
|
|
—
|
|
724
|
|
—
|
|
1,243
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
(332
|
)
|
—
|
|
—
|
|
50
|
|
—
|
|
—
|
|
(282
|
)
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
355
|
|
355
|
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,000
|
)
|
—
|
|
(1,000
|
)
|
|||||||||
Merger impact
|
—
|
|
(3,084
|
)
|
76,829
|
|
—
|
|
—
|
|
—
|
|
935
|
|
—
|
|
74,680
|
|
|||||||||
Other
|
—
|
|
—
|
|
(21
|
)
|
(29
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(50
|
)
|
|||||||||
Balance at Dec 31, 2017
|
$
|
—
|
|
$
|
23
|
|
$
|
81,257
|
|
$
|
29,211
|
|
$
|
(8,972
|
)
|
$
|
(189
|
)
|
$
|
(1,000
|
)
|
$
|
1,597
|
|
$
|
101,927
|
|
2018
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Adoption of accounting standards (Note 1)
|
—
|
|
—
|
|
—
|
|
996
|
|
(1,037
|
)
|
—
|
|
—
|
|
—
|
|
(41
|
)
|
|||||||||
Net income available for DowDuPont Inc. common stockholders
|
—
|
|
—
|
|
—
|
|
3,844
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,844
|
|
|||||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,385
|
)
|
—
|
|
—
|
|
—
|
|
(2,385
|
)
|
|||||||||
Dividends ($1.52 per common share)
|
—
|
|
—
|
|
—
|
|
(3,491
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,491
|
)
|
|||||||||
Common stock issued/sold
|
—
|
|
1
|
|
197
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
198
|
|
|||||||||
Stock-based compensation and allocation of ESOP shares
|
—
|
|
—
|
|
506
|
|
—
|
|
—
|
|
55
|
|
—
|
|
—
|
|
561
|
|
|||||||||
Impact of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
11
|
|
|||||||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,421
|
)
|
—
|
|
(4,421
|
)
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
(24
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(24
|
)
|
|||||||||
Balance at Dec 31, 2018
|
$
|
—
|
|
$
|
24
|
|
$
|
81,960
|
|
$
|
30,536
|
|
$
|
(12,394
|
)
|
$
|
(134
|
)
|
$
|
(5,421
|
)
|
$
|
1,608
|
|
$
|
96,179
|
|
Note
|
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
||
22
|
||
23
|
||
24
|
||
25
|
||
26
|
Summary of Changes to the Consolidated Statements of Income
|
2017
|
2016
|
||||||||||
In millions
|
As Filed
|
Updated
1
|
As Filed
|
Updated
1
|
||||||||
Cost of sales
|
$
|
50,414
|
|
$
|
49,791
|
|
$
|
37,640
|
|
$
|
37,668
|
|
Research and development expenses
|
$
|
2,110
|
|
$
|
2,141
|
|
$
|
1,584
|
|
$
|
1,593
|
|
Selling, general and administrative expenses
|
$
|
4,021
|
|
$
|
4,064
|
|
$
|
2,956
|
|
$
|
2,953
|
|
Sundry income (expense) - net
|
$
|
966
|
|
$
|
417
|
|
$
|
1,452
|
|
$
|
1,486
|
|
Summary of Changes to the Consolidated Statements of Cash Flows
|
2017
|
2016
|
||||||||||
In millions
|
As Filed
|
Updated
1
|
As Filed
|
Updated
1
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Accounts and notes receivable
|
$
|
(2,589
|
)
|
$
|
(9,782
|
)
|
$
|
(1,539
|
)
|
$
|
(8,833
|
)
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
2,269
|
|
$
|
—
|
|
$
|
1,257
|
|
$
|
—
|
|
Other assets and liabilities, net
|
$
|
1,563
|
|
$
|
1,565
|
|
$
|
(717
|
)
|
$
|
(723
|
)
|
Cash provided by (used for) operating activities
|
$
|
8,695
|
|
$
|
(765
|
)
|
$
|
5,600
|
|
$
|
(2,957
|
)
|
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
|
)
|
Cash acquired in step acquisition of nonconsolidated affiliate
|
$
|
—
|
|
$
|
—
|
|
$
|
1,050
|
|
$
|
1,070
|
|
Proceeds from interests in trade accounts receivable conduits
|
$
|
—
|
|
$
|
9,462
|
|
$
|
—
|
|
$
|
8,551
|
|
Cash provided by (used for) investing activities
|
$
|
4,274
|
|
$
|
14,325
|
|
$
|
(3,479
|
)
|
$
|
5,092
|
|
Financing Activities
|
|
|
|
|
||||||||
Other financing activities, net
|
$
|
(1
|
)
|
$
|
(32
|
)
|
$
|
(2
|
)
|
$
|
(2
|
)
|
Cash used for financing activities
|
$
|
(6,523
|
)
|
$
|
(6,554
|
)
|
$
|
(4,014
|
)
|
$
|
(4,014
|
)
|
Summary
|
|
|
|
|
||||||||
Increase (Decrease) in cash, cash equivalents and restricted cash
|
$
|
6,831
|
|
$
|
7,391
|
|
$
|
(1,970
|
)
|
$
|
(1,956
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
|
$
|
6,607
|
|
$
|
6,624
|
|
$
|
8,577
|
|
$
|
8,580
|
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
13,438
|
|
$
|
14,015
|
|
$
|
6,607
|
|
$
|
6,624
|
|
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, including additional guidance from the SEC's Office of the Chief Accountant issued in the third quarter of 2018.
|
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 Dec 31, 2018
|
Adjustments
|
Balance at Dec 31, 2018 Excluding Adoption of Topic 606
|
||||||
In millions
|
|||||||||
Assets
|
|
|
|
||||||
Accounts and notes receivable - Trade
|
$
|
12,376
|
|
$
|
(81
|
)
|
$
|
12,295
|
|
Accounts and notes receivable - Other
|
$
|
4,963
|
|
$
|
41
|
|
$
|
5,004
|
|
Inventories
|
$
|
16,621
|
|
$
|
38
|
|
$
|
16,659
|
|
Other current assets
|
$
|
2,027
|
|
$
|
(96
|
)
|
$
|
1,931
|
|
Total current assets
|
$
|
49,603
|
|
$
|
(98
|
)
|
$
|
49,505
|
|
Deferred income tax assets
|
$
|
1,724
|
|
$
|
(27
|
)
|
$
|
1,697
|
|
Deferred charges and other assets
|
$
|
2,476
|
|
$
|
(43
|
)
|
$
|
2,433
|
|
Total other assets
|
$
|
94,197
|
|
$
|
(70
|
)
|
$
|
94,127
|
|
Total Assets
|
$
|
188,030
|
|
$
|
(168
|
)
|
$
|
187,862
|
|
Liabilities
|
|
|
|
||||||
Accounts payable - Other
|
$
|
3,656
|
|
$
|
(10
|
)
|
$
|
3,646
|
|
Income taxes payable
|
$
|
857
|
|
$
|
2
|
|
$
|
859
|
|
Accrued and other current liabilities
|
$
|
7,943
|
|
$
|
(95
|
)
|
$
|
7,848
|
|
Total current liabilities
|
$
|
24,715
|
|
$
|
(103
|
)
|
$
|
24,612
|
|
Deferred income tax liabilities
|
$
|
5,435
|
|
$
|
(3
|
)
|
$
|
5,432
|
|
Other noncurrent obligations
|
$
|
6,988
|
|
$
|
(140
|
)
|
$
|
6,848
|
|
Total other noncurrent liabilities
|
$
|
29,474
|
|
$
|
(143
|
)
|
$
|
29,331
|
|
Stockholders' Equity
|
|
|
|
||||||
Retained earnings
|
$
|
30,536
|
|
$
|
78
|
|
$
|
30,614
|
|
DowDuPont's stockholders' equity
|
$
|
94,571
|
|
$
|
78
|
|
$
|
94,649
|
|
Total equity
|
$
|
96,179
|
|
$
|
78
|
|
$
|
96,257
|
|
Total Liabilities and Equity
|
$
|
188,030
|
|
$
|
(168
|
)
|
$
|
187,862
|
|
Merger Consideration
|
|||
In millions (except exchange ratio)
|
|
||
Historical DuPont Common Stock outstanding at Aug 31, 2017
|
868.3
|
|
|
Historical DuPont exchange ratio
|
1.2820
|
||
DowDuPont Common Stock issued in exchange for Historical 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 Historical DuPont equity awards
2
|
485
|
|
|
Total consideration
|
$
|
74,680
|
|
1.
|
Amount was determined based on the price per share of Historical Dow Common Stock of
$66.65
on August 31, 2017.
|
2.
|
Represents the fair value of replacement awards issued for Historical DuPont's equity awards outstanding immediately before the Merger and attributable to the service periods prior to the Merger. The previous Historical DuPont equity awards were converted into the right to receive
1.2820
shares of DowDuPont Common Stock.
|
Historical DuPont Assets Acquired and Liabilities Assumed on Aug 31, 2017
|
Final fair value
|
||
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
|
1,635
|
|
|
Inventories
|
8,805
|
|
|
Other current assets
|
420
|
|
|
Assets held for sale
|
3,732
|
|
|
Investment in nonconsolidated affiliates
|
1,596
|
|
|
Other investments
|
50
|
|
|
Noncurrent receivables
|
84
|
|
|
Property
|
11,684
|
|
|
Goodwill
|
45,497
|
|
|
Other intangible assets
|
27,071
|
|
|
Deferred income tax assets
|
279
|
|
|
Deferred charges and other assets
|
1,932
|
|
|
Total Assets
|
$
|
115,838
|
|
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
|
8,259
|
|
|
Pension and other postretirement benefits - noncurrent
|
8,056
|
|
|
Other noncurrent obligations
|
1,967
|
|
|
Total Liabilities
|
$
|
40,680
|
|
Noncontrolling interests
|
478
|
|
|
Net Assets (Consideration for the Merger)
|
$
|
74,680
|
|
Historical DuPont Results of Operations
|
Sep 1 -
|
||
In millions
|
Dec 31, 2017
|
||
Net sales
|
$
|
7,033
|
|
Loss from continuing operations before income taxes
|
$
|
(1,578
|
)
|
•
|
From January 1, 2016 through December 31, 2017, Historical Dow and Historical DuPont collectively incurred
$455 million
of after tax costs (
$553 million
pretax) to prepare for and close the Merger. These Merger costs were reflected within the results of operations in the pro forma results presented below as if they were incurred on January 1, 2016. The costs incurred related to integration and to prepare for the Intended Business Separations were reflected in the pro forma results in the period in which they were incurred.
|
•
|
The Company incurred an after tax charge of
$931 million
(
$1,113 million
pretax) in 2017 related to the fair value step‑up of inventories acquired and sold, excluding the acquired inventory related to Historical DuPont's Seed business. The 2017 pro forma results were adjusted to exclude this charge. The pro forma results for 2016 were adjusted to include this charge, as well as estimated charges of
$60 million
after tax (
$69 million
pretax) related to the remaining fair value step-up of inventories to be sold, excluding acquired inventory related to Historical DuPont's Seed business.
|
•
|
To align with seasonality, charges related to the fair value step-up of acquired inventory related to Historical DuPont’s Seed business were reflected in the pro forma results based on actual quantity of units sold during those periods as if the fair value step‑up of inventories had occurred on January 1, 2016. Accordingly,
$300 million
of after tax charges (
$431 million
pretax) for the year ended December 31, 2017 and
$1,222 million
of after tax charges (
$1,667 million
pretax) for the year ended December 31, 2016, were reflected in the pro forma results.
|
•
|
The pro forma results for the year ended December 31, 2016 were adjusted to include charges related to change in control provisions within a U.S. non-qualified pension plan for Historical Dow and within other certain employee agreements as if they were incurred on January 1, 2016. The majority of which related to charges for the payment of pension plan obligations of
$594 million
after tax (
$892 million
pretax) recorded in the fourth quarter of 2017. See Note
19
for further information.
|
•
|
The 2017 pro forma results were adjusted to exclude a
$170 million
after tax charge incurred in September 2017 related to the impact of changes in tax attributes. The pro forma results for the year ended December 31, 2016, were adjusted to include this charge as if it were incurred on January 1, 2016.
|
DowDuPont Pro Forma Results of Operations
|
2017
|
2016
|
||||
In millions (except share amounts)
|
||||||
Net sales
|
$
|
79,686
|
|
$
|
71,321
|
|
Income from continuing operations, net of tax
|
$
|
4,677
|
|
$
|
2,341
|
|
Earnings per common share from continuing operations - basic
|
$
|
1.94
|
|
$
|
0.84
|
|
Earnings per common share from continuing operations - diluted
|
$
|
1.92
|
|
$
|
0.83
|
|
1.
|
See Note
5
for additional information.
|
2.
|
The FMC Transactions include a cash consideration payment to Historical DuPont of approximately
$1,200 million
, which reflected the difference in value between the Divested Ag Business and the H&N Business, subject to certain customary inventory and net working capital adjustments.
|
3.
|
Upon closing and pursuant to the terms of the FMC Transaction Agreement, Historical DuPont entered into favorable supply contracts with FMC. Historical DuPont recorded these contracts as intangible assets recognized at the fair value of off-market contracts. See Notes
5
and
13
for additional information.
|
H&N Business Assets Acquired and Liabilities Assumed on Nov 1, 2017
|
|
||
In millions
|
|
||
Fair Value of Assets Acquired
|
|
||
Cash and cash equivalents
|
$
|
16
|
|
Accounts and notes receivable - Trade and other
|
144
|
|
|
Inventories
|
304
|
|
|
Property
|
489
|
|
|
Goodwill
|
732
|
|
|
Other intangible assets
|
435
|
|
|
Other current assets, deferred charges and other non-current assets
|
14
|
|
|
Total Assets
|
$
|
2,134
|
|
Fair Value of Liabilities Assumed
|
|
||
Accounts payable, accrued and other current liabilities
|
72
|
|
|
Deferred income tax liabilities
|
92
|
|
|
Total Liabilities
|
$
|
164
|
|
Net Assets (Consideration for the H&N Business)
|
$
|
1,970
|
|
Net Trade Revenue by Segment and Business or Major Product Line
|
2018
|
||
In millions
|
|||
Crop Protection
|
$
|
6,332
|
|
Seed
|
7,969
|
|
|
Agriculture
|
$
|
14,301
|
|
Coatings & Performance Monomers
|
$
|
3,915
|
|
Consumer Solutions
|
5,660
|
|
|
Performance Materials & Coatings
|
$
|
9,575
|
|
Industrial Solutions
|
$
|
4,733
|
|
Polyurethanes & CAV
|
10,363
|
|
|
Others
|
20
|
|
|
Industrial Intermediates & Infrastructure
|
$
|
15,116
|
|
Hydrocarbons & Energy
|
$
|
7,486
|
|
Packaging and Specialty Plastics
|
16,610
|
|
|
Packaging & Specialty Plastics
|
$
|
24,096
|
|
Advanced Printing
|
$
|
512
|
|
Display Technologies
|
313
|
|
|
Interconnect Solutions
|
1,174
|
|
|
Photovoltaic & Advanced Materials
|
1,085
|
|
|
Semiconductor Technologies
|
1,636
|
|
|
Electronics & Imaging
|
$
|
4,720
|
|
Industrial Biosciences
|
$
|
2,152
|
|
Nutrition & Health
|
4,649
|
|
|
Nutrition & Biosciences
|
$
|
6,801
|
|
Engineering Polymers
|
$
|
2,730
|
|
Performance Resins
|
1,309
|
|
|
Performance Solutions
|
1,581
|
|
|
Transportation & Advanced Polymers
|
$
|
5,620
|
|
Aramids
|
$
|
1,566
|
|
Construction
|
1,661
|
|
|
TYVEK® Enterprise
|
1,211
|
|
|
Water Solutions
|
1,015
|
|
|
Safety & Construction
|
$
|
5,453
|
|
Corporate
|
$
|
295
|
|
Total
|
$
|
85,977
|
|
1.
|
Europe, Middle East and Africa.
|
Contract Balances
|
Dec 31, 2018
|
Topic 606 Adjustments Jan 1, 2018
|
Dec 31, 2017
|
||||||
In millions
|
|||||||||
Accounts and notes receivable - Trade
|
$
|
12,376
|
|
$
|
87
|
|
$
|
11,314
|
|
Contract assets - current
1
|
$
|
85
|
|
$
|
58
|
|
$
|
—
|
|
Contract assets - noncurrent
2
|
$
|
47
|
|
$
|
43
|
|
$
|
—
|
|
Contract liabilities - current
3
|
$
|
2,092
|
|
$
|
52
|
|
$
|
2,131
|
|
Contract liabilities - noncurrent
4
|
$
|
1,420
|
|
$
|
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.
|
Results of Operations of Historical DuPont's Divested Ag Business
|
Period Ended
|
||
In millions
|
Sep 1 - Dec 31, 2017
1
|
||
Net sales
|
$
|
199
|
|
Cost of sales
|
194
|
|
|
Research and development expenses
|
30
|
|
|
Selling, general and administrative expenses
2
|
102
|
|
|
Restructuring, goodwill impairment and asset related charges - net
|
(1
|
)
|
|
Sundry income (expense) - net
|
(1
|
)
|
|
Loss from discontinued operations before income taxes
|
$
|
(127
|
)
|
Benefit from income taxes
|
(50
|
)
|
|
Loss from discontinued operations, net of tax
|
$
|
(77
|
)
|
1.
|
The Divested Ag Business was disposed of on November 1, 2017.
|
2.
|
Includes
$44 million
of transaction costs associated with the disposal of the Divested Ag Business.
|
Agriculture Division Program
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Total
|
||||||
(In millions)
|
|||||||||
2018 restructuring charges
|
|
|
|
|
|||||
Agriculture
|
$
|
—
|
|
$
|
6
|
|
$
|
6
|
|
Corporate
|
78
|
|
—
|
|
78
|
|
|||
Total 2018 restructuring charges
|
$
|
78
|
|
$
|
6
|
|
$
|
84
|
|
Charges against the reserve
|
—
|
|
(6
|
)
|
(6
|
)
|
|||
Cash payments
|
(1
|
)
|
—
|
|
(1
|
)
|
|||
Reserve balance at Dec 31, 2018
|
$
|
77
|
|
$
|
—
|
|
$
|
77
|
|
DowDuPont 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
|
|
|
|
|
||||||||
Agriculture
|
$
|
—
|
|
$
|
94
|
|
$
|
40
|
|
$
|
134
|
|
Performance Materials & Coatings
|
—
|
|
9
|
|
2
|
|
11
|
|
||||
Industrial Intermediates & Infrastructure
|
—
|
|
12
|
|
—
|
|
12
|
|
||||
Packing & Specialty Plastics
|
—
|
|
33
|
|
3
|
|
36
|
|
||||
Electronics & Imaging
|
—
|
|
86
|
|
—
|
|
86
|
|
||||
Nutrition & Biosciences
|
—
|
|
1
|
|
—
|
|
1
|
|
||||
Transportation & Advanced Polymers
|
—
|
|
1
|
|
1
|
|
2
|
|
||||
Safety & Construction
|
—
|
|
21
|
|
—
|
|
21
|
|
||||
Corporate
|
510
|
|
33
|
|
28
|
|
571
|
|
||||
Total 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
|
|
|
|
|
||||||||
Agriculture
|
$
|
—
|
|
$
|
207
|
|
$
|
133
|
|
$
|
340
|
|
Performance Materials & Coatings
|
—
|
|
7
|
|
—
|
|
7
|
|
||||
Industrial Intermediates & Infrastructure
|
—
|
|
—
|
|
11
|
|
11
|
|
||||
Packing & Specialty Plastics
|
—
|
|
10
|
|
3
|
|
13
|
|
||||
Electronics & Imaging
|
—
|
|
2
|
|
—
|
|
2
|
|
||||
Nutrition & Biosciences
|
—
|
|
29
|
|
—
|
|
29
|
|
||||
Transportation & Advanced Polymers
|
4
|
|
3
|
|
(1
|
)
|
6
|
|
||||
Safety & Construction
|
—
|
|
7
|
|
17
|
|
24
|
|
||||
Corporate
|
419
|
|
24
|
|
(2
|
)
|
441
|
|
||||
Total 2018 restructuring charges
|
$
|
423
|
|
$
|
289
|
|
$
|
161
|
|
$
|
873
|
|
Charges against the reserve
|
—
|
|
(289
|
)
|
—
|
|
(289
|
)
|
||||
Impact of currency
|
(5
|
)
|
—
|
|
—
|
|
(5
|
)
|
||||
Cash payments
|
(366
|
)
|
—
|
|
(149
|
)
|
(515
|
)
|
||||
Reserve balance at Dec 31, 2018
|
$
|
491
|
|
$
|
—
|
|
$
|
83
|
|
$
|
574
|
|
•
|
The Company will close or consolidate several manufacturing, R&D and administrative facilities around the world aligned with Seed and Crop Protection businesses, including the write-down of other non-manufacturing assets. As a result, the Company recorded a charge of
$94 million
, related to Agriculture. These facilities will be shut down or consolidated by the end of 2019.
|
•
|
The Company recorded a charge of
$86 million
for asset write-downs and write-offs in Electronics & Imaging, including the shutdown of a metalorganic manufacturing facility in Cheonan, South Korea, the write-off of in-process research and development (“IPR&D") and other intangible assets and the consolidation of certain R&D facilities. The South Korean facility was shut down in the second quarter of 2018.
|
•
|
The Company recorded a charge of
$22 million
for asset write-downs and write-offs aligned with an energy project, including the write-off of capital projects and other non-manufacturing assets in Packaging & Specialty Plastics.
|
•
|
The Company wrote-off
$21 million
of assets in Safety & Construction, including intangible assets as a result of the Clean Filtration Technologies plant shutdown in the fourth quarter of 2017.
|
•
|
The Company recorded a charge of
$67 million
for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets, certain corporate facilities and data centers. The charge related to Performance Materials & Coatings (
$9 million
), Industrial Intermediates & Infrastructure (
$12 million
), Packaging & Specialty Plastics (
$11 million
), Nutrition & Biosciences (
$1 million
), Transportation & Advanced Polymers (
$1 million
) and Corporate (
$33 million
). These manufacturing facilities will be shut down primarily by the end of 2019.
|
•
|
The Company recorded a charge of
$207 million
in Agriculture related primarily to the consolidation or shutdown of manufacturing, R&D and other non-manufacturing facilities and the write-down of inventory. These facilities will be shut down primarily by the end of the third quarter of 2019.
|
•
|
The Company recorded a charge of
$29 million
for asset write-downs and write-offs in Nutrition & Biosciences, including the shutdown of a microbial control manufacturing facility. The manufacturing facility will be shut down by the end of 2019.
|
•
|
The Company recorded a charge of
$53 million
for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets and certain corporate facilities. The charge related to Packaging & Specialty Plastics (
$10 million
), Performance Materials & Coatings (
$7 million
), Electronics & Imaging (
$2 million
), Transportation & Advanced Polymers (
$3 million
), Safety & Construction (
$7 million
) and Corporate (
$24 million
). These manufacturing facilities will be shut down by the end of the third quarter of 2019.
|
2016 Restructuring Charges
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
Performance Materials & Coatings
|
$
|
—
|
|
$
|
27
|
|
$
|
15
|
|
$
|
42
|
|
Industrial Intermediates & Infrastructure
|
—
|
|
70
|
|
13
|
|
83
|
|
||||
Packaging & Specialty Plastics
|
—
|
|
10
|
|
—
|
|
10
|
|
||||
Corporate
|
268
|
|
46
|
|
—
|
|
314
|
|
||||
2016 restructuring charges
|
$
|
268
|
|
$
|
153
|
|
$
|
28
|
|
$
|
449
|
|
Charges against the reserve
|
—
|
|
(153
|
)
|
—
|
|
(153
|
)
|
||||
Cash payments
|
(67
|
)
|
—
|
|
(1
|
)
|
(68
|
)
|
||||
Reserve balance at Dec 31, 2016
|
$
|
201
|
|
$
|
—
|
|
$
|
27
|
|
$
|
228
|
|
Adjustments to the reserve
1
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||
Cash payments
|
(150
|
)
|
—
|
|
(3
|
)
|
(153
|
)
|
||||
Reserve balance at Dec 31, 2017
|
$
|
51
|
|
$
|
—
|
|
$
|
17
|
|
$
|
68
|
|
Adjustments to the reserve
1
|
(8
|
)
|
—
|
|
14
|
|
6
|
|
||||
Cash payments
|
(37
|
)
|
—
|
|
(4
|
)
|
(41
|
)
|
||||
Reserve balance at Dec 31, 2018
|
$
|
6
|
|
$
|
—
|
|
$
|
27
|
|
$
|
33
|
|
1.
|
Included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income. Charges for severance and related benefit costs related to Corporate and costs associated with exit and disposal activities related to Performance Materials & Coatings.
|
•
|
Historical Dow recorded a charge of
$70 million
for asset write-downs and write-offs including the shutdown of a solar manufacturing facility in Midland, Michigan; the write-down of a solar facility in Milpitas, California; and, the write-off of capital projects and IPR&D. The charge was related to Industrial Intermediates & Infrastructure. The Midland facility was shut down in the third quarter of 2016.
|
•
|
To enhance competitiveness and streamline costs associated with the ownership restructure of Dow Silicones, a silicones manufacturing facility in Yamakita, Japan, was shut down in the fourth quarter of 2018. In addition, an idled facility was shut down in the second quarter of 2016. As a result, Historical Dow recorded a charge of
$25 million
related to Performance Materials & Coatings.
|
•
|
Historical Dow recorded a charge of
$25 million
related to Corporate to close and/or consolidate certain corporate facilities and data centers.
|
•
|
A decision was made to shut down a small manufacturing facility and to write-down other non-manufacturing assets, including a cost method investment and certain aircraft. Write-downs of
$33 million
were recorded, related to Performance Materials & Coatings (
$2 million
), Packaging & Specialty Plastics (
$10 million
) and Corporate (
$21 million
). The manufacturing facility was shut down in the second quarter of 2016.
|
Sundry Income (Expense) - Net
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Non-operating pension and other postretirement benefit plan net credits (costs)
1
|
$
|
487
|
|
$
|
(549
|
)
|
$
|
34
|
|
Gain on sales of other assets and investments
2
|
110
|
|
198
|
|
170
|
|
|||
Interest income
|
210
|
|
147
|
|
107
|
|
|||
Foreign exchange losses, net
3
|
(234
|
)
|
(63
|
)
|
(126
|
)
|
|||
Loss on early extinguishment of debt
4
|
(135
|
)
|
—
|
|
—
|
|
|||
Gain and post-close adjustments on Historical Dow's ownership restructure of Dow Silicones
5
|
(47
|
)
|
—
|
|
2,445
|
|
|||
Loss on divestitures
|
(14
|
)
|
—
|
|
(26
|
)
|
|||
Gain on DAS Divested Ag Business
6
|
—
|
|
635
|
|
—
|
|
|||
Gain on divestiture of Historical Dow's EAA Business
6
|
—
|
|
227
|
|
—
|
|
|||
Gain related to Historical Dow's Nova patent infringement award
7
|
—
|
|
137
|
|
—
|
|
|||
Loss related to Historical Dow's Bayer CropScience arbitration matter
7
|
—
|
|
(469
|
)
|
—
|
|
|||
Impact of split-off of Historical Dow's chlorine value chain
|
—
|
|
7
|
|
6
|
|
|||
Settlement of Historical Dow's urethane matters class action lawsuit and opt-out cases
7
|
—
|
|
—
|
|
(1,235
|
)
|
|||
Costs associated with Historical Dow's portfolio and productivity actions
|
—
|
|
—
|
|
(41
|
)
|
|||
Other - net
|
215
|
|
147
|
|
152
|
|
|||
Total sundry income (expense) - net
|
$
|
592
|
|
$
|
417
|
|
$
|
1,486
|
|
1.
|
Presented in accordance with ASU 2017-07. See Notes
1
,
2
and
19
for additional information.
|
2.
|
The 2018 amount includes a
$20 million
gain related to Historical Dow's sale of its equity interest in MEGlobal and a
$22 million
gain related to Agriculture asset sales.
|
3.
|
The 2018 amount includes a
$50 million
foreign exchange loss related to adjustments to Historical DuPont's foreign currency exchange contracts as a result of U.S. tax reform.
|
4.
|
See Note
15
for additional information.
|
5.
|
See Note
3
for additional information.
|
6.
|
See Note
5
for additional information.
|
7.
|
See Note
16
for additional information.
|
Accrued and Other Current Liabilities at Dec 31
|
2018
|
2017
|
||||
In millions
|
||||||
Accrued payroll
|
$
|
1,686
|
|
$
|
1,931
|
|
Deferred revenue
|
$
|
2,565
|
|
$
|
2,606
|
|
•
|
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
. The Company recorded a cumulative benefit of
$2,784 million
(
$118 million
benefit in 2018 and
$2,666 million
benefit in 2017) to “Provision (Credit) for income taxes on continuing operations” in the consolidated statements of income with respect to the remeasurement of the Company's deferred tax balances.
|
•
|
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 recorded a cumulative charge of
$1,639 million
(
$59 million
charge in 2018 and
$1,580 million
charge in 2017) to "Provision (Credit) for income taxes on continuing operations" with respect to the one-time transition tax.
|
•
|
In the year ended December 31, 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 (Credit) for income taxes on continuing operations."
|
•
|
For tax years beginning after December 31, 2017, The Act introduces new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). The Company has made the policy election to record any liability associated with GILTI in the period in which it is incurred.
|
Geographic Allocation of Income (Loss) and Provision (Credit) for Income Taxes
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Income (Loss) from continuing operations before income taxes
|
|
|
|
||||||
Domestic
1, 2,3
|
$
|
230
|
|
$
|
(2,804
|
)
|
$
|
485
|
|
Foreign
1,2
|
5,263
|
|
3,997
|
|
3,928
|
|
|||
Income from continuing operations before income taxes
|
$
|
5,493
|
|
$
|
1,193
|
|
$
|
4,413
|
|
Current tax expense (benefit)
|
|
|
|
||||||
Federal
|
$
|
(60
|
)
|
$
|
(98
|
)
|
$
|
91
|
|
State and local
|
13
|
|
22
|
|
21
|
|
|||
Foreign
|
1,970
|
|
1,766
|
|
1,156
|
|
|||
Total current tax expense
|
$
|
1,923
|
|
$
|
1,690
|
|
$
|
1,268
|
|
Deferred tax (benefit) expense
|
|
|
|
||||||
Federal
4
|
$
|
(160
|
)
|
$
|
(1,764
|
)
|
$
|
(1,255
|
)
|
State and local
|
(36
|
)
|
8
|
|
(10
|
)
|
|||
Foreign
|
(238
|
)
|
(410
|
)
|
6
|
|
|||
Total deferred tax benefit
|
$
|
(434
|
)
|
$
|
(2,166
|
)
|
$
|
(1,259
|
)
|
Provision (Credit) for income taxes on continuing operations
|
$
|
1,489
|
|
$
|
(476
|
)
|
$
|
9
|
|
Income from continuing operations, net of tax
|
$
|
4,004
|
|
$
|
1,669
|
|
$
|
4,404
|
|
1.
|
In 2018, the domestic component of "Income (Loss) from continuing operations before income taxes" included
$2.1 billion
of integration and separation costs and a
$1.0 billion
charge recognized in "Cost of sales" related to the fair value step-up of inventories assumed in the Merger and the acquisition of the H&N Business. The foreign component included a
$0.6 billion
charge recognized in "Cost of sales" related to the fair value step-up of inventories assumed in the Merger and the acquisition of the H&N Business. See Note
3
for additional information.
|
2.
|
In 2017, the domestic component of "Income (Loss) from continuing operations before income taxes" included a
$1.5 billion
goodwill impairment charge,
$1.0 billion
of integration and separation costs,
$0.5 billion
of restructuring charges related to the Synergy Program and
$0.3 billion
of income from portfolio actions, primarily related to the Merger remedy actions. The foreign component included a
$1.1 billion
charge recognized in "Cost of sales" related to the fair value step-up of inventories assumed in the Merger and the acquisition of the H&N Business,
$0.6 billion
of income from portfolio actions and
$0.4 billion
of restructuring charges. See Notes
3
,
6
and
13
for additional information.
|
3.
|
In 2016, the domestic component of "Income (Loss) from continuing operations before income taxes" included approximately
$2.1 billion
of income from portfolio actions, primarily related to the Dow Silicones ownership restructure, and approximately
$2.6 billion
of expenses related to the urethane matters class action lawsuit and opt-out cases settlements, asbestos-related charge and charges for environmental matters. See Notes
3
,
6
and
16
for additional information.
|
4.
|
The 2016 amount reflects the tax impact of accrued one-time items and reduced domestic income which limited the utilization of tax credits.
|
1.
|
Includes the impact of valuation allowances in foreign jurisdictions.
|
2.
|
See Notes
3
and
5
for additional information.
|
3.
|
Includes a net tax charge of
$25 million
and a net tax benefit of
$261 million
related to an internal entity restructuring associated with the Intended Business Separations for the years ended December 31, 2018 and 2017, respectively.
|
4.
|
Reflects the impact of the adoption of ASU 2016-09, "Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting," which was adopted January 1, 2017, and resulted in the recognition of excess tax benefits related to stock-based compensation in "Provision (Credit) for income taxes on continuing operations."
|
Deferred Tax Balances at Dec 31
|
2018
|
2017
|
||||||||||
In millions
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
||||||||
Property
|
$
|
460
|
|
$
|
3,593
|
|
$
|
508
|
|
$
|
3,634
|
|
Tax loss and credit carryforwards
1
|
3,634
|
|
—
|
|
3,187
|
|
—
|
|
||||
Postretirement benefit obligations
|
3,845
|
|
376
|
|
4,227
|
|
199
|
|
||||
Other accruals and reserves
|
1,639
|
|
168
|
|
1,661
|
|
190
|
|
||||
Intangibles
|
471
|
|
6,818
|
|
460
|
|
7,296
|
|
||||
Inventory
|
197
|
|
534
|
|
165
|
|
768
|
|
||||
Long-term debt
|
24
|
|
—
|
|
109
|
|
—
|
|
||||
Investments
|
295
|
|
641
|
|
295
|
|
611
|
|
||||
Unrealized exchange gains (losses), net
|
—
|
|
141
|
|
—
|
|
71
|
|
||||
Other – net
|
984
|
|
582
|
|
806
|
|
535
|
|
||||
Subtotal
|
$
|
11,549
|
|
$
|
12,853
|
|
$
|
11,418
|
|
$
|
13,304
|
|
Valuation allowances
1,2,3
|
(2,407
|
)
|
—
|
|
(2,511
|
)
|
—
|
|
||||
Total
|
$
|
9,142
|
|
$
|
12,853
|
|
$
|
8,907
|
|
$
|
13,304
|
|
Net Deferred Tax Liability
|
$
|
(3,711
|
)
|
|
$
|
(4,397
|
)
|
|
1.
|
The Company has corrected its valuation allowance (with a corresponding reduction in tax loss and credit carryforwards) in the amount of
$238 million
for the year ended December 31, 2017 as a result of a change in the Delaware state apportionment methodology.
|
2.
|
Primarily related to the realization of recorded tax benefits on tax loss carryforwards from operations in the United States, Brazil, Luxembourg and Asia Pacific.
|
3.
|
In 2018, the Company established a full valuation allowance against the net deferred tax asset position of a legal entity in Brazil due to revised financial projections, resulting in a charge of
$75 million
to "Provision (Credit) for income taxes on continuing operations" in the consolidated statements of income.
|
Operating Loss and Tax Credit Carryforwards
|
Deferred Tax Asset
|
|||||
In millions
|
2018
|
2017
|
||||
Operating loss carryforwards
|
|
|
||||
Expire within 5 years
|
$
|
344
|
|
$
|
288
|
|
Expire after 5 years or indefinite expiration
1
|
2,456
|
|
2,550
|
|
||
Total operating loss carryforwards
|
$
|
2,800
|
|
$
|
2,838
|
|
Tax credit carryforwards
|
|
|
||||
Expire within 5 years
|
$
|
40
|
|
$
|
49
|
|
Expire after 5 years or indefinite expiration
|
794
|
|
300
|
|
||
Total tax credit carryforwards
|
$
|
834
|
|
$
|
349
|
|
Total operating loss and tax credit carryforwards
|
$
|
3,634
|
|
$
|
3,187
|
|
1.
|
The Company has corrected its valuation allowance (with a corresponding reduction in tax loss and credit carryforwards) in the amount of
$238 million
for the year ended December 31, 2017 as a result of a change in the Delaware state apportionment methodology.
|
Total Gross Unrecognized Tax Benefits
|
|
|
|
||||||
In millions
|
2018
|
2017
1
|
2016
|
||||||
Total unrecognized tax benefits at Jan 1
|
$
|
994
|
|
$
|
231
|
|
$
|
280
|
|
Decreases related to positions taken on items from prior years
|
(51
|
)
|
(6
|
)
|
(12
|
)
|
|||
Increases related to positions taken on items from prior years
2
|
142
|
|
46
|
|
153
|
|
|||
Increases related to positions taken in the current year
3
|
11
|
|
747
|
|
135
|
|
|||
Settlement of uncertain tax positions with tax authorities
2
|
(13
|
)
|
(11
|
)
|
(325
|
)
|
|||
Decreases due to expiration of statutes of limitations
|
(6
|
)
|
(14
|
)
|
—
|
|
|||
Exchange (gain) loss
|
(15
|
)
|
1
|
|
—
|
|
|||
Total unrecognized tax benefits at Dec 31
|
$
|
1,062
|
|
$
|
994
|
|
$
|
231
|
|
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate
|
$
|
393
|
|
$
|
496
|
|
$
|
223
|
|
Total amount of interest and penalties (benefit) recognized in "Provision (Credit) for income taxes on continuing operations"
|
$
|
(1
|
)
|
$
|
3
|
|
$
|
(55
|
)
|
Total accrual for interest and penalties associated with unrecognized tax benefits
|
$
|
154
|
|
$
|
157
|
|
$
|
89
|
|
1.
|
The prior year amounts have been revised for amounts previously omitted.
|
2.
|
The 2016 balance includes the impact of a settlement agreement related to a historical change in the legal ownership structure of a nonconsolidated affiliate discussed below.
|
3.
|
The 2017 balance includes
$709 million
assumed in the Merger. The 2016 balance includes
$126 million
assumed in the Dow Silicones ownership restructure.
|
Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2018
|
Earliest Open Year
|
Jurisdiction
|
|
Argentina
|
2009
|
Brazil
|
2006
|
Canada
|
2012
|
China
|
2008
|
Denmark
|
2012
|
Germany
|
2006
|
India
|
2001
|
Italy
|
2013
|
The Netherlands
|
2016
|
Switzerland
|
2012
|
United States:
|
|
Federal income tax
|
2004
|
State and local income tax
|
2004
|
Net Income for Earnings Per Share Calculations - Basic
|
2018
|
2017
|
2016
|
||||||
In millions
|
|||||||||
Income from continuing operations, net of tax
|
$
|
4,004
|
|
$
|
1,669
|
|
$
|
4,404
|
|
Net income attributable to noncontrolling interests
|
(155
|
)
|
(132
|
)
|
(86
|
)
|
|||
Preferred stock dividends
1
|
—
|
|
—
|
|
(340
|
)
|
|||
Net income attributable to participating securities
2
|
(17
|
)
|
(13
|
)
|
(22
|
)
|
|||
Income from continuing operations attributable to common stockholders
|
$
|
3,832
|
|
$
|
1,524
|
|
$
|
3,956
|
|
Loss from discontinued operations, net of tax
|
(5
|
)
|
(77
|
)
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
3,827
|
|
$
|
1,447
|
|
$
|
3,956
|
|
Earnings Per Share Calculations - Basic
|
2018
|
2017
|
2016
|
||||||
Dollars per share
|
|||||||||
Income from continuing operations attributable to common stockholders
|
$
|
1.66
|
|
$
|
0.97
|
|
$
|
3.57
|
|
Loss from discontinued operations, net of tax
|
—
|
|
(0.05
|
)
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
1.66
|
|
$
|
0.92
|
|
$
|
3.57
|
|
Net Income for Earnings Per Share Calculations - Diluted
|
2018
|
2017
|
2016
|
||||||
In millions
|
|||||||||
Income from continuing operations, net of tax
|
$
|
4,004
|
|
$
|
1,669
|
|
$
|
4,404
|
|
Net income attributable to noncontrolling interests
|
(155
|
)
|
(132
|
)
|
(86
|
)
|
|||
Preferred stock dividends
1, 3
|
—
|
|
—
|
|
(340
|
)
|
|||
Net income attributable to participating securities
2
|
(17
|
)
|
(13
|
)
|
(22
|
)
|
|||
Income from continuing operations attributable to common stockholders
|
$
|
3,832
|
|
$
|
1,524
|
|
$
|
3,956
|
|
Loss from discontinued operations, net of tax
|
(5
|
)
|
(77
|
)
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
3,827
|
|
$
|
1,447
|
|
$
|
3,956
|
|
Earnings Per Share Calculations - Diluted
|
2018
|
2017
|
2016
|
||||||
Dollars per share
|
|||||||||
Income from continuing operations attributable to common stockholders
|
$
|
1.65
|
|
$
|
0.95
|
|
$
|
3.52
|
|
Loss from discontinued operations, net of tax
|
—
|
|
(0.04
|
)
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
1.65
|
|
$
|
0.91
|
|
$
|
3.52
|
|
Share Count Information
|
2018
|
2017
|
2016
|
|||
Shares in millions
|
||||||
Weighted-average common shares - basic
4, 5
|
2,301.0
|
|
1,579.8
|
|
1,108.1
|
|
Plus dilutive effect of equity compensation plans
4
|
14.5
|
|
18.3
|
|
15.1
|
|
Weighted-average common shares - diluted
4, 6
|
2,315.5
|
|
1,598.1
|
|
1,123.2
|
|
Stock options and restricted stock units excluded from EPS calculations
7
|
9.6
|
|
1.4
|
|
1.9
|
|
1.
|
On December 30, 2016, Historical Dow converted all shares of its Cumulative Convertible Perpetual Preferred Stock, Series A ("Preferred Stock") into shares of Historical Dow's common stock. As a result of this conversion, no shares of Historical Dow Preferred Stock are issued or outstanding. See Note
17
for additional information.
|
2.
|
Historical Dow restricted stock units (formerly termed deferred stock) are considered participating securities due to Historical Dow's practice of paying dividend equivalents on unvested shares.
|
3.
|
Preferred Stock dividends were not added back in the calculation of diluted earnings per share for the period ended December 31, 2016, because the effect of an assumed conversion of Historical Dow's Preferred Stock would have been antidilutive.
|
4.
|
As a result of the Merger, the share amounts for the year ended December 31, 2017, reflect a weighted averaging effect of Historical Dow shares outstanding prior to August 31, 2017 and DowDuPont shares outstanding on and after August 31, 2017.
|
5.
|
On December 30, 2016, Historical Dow converted
4 million
shares of Historical Dow Preferred Stock into
96.8 million
shares of Historical Dow's common stock. As a result of this conversion,
0.5 million
shares of Historical Dow common stock are included in "Weighted-average common shares - basic" for the year ended December 31, 2016.
|
6.
|
The calculation of diluted earnings per share for the year ended December 31, 2016, excludes
96.3 million
shares of Historical Dow common stock because the effect of an assumed conversion of Historical Dow Preferred Stock for the full period would have been antidilutive.
|
7.
|
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 at Dec 31
|
2018
|
2017
|
||||
In millions
|
||||||
Finished goods
|
$
|
9,814
|
|
$
|
9,701
|
|
Work in process
|
3,969
|
|
4,512
|
|
||
Raw materials
|
1,419
|
|
1,267
|
|
||
Supplies
|
1,321
|
|
1,296
|
|
||
Total
|
$
|
16,523
|
|
$
|
16,776
|
|
Adjustment of inventories to a LIFO basis
|
98
|
|
216
|
|
||
Total inventories
|
$
|
16,621
|
|
$
|
16,992
|
|
Property at Dec 31
|
Estimated Useful Lives (Years)
|
2018
|
2017
|
|||||
In millions
|
||||||||
Land and land improvements
|
0-25
|
|
$
|
3,472
|
|
$
|
3,448
|
|
Buildings
|
1-50
|
|
8,723
|
|
8,667
|
|
||
Machinery and equipment
|
1-25
|
|
53,864
|
|
51,312
|
|
||
Other property
|
3-50
|
|
5,414
|
|
5,277
|
|
||
Construction in progress
|
—
|
|
3,870
|
|
4,600
|
|
||
Total property
|
|
$
|
75,343
|
|
$
|
73,304
|
|
In millions
|
2018
|
2017
|
2016
|
||||||
Depreciation expense
|
$
|
3,740
|
|
$
|
2,755
|
|
$
|
2,130
|
|
Capitalized interest
|
$
|
108
|
|
$
|
247
|
|
$
|
243
|
|
Investments in Nonconsolidated Affiliates at Dec 31
|
|
|
||||
In millions
|
2018
1
|
2017
1
|
||||
Investment in nonconsolidated affiliates
|
$
|
5,204
|
|
$
|
5,336
|
|
Accrued and other current liabilities
|
(81
|
)
|
(46
|
)
|
||
Other noncurrent obligations
|
(495
|
)
|
(752
|
)
|
||
Net investment in nonconsolidated affiliates
|
$
|
4,628
|
|
$
|
4,538
|
|
1.
|
The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2018, was
$23 million
less than its share of the investees’ net assets (
$32 million
less at December 31, 2017), exclusive of additional differences relating to the Merger, EQUATE Petrochemical K.S.C.C. ("EQUATE") and AFSI, which are discussed separately in the disclosures that follow.
|
Principal Nonconsolidated Affiliates at Dec 31
|
Country
|
Ownership Interest
|
|||||
|
2018
|
2017
|
2016
|
||||
EQUATE Petrochemical Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The HSC Group:
|
|
|
|
|
|||
DC HSC Holdings LLC
1
|
United States
|
50
|
%
|
50
|
%
|
50
|
%
|
Hemlock Semiconductor L.L.C.
|
United States
|
50.1
|
%
|
50.1
|
%
|
50.1
|
%
|
The Kuwait Olefins Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The Kuwait Styrene Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
Map Ta Phut Olefins Company Limited
2
|
Thailand
|
32.77
|
%
|
32.77
|
%
|
32.77
|
%
|
Sadara Chemical Company
|
Saudi Arabia
|
35
|
%
|
35
|
%
|
35
|
%
|
The SCG-Dow Group:
|
|
|
|
|
|||
Siam Polyethylene Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Polystyrene Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Styrene Monomer Co., Ltd.
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Synthetic Latex Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
1.
|
DC HSC Holdings LLC holds an 80.5 percent indirect ownership interest in Hemlock Semiconductor Operations LLC.
|
2.
|
Historical Dow's effective ownership of Map Ta Phut Olefins Company Limited is
32.77 percent
, of which Historical Dow directly owns
20.27 percent
and indirectly owns
12.5
percent through its equity interest in Siam Polyethylene Company Limited.
|
Equity Earnings from Principal Nonconsolidated Affiliates
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
1
|
||||||
Equity in earnings of principal nonconsolidated affiliates
|
$
|
950
|
|
$
|
701
|
|
$
|
449
|
|
1.
|
Equity in earnings of principal nonconsolidated affiliates for 2016 includes the results of Dow Silicones through May 31, 2016.
|
1.
|
The results in this table reflect purchase and sale activity between certain principal nonconsolidated affiliates and Historical Dow, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
|
2.
|
The summarized income statement information for 2016 includes the results of Dow Silicones through May 31, 2016.
|
Goodwill
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Total
|
||||||||||||||||||
In millions
|
|||||||||||||||||||||||||||
Balance at Jan 1, 2017
1
|
$
|
1,472
|
|
$
|
4,938
|
|
$
|
1,085
|
|
$
|
1,518
|
|
$
|
4,155
|
|
$
|
320
|
|
$
|
601
|
|
$
|
1,183
|
|
$
|
15,272
|
|
Goodwill recognized from Merger
2
|
13,644
|
|
—
|
|
—
|
|
3,521
|
|
4,040
|
|
12,201
|
|
6,283
|
|
5,416
|
|
45,105
|
|
|||||||||
Goodwill impairment
|
—
|
|
(1,491
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,491
|
)
|
|||||||||
Sale of SKC Haas Display Films
3
|
—
|
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
|||||||||
Divestiture of EAA Business
4
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
|||||||||
Goodwill recognized from H&N acquisition
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
718
|
|
—
|
|
—
|
|
718
|
|
|||||||||
Divestiture of DAS Divested Ag Business
6
|
(128
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(128
|
)
|
|||||||||
Dissolution of joint venture
7
|
—
|
|
48
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
48
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
|||||||||
Foreign currency impact
|
(115
|
)
|
194
|
|
16
|
|
33
|
|
14
|
|
(59
|
)
|
(14
|
)
|
(4
|
)
|
65
|
|
|||||||||
Balance at Dec 31, 2017
|
$
|
14,873
|
|
$
|
3,689
|
|
$
|
1,101
|
|
$
|
5,044
|
|
$
|
8,175
|
|
$
|
13,180
|
|
$
|
6,870
|
|
$
|
6,595
|
|
$
|
59,527
|
|
Measurement period adjustments - Merger
2
|
94
|
|
—
|
|
—
|
|
82
|
|
57
|
|
(201
|
)
|
162
|
|
198
|
|
392
|
|
|||||||||
Measurement period adjustments - H&N Business
5
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14
|
|
—
|
|
—
|
|
14
|
|
|||||||||
Foreign currency impact
|
(278
|
)
|
(39
|
)
|
(5
|
)
|
(25
|
)
|
(44
|
)
|
(350
|
)
|
(65
|
)
|
(85
|
)
|
(891
|
)
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
(10
|
)
|
|||||||||
Balance at Dec 31, 2018
|
$
|
14,689
|
|
$
|
3,650
|
|
$
|
1,096
|
|
$
|
5,101
|
|
$
|
8,188
|
|
$
|
12,643
|
|
$
|
6,967
|
|
$
|
6,698
|
|
$
|
59,032
|
|
1.
|
Updated for changes in reportable segments effective in the third quarter of 2018. Refer to Note
24
for additional information.
|
2.
|
See Note
3
for further information on goodwill recognized in connection with the Merger.
|
3.
|
On June 30, 2017, Historical Dow sold its ownership interest in the SKC Haas Display Films group of companies. See Note
18
for additional information.
|
4.
|
On September 1, 2017, Historical Dow divested its EAA Business to SK Global Chemical Co., Ltd. See Note
5
for additional information.
|
5.
|
On November 1, 2017, Historical DuPont acquired FMC's H&N Business. See Note
3
for additional information.
|
6.
|
On November 30, 2017, Historical Dow divested the DAS Divested Ag Business. See Note
5
for additional information.
|
7.
|
On December 31, 2017, Historical Dow dissolved a crude acrylic acid joint venture. See Note
23
for additional information.
|
Other Intangible Assets
|
Dec 31, 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
|
$
|
7,761
|
|
$
|
(2,562
|
)
|
$
|
5,199
|
|
$
|
7,627
|
|
$
|
(1,834
|
)
|
$
|
5,793
|
|
Software
|
1,529
|
|
(876
|
)
|
653
|
|
1,420
|
|
(780
|
)
|
640
|
|
||||||
Trademarks/trade names
|
1,772
|
|
(745
|
)
|
1,027
|
|
1,814
|
|
(596
|
)
|
1,218
|
|
||||||
Customer-related
|
14,236
|
|
(2,895
|
)
|
11,341
|
|
14,537
|
|
(2,151
|
)
|
12,386
|
|
||||||
Microbial cell factories
|
386
|
|
(22
|
)
|
364
|
|
397
|
|
(6
|
)
|
391
|
|
||||||
Favorable supply contracts
|
475
|
|
(111
|
)
|
364
|
|
495
|
|
(17
|
)
|
478
|
|
||||||
Other
1
|
620
|
|
(203
|
)
|
417
|
|
703
|
|
(166
|
)
|
537
|
|
||||||
Total other intangible assets with finite lives
|
$
|
26,779
|
|
$
|
(7,414
|
)
|
$
|
19,365
|
|
$
|
26,993
|
|
$
|
(5,550
|
)
|
$
|
21,443
|
|
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
||||||||||||
IPR&D
2
|
594
|
|
—
|
|
594
|
|
710
|
|
—
|
|
710
|
|
||||||
Germplasm
|
6,265
|
|
—
|
|
6,265
|
|
6,265
|
|
—
|
|
6,265
|
|
||||||
Trademarks/trade names
|
4,741
|
|
—
|
|
4,741
|
|
4,856
|
|
—
|
|
4,856
|
|
||||||
Total other intangible assets
|
$
|
38,379
|
|
$
|
(7,414
|
)
|
$
|
30,965
|
|
$
|
38,824
|
|
$
|
(5,550
|
)
|
$
|
33,274
|
|
1.
|
Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
|
2.
|
Refer to discussion of interim impairment test that follows.
|
Merger Intangible Assets
|
Gross Carrying Amount
|
Weighted-average Amort Period
|
||
Amounts in millions
|
||||
Intangible assets with finite lives:
|
|
|
||
Developed technology
|
$
|
4,239
|
|
12 years
|
Trademarks/trade names
|
1,045
|
|
16 years
|
|
Customer-related
|
9,215
|
|
17 years
|
|
Microbial cell factories
|
400
|
|
23 years
|
|
Other
|
461
|
|
17 years
|
|
Total other intangible assets with finite lives
|
$
|
15,360
|
|
|
Intangible assets with indefinite lives:
|
|
|
||
IPR&D
|
660
|
|
|
|
Germplasm
|
6,263
|
|
|
|
Trademarks/trade names
|
4,788
|
|
|
|
Total other intangible assets
|
$
|
27,071
|
|
|
Amortization Expense
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Other intangible assets, excluding software
|
$
|
1,903
|
|
$
|
1,013
|
|
$
|
544
|
|
Software, included in "Cost of sales"
|
$
|
100
|
|
$
|
87
|
|
$
|
73
|
|
Interests Held at Dec 31
|
|
|
||||
In millions
|
2018
|
2017
|
||||
Carrying value of interests held
1
|
$
|
—
|
|
$
|
677
|
|
Percentage of anticipated credit losses
|
—
|
%
|
2.64
|
%
|
||
Impact to carrying value - 10% adverse change
|
$
|
—
|
|
$
|
—
|
|
Impact to carrying value - 20% adverse change
|
$
|
—
|
|
$
|
1
|
|
1.
|
Included in "Accounts and notes receivable - other" in the consolidated balance sheets.
|
Cash Proceeds
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Sale of receivables
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
Collections reinvested in revolving receivables
|
$
|
—
|
|
$
|
21,293
|
|
$
|
21,652
|
|
Interests in conduits
1
|
$
|
657
|
|
$
|
9,462
|
|
$
|
8,551
|
|
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, Historical Dow 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, including additional guidance from the SEC's Office of the Chief Accountant issued in the third quarter of 2018 that indicated an entity must evaluate daily transaction activity to calculate the value of cash received from beneficial interests in conduits.
|
Trade Accounts Receivable Sold at Dec 31
|
|
|
||||
In millions
|
2018
|
2017
|
||||
Delinquencies on sold receivables still outstanding
|
$
|
—
|
|
$
|
82
|
|
Trade accounts receivable outstanding and derecognized
|
$
|
—
|
|
$
|
612
|
|
Notes Payable
|
Dec 31, 2018
|
Dec 31, 2017
|
||||||||||||||||
In millions
|
Historical Dow
|
Historical DuPont
|
Total
|
Historical Dow
|
Historical DuPont
|
Total
|
||||||||||||
Commercial paper
|
$
|
10
|
|
$
|
1,847
|
|
$
|
1,857
|
|
$
|
231
|
|
$
|
1,436
|
|
$
|
1,667
|
|
Notes payable to banks and other lenders
|
292
|
|
16
|
|
308
|
|
253
|
|
28
|
|
281
|
|
||||||
Total notes payable
|
$
|
302
|
|
$
|
1,863
|
|
$
|
2,165
|
|
$
|
484
|
|
$
|
1,464
|
|
$
|
1,948
|
|
Period-end average interest rates
|
8.61
|
%
|
3.07
|
%
|
|
4.42
|
%
|
1.95
|
%
|
|
Long-Term Debt
|
Dec 31, 2018
|
||||||||||||||||||
In millions
|
DowDuPont Weighted Average Rate
|
DowDuPont
1
|
Historical Dow Weighted Average Rate
|
Historical Dow
|
Historical DuPont Weighted Average Rate
|
Historical DuPont
|
Total
|
||||||||||||
Promissory notes and debentures:
|
|
|
|
|
|
|
|
||||||||||||
Final maturity 2019
|
—
|
%
|
$
|
—
|
|
9.80
|
%
|
$
|
7
|
|
2.23
|
%
|
$
|
263
|
|
$
|
270
|
|
|
Final maturity 2020
|
3.68
|
%
|
2,000
|
|
4.46
|
%
|
1,547
|
|
2.14
|
%
|
2,496
|
|
6,043
|
|
|||||
Final maturity 2021
|
—
|
%
|
—
|
|
4.71
|
%
|
1,424
|
|
2.08
|
%
|
475
|
|
1,899
|
|
|||||
Final maturity 2022
|
—
|
%
|
—
|
|
3.50
|
%
|
1,373
|
|
—
|
%
|
—
|
|
1,373
|
|
|||||
Final maturity 2023
|
4.16
|
%
|
2,800
|
|
7.64
|
%
|
325
|
|
2.48
|
%
|
386
|
|
3,511
|
|
|||||
Final maturity 2024 and thereafter
|
4.98
|
%
|
7,900
|
|
5.73
|
%
|
8,859
|
|
3.69
|
%
|
249
|
|
17,008
|
|
|||||
Other facilities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar loans, various rates and maturities
|
—
|
%
|
—
|
|
3.59
|
%
|
4,533
|
|
3.47
|
%
|
2,015
|
|
6,548
|
|
|||||
Foreign currency loans, various rates and maturities
|
—
|
%
|
—
|
|
3.21
|
%
|
713
|
|
—
|
%
|
—
|
|
713
|
|
|||||
Medium-term notes, varying maturities through 2043
|
—
|
%
|
—
|
|
3.26
|
%
|
778
|
|
2.37
|
%
|
110
|
|
888
|
|
|||||
Capital lease obligations
|
|
|
—
|
|
|
369
|
|
|
117
|
|
486
|
|
|||||||
Unamortized debt discount and issuance costs
|
|
|
(104
|
)
|
|
(334
|
)
|
|
(2
|
)
|
(440
|
)
|
|||||||
Long-term debt due within one year
2, 3
|
|
|
—
|
|
|
(340
|
)
|
|
(297
|
)
|
(637
|
)
|
|||||||
Long-term debt
|
|
$
|
12,596
|
|
|
$
|
19,254
|
|
|
$
|
5,812
|
|
$
|
37,662
|
|
1.
|
Represents the DowDuPont holding company.
|
2.
|
Presented net of current portion of unamortized debt issuance costs.
|
3.
|
Includes capital lease obligations due within a year.
|
Long-Term Debt
|
Dec 31, 2017
|
|||||||||||||
In millions
|
Historical Dow Weighted Average Rate
|
Historical Dow
|
Historical DuPont Weighted Average Rate
|
Historical DuPont
|
Total
|
|||||||||
Promissory notes and debentures:
|
|
|
|
|
|
|||||||||
Final maturity 2018
|
5.78
|
%
|
$
|
339
|
|
1.59
|
%
|
$
|
1,280
|
|
$
|
1,619
|
|
|
Final maturity 2019
|
8.55
|
%
|
2,122
|
|
2.23
|
%
|
521
|
|
2,643
|
|
||||
Final maturity 2020
|
4.46
|
%
|
1,547
|
|
1.79
|
%
|
3,070
|
|
4,617
|
|
||||
Final maturity 2021
|
4.71
|
%
|
1,424
|
|
2.07
|
%
|
1,580
|
|
3,004
|
|
||||
Final maturity 2022
|
3.50
|
%
|
1,373
|
|
—
|
%
|
—
|
|
1,373
|
|
||||
Final maturity 2023 and thereafter
|
6.00
|
%
|
7,182
|
|
3.32
|
%
|
3,492
|
|
10,674
|
|
||||
Other facilities:
|
|
|
|
|
|
|||||||||
U.S. dollar loans, various rates and maturities
|
2.44
|
%
|
4,564
|
|
2.37
|
%
|
1,518
|
|
6,082
|
|
||||
Foreign currency loans, various rates and maturities
|
3.00
|
%
|
814
|
|
2.85
|
%
|
30
|
|
844
|
|
||||
Medium-term notes, varying maturities through 2043
|
3.20
|
%
|
873
|
|
1.22
|
%
|
110
|
|
983
|
|
||||
Tax-exempt bonds, varying maturities through 2038
|
5.66
|
%
|
343
|
|
—
|
%
|
—
|
|
343
|
|
||||
Capital lease obligations
|
|
282
|
|
|
5
|
|
287
|
|
||||||
Unamortized debt discount and issuance costs
|
|
(346
|
)
|
|
—
|
|
(346
|
)
|
||||||
Long-term debt due within one year
1
|
|
(752
|
)
|
|
(1,315
|
)
|
(2,067
|
)
|
||||||
Long-term debt
|
|
$
|
19,765
|
|
|
$
|
10,291
|
|
$
|
30,056
|
|
1.
|
Presented net of current portion of unamortized debt issuance costs.
|
Maturities of Long-Term Debt for Next Five Years at Dec 31, 2018
|
DowDuPont
1
|
Historical Dow
2
|
Historical DuPont
3
|
Total
|
||||||||
In millions
|
||||||||||||
2019
|
$
|
—
|
|
$
|
340
|
|
$
|
295
|
|
$
|
635
|
|
2020
|
$
|
2,000
|
|
$
|
1,833
|
|
$
|
4,504
|
|
$
|
8,337
|
|
2021
|
$
|
—
|
|
$
|
6,247
|
|
$
|
484
|
|
$
|
6,731
|
|
2022
|
$
|
—
|
|
$
|
1,510
|
|
$
|
17
|
|
$
|
1,527
|
|
2023
|
$
|
2,800
|
|
$
|
480
|
|
$
|
392
|
|
$
|
3,672
|
|
1.
|
Represents the DowDuPont holding company.
|
2.
|
Assumes the option to extend a term loan facility related to the Dow Silicones ownership restructure will be exercised.
|
3.
|
Excludes unamortized debt step-up premium.
|
Committed and Available Credit Facilities at Dec 31, 2018
|
||||||||||
In millions
|
Subsidiary
|
Effective Date
|
Committed Credit
|
Credit Available
|
Maturity Date
|
Interest
|
||||
Five Year Competitive Advance and Revolving Credit Facility
|
Historical Dow
|
October 2018
|
$
|
5,000
|
|
$
|
5,000
|
|
October 2023
|
Floating rate
|
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
100
|
|
100
|
|
March 2019
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
100
|
|
100
|
|
October 2019
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
100
|
|
100
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
280
|
|
280
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
100
|
|
100
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2015
|
200
|
|
200
|
|
March 2020
|
Floating rate
|
||
Historical Dow Term Loan Facility
|
Historical Dow
|
February 2016
|
4,500
|
|
—
|
|
December 2021
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
May 2016
|
200
|
|
200
|
|
May 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
July 2016
|
200
|
|
200
|
|
July 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
Historical Dow
|
August 2016
|
100
|
|
100
|
|
August 2020
|
Floating rate
|
||
North American Securitization Facility
|
Historical Dow
|
September 2018
|
800
|
|
800
|
|
September 2019
|
Floating rate
|
||
European Securitization Facility
1
|
Historical Dow
|
October 2018
|
457
|
|
457
|
|
October 2020
|
Floating rate
|
||
Revolving Credit Facility
|
Historical DuPont
|
March 2018
|
3,000
|
|
2,956
|
|
June 2020
|
Floating rate
|
||
Term Loan Facility
|
Historical DuPont
|
March 2018
|
4,500
|
|
2,500
|
|
June 2020
|
Floating rate
|
||
Total Committed and Available Credit Facilities
|
|
|
$
|
19,637
|
|
$
|
13,093
|
|
|
|
1.
|
Equivalent to
Euro 400 million
.
|
(a)
|
the obligation to maintain the ratio of Historical Dow’s consolidated indebtedness to consolidated capitalization at no greater than
0.65
to
1.00
at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement dated October 30, 2018 equals or exceeds
$500 million
,
|
(b)
|
a default if Historical Dow or an applicable subsidiary fails to make any payment, including principal, premium or interest, under the applicable agreement on other indebtedness of, or guaranteed by, Historical Dow or such applicable subsidiary in an aggregate amount of
$100 million
or more when due, or any other default or other event under the applicable agreement with respect to such indebtedness occurs which permits or results in the acceleration of
$400 million
or more in the aggregate of principal, and
|
(c)
|
a default if Historical Dow or any applicable subsidiary fails to discharge or stay within 60 days after the entry of a final judgment against Historical Dow or such applicable subsidiary of more than
$400 million
.
|
Guarantees
|
Dec 31, 2018
|
Dec 31, 2017
|
|||||||||||||
In millions
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
|||||||||
Historical Dow guarantees
|
2023
|
$
|
4,523
|
|
$
|
25
|
|
2023
|
$
|
4,774
|
|
$
|
49
|
|
|
Historical Dow residual value guarantees
|
2028
|
885
|
|
130
|
|
2027
|
889
|
|
135
|
|
|||||
Total Historical Dow guarantees
|
|
$
|
5,408
|
|
$
|
155
|
|
|
$
|
5,663
|
|
$
|
184
|
|
|
Historical DuPont guarantees
|
2022
|
$
|
255
|
|
$
|
—
|
|
2022
|
$
|
260
|
|
$
|
—
|
|
|
Historical DuPont residual value guarantees
|
2025
|
4
|
|
—
|
|
2029
|
37
|
|
—
|
|
|||||
Total Historical DuPont guarantees
|
|
$
|
259
|
|
$
|
—
|
|
|
$
|
297
|
|
$
|
—
|
|
|
Total guarantees
|
|
$
|
5,667
|
|
$
|
155
|
|
|
$
|
5,960
|
|
$
|
184
|
|
Minimum Lease Commitments
|
Dec 31, 2018
|
||||||||
In millions
|
Historical Dow
|
Historical DuPont
|
Total
|
||||||
2019
|
$
|
412
|
|
$
|
242
|
|
$
|
654
|
|
2020
|
369
|
|
128
|
|
497
|
|
|||
2021
|
328
|
|
90
|
|
418
|
|
|||
2022
|
297
|
|
66
|
|
363
|
|
|||
2023
|
253
|
|
44
|
|
297
|
|
|||
2024 and thereafter
|
978
|
|
85
|
|
1,063
|
|
|||
Total
|
$
|
2,637
|
|
$
|
655
|
|
$
|
3,292
|
|
Merger Impact on Historical Dow, Historical DuPont and DowDuPont Common Stock
|
Prior to Merger
1
|
Effect of Merger
2
|
||||
In thousands, except per share values
|
||||||
Historical Dow
|
|
|
||||
Common Stock, par value per share
|
$
|
2.50
|
|
N/A
|
|
|
Common Stock, shares authorized
|
1,500,000
|
|
—
|
|
||
Common Stock, shares issued and outstanding
|
1,225,328
|
|
—
|
|
||
Historical DuPont
|
|
|
||||
Common Stock, par value per share
|
$
|
0.30
|
|
N/A
|
|
|
Common Stock, shares authorized
|
1,800,000
|
|
—
|
|
||
Common Stock, shares issued and outstanding
|
868,338
|
|
—
|
|
||
DowDuPont
|
|
|
||||
Common Stock, par value per share
|
$
|
—
|
|
$
|
0.01
|
|
Common Stock, shares authorized
|
—
|
|
5,000,000
|
|
||
Common Stock, shares issued for Dow shares converted
|
—
|
|
1,225,328
|
|
||
Common Stock, shares issued for DuPont shares converted (Ratio of 1.2820 to 1)
|
—
|
|
1,113,209
|
|
1.
|
Immediately prior to the effective time of the Merger.
|
2.
|
At the effective time of the Merger.
|
Dividends Declared and Paid
|
|
|
|
||||||
In millions
|
2018
|
2017
1
|
2016
|
||||||
Dividends declared to common stockholders
|
$
|
3,491
|
|
$
|
2,558
|
|
$
|
2,037
|
|
Dividends paid to common stockholders
|
$
|
3,491
|
|
$
|
3,394
|
|
$
|
2,037
|
|
1.
|
Dividends declared consists of
$1,673 million
declared to Historical Dow common stockholders prior to the Merger and
$885 million
declared to DowDuPont common stockholders after the Merger. Dividends paid consists of
$2,179 million
paid to Historical Dow common stockholders and
$330 million
paid to Historical DuPont common stockholders for dividends declared prior to the Merger, and
$885 million
paid to DowDuPont common stockholders for dividends declared after the Merger.
|
Historical Dow Treasury Shares Issued Under Historical Dow Stock-Based Compensation Programs
|
|
|
|
||
In thousands
|
2018
|
2017
|
2016
|
||
To employees and non-employee directors
|
N/A
|
14,195
|
|
14,494
|
|
Shares of Historical Dow Common Stock
|
Issued
|
Held in Treasury
|
||
In thousands
|
||||
Balance at Jan 1, 2016
|
1,242,795
|
|
125,853
|
|
Issued
1
|
—
|
|
(14,494
|
)
|
Repurchased
|
—
|
|
17,107
|
|
Preferred stock converted to common stock
|
—
|
|
(96,804
|
)
|
Balance at Dec 31, 2016
|
1,242,795
|
|
31,662
|
|
Issued
1
|
—
|
|
(14,195
|
)
|
Converted to DowDuPont shares or canceled on Aug 31, 2017
2
|
(1,242,795
|
)
|
(17,467
|
)
|
Balance at Aug 31, 2017
|
—
|
|
—
|
|
1.
|
Shares issued to employees and non-employee directors under Historical Dow's equity compensation plans.
|
2.
|
Each share of Historical Dow Common Stock issued and outstanding immediately prior to the Merger was converted into
one
share of DowDuPont Common Stock; Treasury shares were canceled as a result of the Merger.
|
Accumulated Other Comprehensive Loss
|
Unrealized Gains (Losses) on Investments
|
Cumulative Translation Adj
|
Pension and Other Postretire Benefits
|
Derivative Instruments
|
Total Accum Other Comp Loss
|
||||||||||
In millions
|
|||||||||||||||
2016
|
|
|
|
|
|
||||||||||
Balance at Jan 1, 2016
|
$
|
47
|
|
$
|
(1,737
|
)
|
$
|
(6,769
|
)
|
$
|
(208
|
)
|
$
|
(8,667
|
)
|
Other comprehensive income (loss) before reclassifications
|
32
|
|
(644
|
)
|
(1,354
|
)
|
84
|
|
(1,882
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(36
|
)
|
—
|
|
734
|
|
29
|
|
727
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(4
|
)
|
$
|
(644
|
)
|
$
|
(620
|
)
|
$
|
113
|
|
$
|
(1,155
|
)
|
Balance at Dec 31, 2016
|
$
|
43
|
|
$
|
(2,381
|
)
|
$
|
(7,389
|
)
|
$
|
(95
|
)
|
$
|
(9,822
|
)
|
2017
|
|
|
|
|
|
||||||||||
Other comprehensive income (loss) before reclassifications
|
25
|
|
454
|
|
52
|
|
(1
|
)
|
530
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(71
|
)
|
(8
|
)
|
414
|
|
(15
|
)
|
320
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(46
|
)
|
$
|
446
|
|
$
|
466
|
|
$
|
(16
|
)
|
$
|
850
|
|
Balance at Dec 31, 2017
|
$
|
(3
|
)
|
$
|
(1,935
|
)
|
$
|
(6,923
|
)
|
$
|
(111
|
)
|
$
|
(8,972
|
)
|
2018
|
|
|
|
|
|
||||||||||
Balance at Jan 1, 2018
1
|
$
|
17
|
|
$
|
(1,935
|
)
|
$
|
(6,923
|
)
|
$
|
(111
|
)
|
$
|
(8,952
|
)
|
Other comprehensive loss before reclassifications
|
(74
|
)
|
(1,739
|
)
|
(1,086
|
)
|
(15
|
)
|
(2,914
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
7
|
|
(4
|
)
|
460
|
|
66
|
|
529
|
|
|||||
Net other comprehensive income (loss)
|
$
|
(67
|
)
|
$
|
(1,743
|
)
|
$
|
(626
|
)
|
$
|
51
|
|
$
|
(2,385
|
)
|
Reclassification of stranded tax effects
2
|
(1
|
)
|
(107
|
)
|
(927
|
)
|
(22
|
)
|
(1,057
|
)
|
|||||
Balance at Dec 31, 2018
|
$
|
(51
|
)
|
$
|
(3,785
|
)
|
$
|
(8,476
|
)
|
$
|
(82
|
)
|
$
|
(12,394
|
)
|
1.
|
The beginning balance of "Unrealized gains (losses) on investments" was increased by
$20 million
to reflect the impact of adoption of ASU 2016-01. See Notes 1 and 2 for additional information.
|
2.
|
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)
1
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Unrealized gains (losses) on investments
|
$
|
17
|
|
$
|
26
|
|
$
|
(2
|
)
|
Cumulative translation adjustments
|
(6
|
)
|
(98
|
)
|
(171
|
)
|
|||
Pension and other postretirement benefit plans
|
152
|
|
(235
|
)
|
438
|
|
|||
Derivative instruments
|
(14
|
)
|
(2
|
)
|
(32
|
)
|
|||
Tax benefit (expense) from income taxes related to other comprehensive income (loss) items
|
$
|
149
|
|
$
|
(309
|
)
|
$
|
233
|
|
1.
|
Prior year amounts have been updated to conform with the current year presentation.
|
Reclassifications Out of Accumulated Other Comprehensive Loss
|
2018
|
2017
|
2016
|
Consolidated Statements of Income Classification
|
|||||||
In millions
|
|||||||||||
Unrealized (gains) losses on investments
|
$
|
9
|
|
$
|
(110
|
)
|
$
|
(56
|
)
|
See (1) below
|
|
Tax (benefit) expense
|
(2
|
)
|
39
|
|
20
|
|
See (2) below
|
||||
After tax
|
$
|
7
|
|
$
|
(71
|
)
|
$
|
(36
|
)
|
|
|
Cumulative translation adjustments
|
$
|
(4
|
)
|
$
|
(8
|
)
|
$
|
—
|
|
See (3) below
|
|
Pension and other postretirement benefit plans
|
$
|
599
|
|
$
|
607
|
|
$
|
913
|
|
See (4) below
|
|
Tax benefit
|
(139
|
)
|
(193
|
)
|
(179
|
)
|
See (2) below
|
||||
After tax
|
$
|
460
|
|
$
|
414
|
|
$
|
734
|
|
|
|
Derivative instruments
|
$
|
83
|
|
$
|
(13
|
)
|
$
|
34
|
|
See (5) below
|
|
Tax benefit
|
(17
|
)
|
(2
|
)
|
(5
|
)
|
See (2) below
|
||||
After tax
|
$
|
66
|
|
$
|
(15
|
)
|
$
|
29
|
|
|
|
Total reclassifications for the period, after tax
|
$
|
529
|
|
$
|
320
|
|
$
|
727
|
|
|
1.
|
"Net sales" and "Sundry income (expense) - net."
|
2.
|
"Provision (Credit) 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
19
for additional information. In the year ended December 31, 2016,
$360 million
was included in "Sundry income (expense) - net" (
zero
impact to "Provision (Credit) for income taxes on continuing operations") related to the Dow Silicones ownership restructure. See Note
3
for additional information.
|
5.
|
"Cost of sales," "Sundry income (expense) - net" and "Interest expense and amortization of debt discount."
|
Noncontrolling Interests
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Balance at Jan 1
|
$
|
1,597
|
|
$
|
1,242
|
|
$
|
809
|
|
Net income attributable to noncontrolling interests
|
155
|
|
132
|
|
86
|
|
|||
Distributions to noncontrolling interests
1
|
(168
|
)
|
(116
|
)
|
(123
|
)
|
|||
Acquisition of noncontrolling interests
2
|
—
|
|
3
|
|
473
|
|
|||
Noncontrolling interests from Merger
3
|
61
|
|
417
|
|
—
|
|
|||
Deconsolidation of noncontrolling interests
4
|
—
|
|
(123
|
)
|
—
|
|
|||
Cumulative translation adjustments
|
(39
|
)
|
41
|
|
(4
|
)
|
|||
Other
|
2
|
|
1
|
|
1
|
|
|||
Balance at Dec 31
|
$
|
1,608
|
|
$
|
1,597
|
|
$
|
1,242
|
|
1.
|
Distributions to noncontrolling interests is net of
$27 million
in
2018
(
$20 million
in
2017
and
$53 million
in
2016
) in dividends paid to a joint venture, which were reclassified to "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income.
|
2.
|
The 2016 value reflects the amount assumed in the ownership restructure of Dow Silicones. See Note
3
for additional information.
|
3.
|
Relates to Merger and subsequent measurement period adjustments. See Note
3
for additional information.
|
4.
|
On June 30, 2017, Historical Dow sold its ownership interest in the SKC Haas Display Films group of companies. See Note
13
for additional information.
|
Weighted-Average Assumptions for All Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2018
|
2017
|
2018
|
2017
1
|
2016
|
|||||
Discount rate
|
3.80
|
%
|
3.26
|
%
|
3.26
|
%
|
3.50
|
%
|
3.85
|
%
|
Interest crediting rate for applicable benefits
|
3.72
|
%
|
3.61
|
%
|
3.61
|
%
|
3.45
|
%
|
4.81
|
%
|
Rate of compensation increase
2
|
3.42
|
%
|
3.95
|
%
|
3.95
|
%
|
3.88
|
%
|
4.04
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
6.68
|
%
|
6.94
|
%
|
7.22
|
%
|
1.
|
Includes Historical DuPont plans subsequent to the Merger date.
|
2.
|
The December 31, 2018 rate does not include Historical DuPont's U.S. pension plans as employees of these plans no longer accrue additional benefits for future service and eligible compensation.
|
Weighted-Average Assumptions for U.S. Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2018
|
2017
|
2018
|
2017
1
|
2016
|
|||||
Discount rate
|
4.36
|
%
|
3.66
|
%
|
3.66
|
%
|
4.02
|
%
|
4.40
|
%
|
Interest crediting rate for applicable benefits
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
Rate of compensation increase
2
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
4.18
|
%
|
4.50
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
7.08
|
%
|
7.46
|
%
|
7.77
|
%
|
1.
|
Includes Historical DuPont plans subsequent to the Merger date.
|
2.
|
The December 31, 2018 rate does not include Historical DuPont's U.S. pension plans as active employees of these plans no longer accrue additional benefits for future service and eligible compensation.
|
Weighted-Average Assumptions for U.S. Other Postretirement Benefits Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2018
|
2017
|
2018
|
2017
1
|
2016
|
|||||
Discount rate
|
4.23
|
%
|
3.54
|
%
|
3.54
|
%
|
3.76
|
%
|
3.96
|
%
|
Health care cost trend rate assumed for next year
|
7.15
|
%
|
6.52
|
%
|
6.52
|
%
|
7.00
|
%
|
7.25
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate health cost care trend rate)
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
Year that the rate reaches the ultimate health care cost trend rate:
|
|
|
|
|
|
|||||
Historical Dow plans
|
2025
|
|
2025
|
|
2025
|
|
2025
|
|
2025
|
|
Historical DuPont plans
|
2028
|
|
2023
|
|
2023
|
|
2023
|
|
|
1.
|
Includes Historical DuPont plans subsequent to the Merger date.
|
Change in Projected Benefit Obligations, Plan Assets and Funded Status of All Significant Plans
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||
In millions
|
2018
|
2017
1
|
2018
|
2017
1
|
||||||||
Change in projected benefit obligations:
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
57,401
|
|
$
|
30,280
|
|
$
|
4,377
|
|
$
|
1,835
|
|
Merger impact
2
|
—
|
|
26,036
|
|
—
|
|
2,772
|
|
||||
Service cost
|
651
|
|
555
|
|
21
|
|
17
|
|
||||
Interest cost
|
1,638
|
|
1,130
|
|
130
|
|
80
|
|
||||
Plan participants' contributions
|
29
|
|
20
|
|
—
|
|
—
|
|
||||
Actuarial changes in assumptions and experience
|
(2,832
|
)
|
1,781
|
|
(185
|
)
|
(130
|
)
|
||||
Benefits paid
3
|
(3,223
|
)
|
(2,170
|
)
|
(339
|
)
|
(210
|
)
|
||||
Plan amendments
|
34
|
|
14
|
|
—
|
|
—
|
|
||||
Acquisitions/divestitures/other
4
|
(57
|
)
|
72
|
|
—
|
|
—
|
|
||||
Effect of foreign exchange rates
|
(627
|
)
|
875
|
|
(12
|
)
|
13
|
|
||||
Termination benefits/curtailment cost/settlements
5
|
—
|
|
(1,192
|
)
|
—
|
|
—
|
|
||||
Benefit obligations at end of year
|
$
|
53,014
|
|
$
|
57,401
|
|
$
|
3,992
|
|
$
|
4,377
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
43,685
|
|
$
|
21,208
|
|
$
|
—
|
|
$
|
—
|
|
Merger impact
2
|
—
|
|
20,395
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
(1,524
|
)
|
3,049
|
|
—
|
|
—
|
|
||||
Employer contributions
|
2,964
|
|
1,744
|
|
—
|
|
—
|
|
||||
Plan participants' contributions
|
29
|
|
20
|
|
—
|
|
—
|
|
||||
Benefits paid
3
|
(3,223
|
)
|
(2,170
|
)
|
—
|
|
—
|
|
||||
Acquisitions/divestitures/other
6
|
(7
|
)
|
14
|
|
—
|
|
—
|
|
||||
Effect of foreign exchange rates
|
(462
|
)
|
613
|
|
—
|
|
—
|
|
||||
Settlements
7
|
—
|
|
(1,188
|
)
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
41,462
|
|
$
|
43,685
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Funded status:
|
|
|
|
|
||||||||
U.S. plans with plan assets
|
$
|
(6,956
|
)
|
$
|
(8,991
|
)
|
$
|
—
|
|
$
|
—
|
|
Non-U.S. plans with plan assets
|
(2,751
|
)
|
(2,780
|
)
|
—
|
|
—
|
|
||||
All other plans
8
|
(1,845
|
)
|
(1,945
|
)
|
(3,992
|
)
|
(4,377
|
)
|
||||
Funded status at end of year
|
$
|
(11,552
|
)
|
$
|
(13,716
|
)
|
$
|
(3,992
|
)
|
$
|
(4,377
|
)
|
1.
|
Includes Historical DuPont activity subsequent to the Merger Date.
|
2.
|
Plan assets and liabilities assumed in the Merger. Represents remeasurement of the projected benefit obligation and fair value of plan assets for Historical DuPont's plans as of the Merger date.
|
3.
|
In the fourth quarter of 2017, approximately
$140 million
of lump-sum payments were made from Historical DuPont's U.S. qualified pension plan trust fund to a group of separated, vested plan participants who were extended a limited-time opportunity and voluntarily elected to receive their pension benefits in a single lump-sum payment.
|
4.
|
The 2018 impact includes the divestiture of a business with pension benefit obligations of
$37 million
. The 2017 impact includes the reclassification of a China pension liability of
$69 million
from "Other noncurrent obligations" to "Pension and other postretirement benefits - noncurrent" and the divestiture of a South Korean company with pension benefit obligations of
$25 million
.
|
5.
|
The 2017 impact includes the settlement of certain plan obligations for a Historical Dow U.S. non-qualified pension plan of
$1,170 million
required due to a change in control provision. The 2017 impact also includes the conversion of a South Korean pension plan of
$22 million
to a defined contribution plan.
|
6.
|
The 2017 impact relates to the divestiture of a South Korean company.
|
7.
|
The 2017 impact includes payments made of
$1,170 million
to settle certain plan obligations of a Historical Dow U.S. non-qualified pension plan required due to a change in control provision. The 2017 impact also includes payments made of
$18 million
to convert a South Korean pension plan to a defined contribution plan.
|
8.
|
As of December 31, 2018 and December 31, 2017,
$349 million
and
$389 million
, respectively, of the benefit obligations are supported by funding under the Trust agreement, defined in the "Trust Assets" section.
|
Amounts Recognized in the Consolidated Balance Sheets for All Significant Plans
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||
In millions
|
2018
|
2017
1
|
2018
|
2017
1
|
||||||||
Amounts recognized in the consolidated balance sheets at Dec 31:
|
|
|
|
|
||||||||
Deferred charges and other assets
|
$
|
502
|
|
$
|
595
|
|
$
|
—
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(147
|
)
|
(134
|
)
|
(374
|
)
|
(375
|
)
|
||||
Pension and other postretirement benefits - noncurrent
|
(11,907
|
)
|
(14,177
|
)
|
(3,618
|
)
|
(4,002
|
)
|
||||
Net amount recognized
|
$
|
(11,552
|
)
|
$
|
(13,716
|
)
|
$
|
(3,992
|
)
|
$
|
(4,377
|
)
|
|
|
|
|
|
||||||||
Pretax amounts recognized in accumulated other comprehensive loss at
Dec 31:
|
|
|
|
|
||||||||
Net loss (gain)
|
$
|
11,578
|
|
$
|
10,734
|
|
$
|
(419
|
)
|
$
|
(258
|
)
|
Prior service credit
|
(207
|
)
|
(265
|
)
|
—
|
|
—
|
|
||||
Pretax balance in accumulated other comprehensive loss at end of year
|
$
|
11,371
|
|
$
|
10,469
|
|
$
|
(419
|
)
|
$
|
(258
|
)
|
1.
|
Includes Historical DuPont activity subsequent to the Merger Date.
|
Net Periodic Benefit Costs for All Significant Plans for the Year Ended Dec 31
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||||||||||||||
In millions
|
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
||||||||||||
Net Periodic Benefit Costs:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
651
|
|
$
|
555
|
|
$
|
463
|
|
$
|
21
|
|
$
|
17
|
|
$
|
13
|
|
Interest cost
|
1,638
|
|
1,130
|
|
846
|
|
130
|
|
80
|
|
52
|
|
||||||
Expected return on plan assets
|
(2,846
|
)
|
(1,955
|
)
|
(1,447
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
(24
|
)
|
(25
|
)
|
(24
|
)
|
—
|
|
—
|
|
(3
|
)
|
||||||
Amortization of unrecognized (gain) loss
|
649
|
|
638
|
|
587
|
|
(24
|
)
|
(6
|
)
|
(7
|
)
|
||||||
Curtailment/settlement/other
1
|
(10
|
)
|
683
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit costs - Total
|
$
|
58
|
|
$
|
1,026
|
|
$
|
389
|
|
$
|
127
|
|
$
|
91
|
|
$
|
55
|
|
Less: Discontinued operations
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit costs - Continuing operations
|
$
|
58
|
|
$
|
1,025
|
|
$
|
389
|
|
$
|
127
|
|
$
|
91
|
|
$
|
55
|
|
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
|
||||||||||||
Net (gain) loss
|
$
|
1,490
|
|
$
|
680
|
|
$
|
1,954
|
|
$
|
(185
|
)
|
$
|
(131
|
)
|
$
|
14
|
|
Prior service cost
|
34
|
|
14
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
24
|
|
25
|
|
24
|
|
—
|
|
—
|
|
3
|
|
||||||
Amortization of unrecognized gain (loss)
|
(649
|
)
|
(638
|
)
|
(587
|
)
|
24
|
|
6
|
|
7
|
|
||||||
Settlement loss
2
|
2
|
|
(687
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Effect of foreign exchange rates
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Total recognized in other comprehensive (income) loss
|
$
|
902
|
|
$
|
(606
|
)
|
$
|
1,391
|
|
$
|
(161
|
)
|
$
|
(125
|
)
|
$
|
24
|
|
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$
|
960
|
|
$
|
420
|
|
$
|
1,780
|
|
$
|
(34
|
)
|
$
|
(34
|
)
|
$
|
79
|
|
1.
|
The 2017 impact relates to the settlement of a Historical Dow U.S. non-qualified plan triggered by a change in control provision. The 2016 impact relates to the curtailment of benefits for certain participants of a Dow Silicones plan in the U.S.
|
2.
|
The 2017 impact relates to the settlement of a Historical Dow U.S. non-qualified plan triggered by a change in control provision.
|
Estimated Future Benefit Payments at Dec 31, 2018
|
Defined Benefit Pension Plans
|
Other Postretirement Benefits
|
||||
In millions
|
||||||
2019
|
$
|
3,197
|
|
$
|
373
|
|
2020
|
3,172
|
|
364
|
|
||
2021
|
3,182
|
|
355
|
|
||
2022
|
3,198
|
|
344
|
|
||
2023
|
3,219
|
|
330
|
|
||
2024-2028
|
16,078
|
|
1,380
|
|
||
Total
|
$
|
32,046
|
|
$
|
3,146
|
|
Target Allocation for Plan Assets at Dec 31, 2018
|
Historical Dow
|
Historical DuPont
|
||
Asset Category
|
||||
Equity securities
|
36
|
%
|
35
|
%
|
Fixed income securities
|
35
|
|
50
|
|
Alternative investments
|
28
|
|
13
|
|
Other investments
|
1
|
|
2
|
|
Total
|
100
|
%
|
100
|
%
|
Basis of Fair Value Measurements
|
Dec 31, 2018
|
Dec 31, 2017
|
||||||||||||||||||||||
In millions
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Cash and cash equivalents
|
$
|
2,701
|
|
$
|
2,642
|
|
$
|
59
|
|
$
|
—
|
|
$
|
3,829
|
|
$
|
3,728
|
|
$
|
101
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equity securities
1
|
$
|
7,030
|
|
$
|
6,772
|
|
$
|
243
|
|
$
|
15
|
|
$
|
7,798
|
|
$
|
7,428
|
|
$
|
353
|
|
$
|
17
|
|
Non - U.S. equity securities
|
6,824
|
|
6,062
|
|
722
|
|
40
|
|
8,615
|
|
7,399
|
|
1,173
|
|
43
|
|
||||||||
Total equity securities
|
$
|
13,854
|
|
$
|
12,834
|
|
$
|
965
|
|
$
|
55
|
|
$
|
16,413
|
|
$
|
14,827
|
|
$
|
1,526
|
|
$
|
60
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt - government-issued
|
$
|
8,410
|
|
$
|
496
|
|
$
|
7,914
|
|
$
|
—
|
|
$
|
7,859
|
|
$
|
655
|
|
$
|
7,203
|
|
$
|
1
|
|
Debt - corporate-issued
|
5,966
|
|
664
|
|
5,288
|
|
14
|
|
6,481
|
|
621
|
|
5,819
|
|
41
|
|
||||||||
Debt - asset-backed
|
811
|
|
39
|
|
771
|
|
1
|
|
807
|
|
17
|
|
787
|
|
3
|
|
||||||||
Total fixed income securities
|
$
|
15,187
|
|
$
|
1,199
|
|
$
|
13,973
|
|
$
|
15
|
|
$
|
15,147
|
|
$
|
1,293
|
|
$
|
13,809
|
|
$
|
45
|
|
Alternative investments:
2
|
|
|
|
|
|
|
|
|
||||||||||||||||
Hedge funds
|
$
|
162
|
|
$
|
162
|
|
$
|
—
|
|
$
|
—
|
|
$
|
85
|
|
$
|
—
|
|
$
|
83
|
|
$
|
2
|
|
Private market securities
|
2
|
|
—
|
|
—
|
|
2
|
|
14
|
|
—
|
|
—
|
|
14
|
|
||||||||
Real estate
|
355
|
|
262
|
|
—
|
|
93
|
|
363
|
|
260
|
|
7
|
|
96
|
|
||||||||
Derivatives - asset position
|
461
|
|
18
|
|
443
|
|
—
|
|
285
|
|
5
|
|
280
|
|
—
|
|
||||||||
Derivatives - liability position
|
(524
|
)
|
(19
|
)
|
(505
|
)
|
—
|
|
(321
|
)
|
(2
|
)
|
(319
|
)
|
—
|
|
||||||||
Total alternative investments
|
$
|
456
|
|
$
|
423
|
|
$
|
(62
|
)
|
$
|
95
|
|
$
|
426
|
|
$
|
263
|
|
$
|
51
|
|
$
|
112
|
|
Other investments
2
|
$
|
586
|
|
$
|
47
|
|
$
|
333
|
|
$
|
206
|
|
$
|
275
|
|
$
|
37
|
|
$
|
238
|
|
$
|
—
|
|
Subtotal
|
$
|
32,784
|
|
$
|
17,145
|
|
$
|
15,268
|
|
$
|
371
|
|
$
|
36,090
|
|
$
|
20,148
|
|
$
|
15,725
|
|
$
|
217
|
|
Investments measured at net asset value:
2
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt - government-issued
|
$
|
208
|
|
|
|
|
$
|
—
|
|
|
|
|
||||||||||||
Hedge funds
|
2,315
|
|
|
|
|
2,342
|
|
|
|
|
||||||||||||||
Private market securities
|
4,057
|
|
|
|
|
2,773
|
|
|
|
|
||||||||||||||
Real estate
|
2,192
|
|
|
|
|
2,637
|
|
|
|
|
||||||||||||||
Total investments measured at net asset value
|
$
|
8,772
|
|
|
|
|
$
|
7,752
|
|
|
|
|
||||||||||||
Items to reconcile to fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pension trust receivables
3
|
$
|
239
|
|
|
|
|
|
|
|
$
|
154
|
|
|
|
|
|
|
|
||||||
Pension trust payables
4
|
(333
|
)
|
|
|
|
|
|
|
(311
|
)
|
|
|
|
|||||||||||
Total
|
$
|
41,462
|
|
|
|
|
|
|
|
$
|
43,685
|
|
|
|
|
|
|
|
1.
|
Historical DuPont's pension plans directly held
$684 million
(
2 percent
of total plan assets) of DowDuPont common stock at
December 31, 2018
and
$910 million
(
2 percent
of total plan assets) at December 31, 2017.
|
2.
|
Historical Dow reviewed its fair value technique and elected to present assets valued at net asset value per share as a practical expedient outside of the fair value hierarchy. The assets are presented as "Investments measured at net asset value." Prior period amounts were updated to conform with the current year presentation.
|
3.
|
Primarily receivables for investment securities sold.
|
4.
|
Primarily payables for investment securities purchased.
|
Fair Value Measurement of Level 3 Pension Plan Assets
|
Equity Securities
|
Fixed Income Securities
|
Alternative Investments
|
Other Investments
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Balance at Jan 1, 2017, as previously reported
|
$
|
33
|
|
$
|
17
|
|
$
|
4,117
|
|
$
|
95
|
|
$
|
4,262
|
|
Reclassification of investments measured at net asset value
1
|
—
|
|
—
|
|
(4,061
|
)
|
(95
|
)
|
(4,156
|
)
|
|||||
Balance at Jan 1, 2017, as restated
|
$
|
33
|
|
$
|
17
|
|
$
|
56
|
|
$
|
—
|
|
$
|
106
|
|
Assumed in Merger
|
18
|
|
48
|
|
115
|
|
—
|
|
181
|
|
|||||
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2017
|
(1
|
)
|
(3
|
)
|
5
|
|
—
|
|
1
|
|
|||||
Relating to assets held at Dec 31, 2017
|
5
|
|
6
|
|
—
|
|
—
|
|
11
|
|
|||||
Purchases, sales and settlements, net
|
5
|
|
(23
|
)
|
(64
|
)
|
—
|
|
(82
|
)
|
|||||
Balance at Dec 31, 2017
|
$
|
60
|
|
$
|
45
|
|
$
|
112
|
|
$
|
—
|
|
$
|
217
|
|
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2018
|
(5
|
)
|
(76
|
)
|
1
|
|
1
|
|
(79
|
)
|
|||||
Relating to assets held at Dec 31, 2018
|
(4
|
)
|
83
|
|
(3
|
)
|
(11
|
)
|
65
|
|
|||||
Purchases, sales and settlements, net
|
5
|
|
(30
|
)
|
(1
|
)
|
216
|
|
190
|
|
|||||
Transfers out of Level 3, net
|
(1
|
)
|
(7
|
)
|
(14
|
)
|
—
|
|
(22
|
)
|
|||||
Balance at Dec 31, 2018
|
$
|
55
|
|
$
|
15
|
|
$
|
95
|
|
$
|
206
|
|
$
|
371
|
|
1.
|
Historical Dow reviewed its fair value technique and elected to present assets valued at net asset value per share as a practical expedient outside of the fair value hierarchy, including those classified as Level 3 pension plan assets. The assets are presented as "Investments measured at net asset value."
|
Historical Dow Weighted-Average Assumptions
|
2018
|
2017
|
2016
|
|||
Dividend yield
|
2.13
|
%
|
3.01
|
%
|
4.13
|
%
|
Expected volatility
|
23.34
|
%
|
23.71
|
%
|
31.60
|
%
|
Risk-free interest rate
|
2.83
|
%
|
1.28
|
%
|
1.12
|
%
|
Expected life of stock options granted during period (years)
|
6.2
|
|
7.5
|
|
7.8
|
|
Life of Employee Stock Purchase Plan (months)
|
—
|
|
3
|
|
4
|
|
Historical Dow Stock Options
|
2018
|
|||||
Shares in thousands
|
Shares
|
Exercise Price
1
|
||||
Outstanding at Jan 1, 2018
|
26,628
|
|
$
|
38.30
|
|
|
Granted
|
6,571
|
|
$
|
71.43
|
|
|
Exercised
|
(4,074
|
)
|
$
|
30.65
|
|
|
Forfeited/Expired
|
(279
|
)
|
$
|
61.47
|
|
|
Outstanding at Dec 31, 2018
|
28,846
|
|
$
|
46.70
|
|
|
Remaining contractual life in years
|
|
5.46
|
|
|||
Aggregate intrinsic value in millions
|
$
|
327
|
|
|
||
Exercisable at Dec 31, 2018
|
21,813
|
|
$
|
39.99
|
|
|
Remaining contractual life in years
|
|
4.40
|
|
|||
Aggregate intrinsic value in millions
|
$
|
322
|
|
|
Additional Information about Historical Dow Stock Options
|
|
|
|
||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
||||||
Weighted-average fair value per share of options granted
|
$
|
15.38
|
|
$
|
14.44
|
|
$
|
10.95
|
|
Total compensation expense for stock options plans
|
$
|
68
|
|
$
|
37
|
|
$
|
32
|
|
Related tax benefit
|
$
|
15
|
|
$
|
14
|
|
$
|
12
|
|
Total amount of cash received from the exercise of options
|
$
|
112
|
|
$
|
310
|
|
$
|
312
|
|
Total intrinsic value of options exercised
1
|
$
|
160
|
|
$
|
286
|
|
$
|
153
|
|
Related tax benefit
|
$
|
36
|
|
$
|
106
|
|
$
|
57
|
|
Historical Dow RSU Awards
|
2018
|
||||
Shares in thousands
|
Shares
|
Grant Date Fair Value
1
|
|||
Nonvested at Jan 1, 2018
|
13,346
|
|
$
|
50.71
|
|
Granted
|
2,022
|
|
$
|
71.46
|
|
Vested
|
(5,409
|
)
|
$
|
46.04
|
|
Canceled
|
(224
|
)
|
$
|
59.40
|
|
Nonvested at Dec 31, 2018
|
9,735
|
|
$
|
57.41
|
|
Additional Information about Historical Dow RSUs
|
|
|
|
||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
||||||
Weighted-average fair value per share of RSUs granted
|
$
|
71.46
|
|
$
|
61.29
|
|
$
|
46.25
|
|
Total fair value of RSUs vested
|
$
|
382
|
|
$
|
179
|
|
$
|
166
|
|
Related tax benefit
|
$
|
86
|
|
$
|
66
|
|
$
|
61
|
|
Total compensation expense for RSU awards
|
$
|
144
|
|
$
|
178
|
|
$
|
97
|
|
Related tax benefit
|
$
|
32
|
|
$
|
66
|
|
$
|
36
|
|
Historical Dow PSU Awards
|
Target Shares Granted
1
|
Grant Date Fair Value
2
|
||||
Shares in thousands
|
||||||
Year
|
Performance Period
|
|||||
2017
|
Sep 1, 2017 - Aug 31, 2019
|
232
|
|
$
|
71.16
|
|
2017
3
|
Jan 1, 2017 - Dec 31, 2019
|
1,728
|
|
$
|
81.99
|
|
2016
3
|
Jan 1, 2016 - Dec 31, 2018
|
2,283
|
|
$
|
52.68
|
|
Additional Information about Historical Dow PSUs
|
|
|
|
||||||
In millions, except share amounts
|
2018
|
2017
|
2016
|
||||||
Total fair value of PSUs vested and delivered
1
|
$
|
—
|
|
$
|
202
|
|
$
|
103
|
|
Related tax benefit
|
$
|
—
|
|
$
|
75
|
|
$
|
38
|
|
Total compensation expense for PSU awards
|
$
|
12
|
|
$
|
106
|
|
$
|
125
|
|
Related tax benefit
|
$
|
3
|
|
$
|
39
|
|
$
|
46
|
|
Shares of PSUs settled in cash (in thousands)
2
|
—
|
|
616
|
861
|
|||||
Total cash paid to settle PSU awards
3
|
$
|
—
|
|
$
|
38
|
|
$
|
40
|
|
Historical Dow Restricted Stock
|
Shares Issued (in thousands)
|
Weighted-Average Fair Value
|
|||
Year
|
|||||
2018
|
36
|
|
$
|
62.82
|
|
2017
|
33
|
|
$
|
62.04
|
|
2016
|
32
|
|
$
|
50.55
|
|
Additional Information about Historical Dow Employee Stock Purchase Plan
|
|
|
|
||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
||||||
Weighted-average fair value per share of purchase rights granted
|
$
|
—
|
|
$
|
10.70
|
|
$
|
3.40
|
|
Total compensation expense for ESPP
|
$
|
—
|
|
$
|
38
|
|
$
|
7
|
|
Related tax benefit
|
$
|
—
|
|
$
|
14
|
|
$
|
3
|
|
Total amount of cash received from the exercise of purchase rights
|
$
|
—
|
|
$
|
179
|
|
$
|
86
|
|
Total intrinsic value of purchase rights exercised
1
|
$
|
—
|
|
$
|
48
|
|
$
|
23
|
|
Related tax benefit
|
$
|
—
|
|
$
|
18
|
|
$
|
9
|
|
Historical DuPont Weighted-Average Assumptions
|
2018
|
2017
|
||
Dividend yield
|
2.1
|
%
|
2.2
|
%
|
Expected volatility
|
23.3
|
%
|
23.59
|
%
|
Risk-free interest rate
|
2.8
|
%
|
2.1
|
%
|
Expected life of stock options granted during period (years)
|
6.2
|
|
7.2
|
|
Historical DuPont Stock Options
|
2018
|
|||||
Shares in thousands
|
Shares
|
Exercise Price
1
|
||||
Outstanding at Jan 1, 2018
|
15,889
|
|
$
|
48.43
|
|
|
Granted
|
3,251
|
|
$
|
71.85
|
|
|
Exercised
|
(1,920
|
)
|
$
|
44.49
|
|
|
Forfeited/Expired
|
(141
|
)
|
$
|
56.63
|
|
|
Outstanding at Dec 31, 2018
|
17,079
|
|
$
|
53.26
|
|
|
Remaining contractual life in years
|
|
4.77
|
|
|||
Aggregate intrinsic value in millions
|
$
|
910
|
|
|
||
Exercisable at Dec 31, 2018
|
12,103
|
|
$
|
48.14
|
|
|
Remaining contractual life in years
|
|
3.17
|
|
|||
Aggregate intrinsic value in millions
|
$
|
583
|
|
|
Historical DuPont RSUs and PSUs
|
2018
|
||||
Shares in thousands
|
Shares
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at Jan 1, 2018
|
4,198
|
|
$
|
68.28
|
|
Granted
|
965
|
|
$
|
70.37
|
|
Vested
|
(1,904
|
)
|
$
|
67.49
|
|
Canceled
|
(112
|
)
|
$
|
66.86
|
|
Nonvested at Dec 31, 2018
|
3,147
|
|
$
|
68.18
|
|
Fair Value of Financial Instruments at Dec 31
|
2018
|
2017
|
||||||||||||||||||||||
In millions
|
Cost
|
Gain
|
Loss
|
Fair Value
|
Cost
|
Gain
|
Loss
|
Fair Value
|
||||||||||||||||
Cash equivalents
1
|
$
|
9,951
|
|
$
|
12
|
|
$
|
—
|
|
$
|
9,963
|
|
$
|
6,927
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,927
|
|
Restricted cash equivalents
1, 2
|
$
|
500
|
|
$
|
—
|
|
$
|
—
|
|
$
|
500
|
|
$
|
558
|
|
$
|
—
|
|
$
|
—
|
|
$
|
558
|
|
Marketable securities
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Available-for-sale
3
|
$
|
100
|
|
$
|
—
|
|
$
|
—
|
|
$
|
100
|
|
$
|
4
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4
|
|
Held-to-maturity
1, 4
|
34
|
|
—
|
|
—
|
|
34
|
|
952
|
|
—
|
|
—
|
|
952
|
|
||||||||
Total marketable securities
|
$
|
134
|
|
$
|
—
|
|
$
|
—
|
|
$
|
134
|
|
$
|
956
|
|
$
|
—
|
|
$
|
—
|
|
$
|
956
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt
5
|
$
|
714
|
|
$
|
9
|
|
$
|
(23
|
)
|
$
|
700
|
|
$
|
637
|
|
$
|
13
|
|
$
|
(11
|
)
|
$
|
639
|
|
Corporate bonds
|
1,026
|
|
20
|
|
(63
|
)
|
983
|
|
704
|
|
32
|
|
(3
|
)
|
733
|
|
||||||||
Total debt securities
|
$
|
1,740
|
|
$
|
29
|
|
$
|
(86
|
)
|
$
|
1,683
|
|
$
|
1,341
|
|
$
|
45
|
|
$
|
(14
|
)
|
$
|
1,372
|
|
Equity securities
6
|
$
|
17
|
|
$
|
1
|
|
$
|
(2
|
)
|
$
|
16
|
|
$
|
164
|
|
$
|
2
|
|
$
|
(26
|
)
|
$
|
140
|
|
Total other investments
|
$
|
1,757
|
|
$
|
30
|
|
$
|
(88
|
)
|
$
|
1,699
|
|
$
|
1,505
|
|
$
|
47
|
|
$
|
(40
|
)
|
$
|
1,512
|
|
Total cash and restricted cash equivalents, marketable securities and other investments
|
$
|
12,342
|
|
$
|
42
|
|
$
|
(88
|
)
|
$
|
12,296
|
|
$
|
9,946
|
|
$
|
47
|
|
$
|
(40
|
)
|
$
|
9,953
|
|
Long-term debt including debt due within one year
7
|
$
|
(38,299
|
)
|
$
|
390
|
|
$
|
(1,457
|
)
|
$
|
(39,366
|
)
|
$
|
(32,123
|
)
|
$
|
69
|
|
$
|
(2,121
|
)
|
$
|
(34,175
|
)
|
Derivatives relating to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates
|
$
|
—
|
|
$
|
—
|
|
$
|
(64
|
)
|
$
|
(64
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(4
|
)
|
$
|
(4
|
)
|
Foreign currency
8
|
—
|
|
157
|
|
(49
|
)
|
108
|
|
—
|
|
31
|
|
(159
|
)
|
(128
|
)
|
||||||||
Commodities
8
|
—
|
|
91
|
|
(178
|
)
|
(87
|
)
|
—
|
|
130
|
|
(256
|
)
|
(126
|
)
|
||||||||
Total derivatives
|
$
|
—
|
|
$
|
248
|
|
$
|
(291
|
)
|
$
|
(43
|
)
|
$
|
—
|
|
$
|
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
$78 million
at
December 31, 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
December 31, 2018
and
$19 million
at
December 31, 2017
on
$2,290 million
of debt at
December 31, 2018
and
$2,390 million
of debt at
December 31, 2017
.
|
8.
|
Presented net of cash collateral where master netting arrangements allow.
|
Investing Results
1
|
|
|
|
||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Proceeds from sales of available-for-sale securities
|
$
|
1,053
|
|
$
|
245
|
|
$
|
396
|
|
Gross realized gains
|
$
|
21
|
|
$
|
5
|
|
$
|
15
|
|
Gross realized losses
|
$
|
30
|
|
$
|
—
|
|
$
|
1
|
|
1.
|
Prior period amounts were updated to conform with the current year presentation as a result of the adoption of ASU 2016-01.
|
1.
|
Includes marketable securities with maturities of less than one year.
|
Temporarily Impaired Debt Securities at
Dec 31, 2018
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
|||||||||||||
In millions
|
||||||||||||||||||
Government debt
1
|
$
|
287
|
|
$
|
(17
|
)
|
$
|
187
|
|
$
|
(6
|
)
|
$
|
474
|
|
$
|
(23
|
)
|
Corporate bonds
|
724
|
|
(58
|
)
|
64
|
|
(5
|
)
|
788
|
|
(63
|
)
|
||||||
Total temporarily impaired debt securities
|
$
|
1,011
|
|
$
|
(75
|
)
|
$
|
251
|
|
$
|
(11
|
)
|
$
|
1,262
|
|
$
|
(86
|
)
|
Temporarily Impaired Debt Securities at
Dec 31, 2017
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
Fair Value
|
Unrealized losses
|
|||||||||||||
In millions
|
||||||||||||||||||
Government debt
1
|
$
|
295
|
|
$
|
(4
|
)
|
$
|
151
|
|
$
|
(7
|
)
|
$
|
446
|
|
$
|
(11
|
)
|
Corporate bonds
|
163
|
|
(2
|
)
|
19
|
|
(1
|
)
|
182
|
|
(3
|
)
|
||||||
Total temporarily impaired debt securities
|
$
|
458
|
|
$
|
(6
|
)
|
$
|
170
|
|
$
|
(8
|
)
|
$
|
628
|
|
$
|
(14
|
)
|
Notional Amounts - Net
|
Dec 31, 2018
|
Dec 31, 2017
1
|
||||
In millions
|
||||||
Derivatives designated as hedging instruments:
|
|
|
||||
Interest rate swaps
|
$
|
2,049
|
|
$
|
185
|
|
Foreign currency contracts
|
$
|
4,457
|
|
$
|
4,343
|
|
Derivatives not designated as hedging instruments:
|
|
|
||||
Interest rate swaps
|
$
|
5
|
|
$
|
—
|
|
Foreign currency contracts
|
$
|
21,342
|
|
$
|
15,963
|
|
1.
|
Prior period amounts were previously presented on a gross basis and have been updated to conform with the current year net presentation.
|
1.
|
Prior period amounts were previously presented on a gross basis and have been updated to conform with the current year net presentation.
|
Fair Value of Derivative Instruments
|
Dec 31, 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:
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
98
|
|
$
|
(42
|
)
|
$
|
56
|
|
Commodity contracts
|
Other current assets
|
47
|
|
(13
|
)
|
34
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
18
|
|
(3
|
)
|
15
|
|
|||
Total
|
|
$
|
163
|
|
$
|
(58
|
)
|
$
|
105
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
200
|
|
$
|
(99
|
)
|
$
|
101
|
|
Commodity contracts
|
Other current assets
|
41
|
|
(1
|
)
|
40
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
4
|
|
(2
|
)
|
2
|
|
|||
Total
|
|
$
|
245
|
|
$
|
(102
|
)
|
$
|
143
|
|
Total asset derivatives
|
|
$
|
408
|
|
$
|
(160
|
)
|
$
|
248
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate swaps
|
Other noncurrent obligations
|
$
|
64
|
|
$
|
—
|
|
$
|
64
|
|
Foreign currency contracts
|
Accrued and other current liabilities
|
46
|
|
(42
|
)
|
4
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
111
|
|
(18
|
)
|
93
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
86
|
|
(9
|
)
|
77
|
|
|||
Total
|
|
$
|
307
|
|
$
|
(69
|
)
|
$
|
238
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
124
|
|
$
|
(79
|
)
|
$
|
45
|
|
Commodity contracts
|
Accrued and other current liabilities
|
7
|
|
(4
|
)
|
3
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
8
|
|
(3
|
)
|
5
|
|
|||
Total
|
|
$
|
139
|
|
$
|
(86
|
)
|
$
|
53
|
|
Total liability derivatives
|
|
$
|
446
|
|
$
|
(155
|
)
|
$
|
291
|
|
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 Historical Dow and Historical DuPont and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Fair Value of Derivative Instruments
|
Dec 31, 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 Historical Dow and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Effect of Derivative Instruments
|
Amount of gain (loss) recognized in OCI
1
|
Amount of gain (loss) recognized in income
2
|
Income Statement Classification
|
||||||||||||||||
In millions
|
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
|||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
—
|
|
Interest expense and amortization of debt discount
3
|
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
26
|
|
2
|
|
2
|
|
(3
|
)
|
4
|
|
6
|
|
Interest expense and amortization of debt discount
|
||||||
Foreign currency contracts
|
19
|
|
(30
|
)
|
8
|
|
(18
|
)
|
7
|
|
(5
|
)
|
Cost of sales
|
||||||
Foreign currency contracts
|
(3
|
)
|
(5
|
)
|
25
|
|
—
|
|
(17
|
)
|
(13
|
)
|
Sundry income (expense) - net
|
||||||
Commodity contracts
|
(69
|
)
|
38
|
|
55
|
|
(63
|
)
|
7
|
|
(28
|
)
|
Cost of sales
|
||||||
Net investment hedges:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
116
|
|
(73
|
)
|
5
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Total derivatives designated as hedging instruments
|
$
|
89
|
|
$
|
(68
|
)
|
$
|
95
|
|
$
|
(84
|
)
|
$
|
(1
|
)
|
$
|
(40
|
)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
195
|
|
$
|
(198
|
)
|
$
|
(180
|
)
|
Sundry income (expense) - net
|
Commodity contracts
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
(9
|
)
|
6
|
|
Cost of sales
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
188
|
|
$
|
(207
|
)
|
$
|
(174
|
)
|
|
Total derivatives
|
$
|
89
|
|
$
|
(68
|
)
|
$
|
95
|
|
$
|
104
|
|
$
|
(208
|
)
|
$
|
(214
|
)
|
|
1.
|
OCI is defined as "Other comprehensive income (loss)."
|
2.
|
Pretax amounts.
|
3.
|
Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item.
|
Basis of Fair Value Measurements on a Recurring Basis
|
Dec 31, 2018
|
Dec 31, 2017
|
||||||||||||||||||||||
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Assets at fair value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
1
|
$
|
—
|
|
$
|
9,963
|
|
$
|
—
|
|
$
|
9,963
|
|
$
|
—
|
|
$
|
6,927
|
|
$
|
—
|
|
$
|
6,927
|
|
Restricted cash equivalents
1, 2
|
—
|
|
500
|
|
—
|
|
500
|
|
—
|
|
558
|
|
—
|
|
558
|
|
||||||||
Marketable securities
3
|
—
|
|
134
|
|
—
|
|
134
|
|
—
|
|
956
|
|
—
|
|
956
|
|
||||||||
Interests in trade accounts receivable conduits
4
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
677
|
|
677
|
|
||||||||
Equity securities
5
|
16
|
|
—
|
|
—
|
|
16
|
|
88
|
|
52
|
|
—
|
|
140
|
|
||||||||
Debt securities:
5
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt
6
|
—
|
|
700
|
|
—
|
|
700
|
|
—
|
|
639
|
|
—
|
|
639
|
|
||||||||
Corporate bonds
|
—
|
|
983
|
|
—
|
|
983
|
|
—
|
|
733
|
|
—
|
|
733
|
|
||||||||
Derivatives relating to:
7
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency
|
—
|
|
298
|
|
—
|
|
298
|
|
—
|
|
172
|
|
—
|
|
172
|
|
||||||||
Commodities
|
17
|
|
93
|
|
—
|
|
110
|
|
47
|
|
100
|
|
—
|
|
147
|
|
||||||||
Total assets at fair value
|
$
|
33
|
|
$
|
12,671
|
|
$
|
—
|
|
$
|
12,704
|
|
$
|
135
|
|
$
|
10,137
|
|
$
|
677
|
|
$
|
10,949
|
|
Liabilities at fair value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term debt including debt due within one year
8
|
$
|
—
|
|
$
|
39,366
|
|
$
|
—
|
|
$
|
39,366
|
|
$
|
—
|
|
$
|
34,175
|
|
$
|
—
|
|
$
|
34,175
|
|
Derivatives relating to:
7
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates
|
—
|
|
64
|
|
—
|
|
64
|
|
—
|
|
4
|
|
—
|
|
4
|
|
||||||||
Foreign currency
|
—
|
|
170
|
|
—
|
|
170
|
|
—
|
|
295
|
|
—
|
|
295
|
|
||||||||
Commodities
|
23
|
|
189
|
|
—
|
|
212
|
|
31
|
|
261
|
|
—
|
|
292
|
|
||||||||
Total liabilities at fair value
|
$
|
23
|
|
$
|
39,789
|
|
$
|
—
|
|
$
|
39,812
|
|
$
|
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 currents assets" in the consolidated balance sheets are held at amortized cost, which approximates fair value.
|
2.
|
Prior period amounts were updated to conform with the current year presentation.
|
3.
|
Primarily time deposits with maturities of greater than three months at time of acquisition.
|
4.
|
Included in "Accounts and notes receivable - Other" in the consolidated balance sheets. See Note
14
for additional information on transfers of financial assets.
|
5.
|
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.
|
6.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
|
7.
|
See Note
21
for the classification of derivatives in the consolidated balance sheets.
|
8.
|
See Note
21
for information on fair value measurements of long-term debt.
|
1.
|
Included in "Accounts and notes receivable - Other" in the consolidated balance sheets.
|
2.
|
Included in "Selling, general and administrative expenses" in the consolidated statements of income.
|
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, including additional guidance from the SEC's Office of the Chief Accountant issued in the third quarter of 2018 that indicated an entity must evaluate daily transaction activity to calculate the value of cash received from beneficial interests in conduits.
|
4.
|
Includes noncash transactions of
$23 million
for the year ended December 31, 2018.
|
Basis of Fair Value Measurements on a Nonrecurring Basis at Dec 31
|
(Level 1)
|
(Level 3)
|
Total Losses
|
||||||
In millions
|
|||||||||
2018
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, intangible assets and equity method investments
|
$
|
—
|
|
$
|
518
|
|
$
|
(387
|
)
|
2017
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, intangible assets, other assets and equity method investments
|
$
|
—
|
|
$
|
61
|
|
$
|
(1,226
|
)
|
Goodwill
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,491
|
)
|
2016
|
|
|
|
||||||
Assets at fair value:
|
|
|
|
||||||
Long-lived assets, other assets and equity method investments
|
$
|
46
|
|
$
|
—
|
|
$
|
(296
|
)
|
1.
|
All assets were restricted at
December 31, 2018
and 2017.
|
2.
|
All liabilities were nonrecourse at
December 31, 2018
and 2017.
|
•
|
Realignment of the HSC Group joint ventures (DC HSC Holdings LLC and Hemlock Semiconductor L.L.C.) from the Consumer Solutions global business in the Performance Materials & Coatings reportable segment to the Electronics & Imaging reportable segment.
|
•
|
Realignment of certain cellulosics product lines from the Nutrition & Health operating segment in the Nutrition & Biosciences reportable segment to the Consumer Solutions global business in the Performance Materials & Coatings reportable segment.
|
•
|
Certain roofing products were realigned from the Building Solutions product line in the Safety & Construction reportable segment to Corporate.
|
•
|
Realignment of the previously divested Epoxy and Chlorinated Organics global businesses from the Industrial Intermediates & Infrastructure reportable segment to Corporate.
|
•
|
In addition, the following realignments within the Industrial Intermediates & Infrastructure reportable segment were made, which had no effect on the segment results:
|
–
|
The Construction Chemicals global business was combined with the Polyurethanes & CAV global business.
|
–
|
Certain product lines associated with the oil and gas industry were realigned from the Industrial Solutions global business to the Polyurethanes & CAV global business.
|
•
|
EQUATE Petrochemical Company K.S.C.C. (“EQUATE”) - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned
42.5 percent
by the Company.
|
•
|
The Kuwait Olefins Company K.S.C.C. (“TKOC”) - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned
42.5 percent
by the Company.
|
•
|
Map Ta Phut Olefins Company Limited (“Map Ta Phut”) - a Thailand-based company that manufactures propylene and ethylene; the Company has an effective ownership of
32.77 percent
(of which
20.27 percent
is owned directly by the Company and aligned with the Industrial Intermediates & Infrastructure segment and
12.5 percent
is owned indirectly through the Company’s equity interest in Siam Polyethylene Company Limited, an entity that is part of The SCG-Dow Group and aligned with the Packaging & Specialty Plastics segment).
|
•
|
Sadara Chemical Company ("Sadara") - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned
35 percent
by the Company.
|
•
|
The Kuwait Styrene Company K.S.C.C. (“TKSC”) - a Kuwait-based company that manufactures styrene monomer; owned
42.5 percent
by the Company.
|
•
|
The SCG-Dow Group - a group of Thailand-based companies (consisting of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Co., Ltd.; and Siam Synthetic Latex Company Limited) that manufacture polyethylene, polystyrene, styrene, latex and specialty elastomers; owned
50 percent
by the Company.
|
Geographic Region Information
|
United States
|
EMEA
|
Rest of World
|
Total
|
||||||||
In millions
|
||||||||||||
2018
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
29,736
|
|
$
|
24,371
|
|
$
|
31,870
|
|
$
|
85,977
|
|
Long-lived assets
|
$
|
23,264
|
|
$
|
6,495
|
|
$
|
6,089
|
|
$
|
35,848
|
|
2017
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
21,210
|
|
$
|
18,069
|
|
$
|
23,205
|
|
$
|
62,484
|
|
Long-lived assets
|
$
|
23,274
|
|
$
|
6,252
|
|
$
|
6,721
|
|
$
|
36,247
|
|
2016
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
16,681
|
|
$
|
13,633
|
|
$
|
17,844
|
|
$
|
48,158
|
|
Long-lived assets
|
$
|
14,812
|
|
$
|
2,708
|
|
$
|
5,966
|
|
$
|
23,486
|
|
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
|
||||||||||||||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
14,301
|
|
$
|
9,575
|
|
$
|
15,116
|
|
$
|
24,096
|
|
$
|
4,720
|
|
$
|
6,801
|
|
$
|
5,620
|
|
$
|
5,453
|
|
$
|
295
|
|
$
|
85,977
|
|
Restructuring, goodwill impairment and asset related charges - net
1
|
479
|
|
21
|
|
11
|
|
46
|
|
2
|
|
29
|
|
2
|
|
24
|
|
491
|
|
1,105
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
—
|
|
4
|
|
284
|
|
287
|
|
412
|
|
16
|
|
—
|
|
24
|
|
(26
|
)
|
1,001
|
|
||||||||||
Operating EBITDA
2
|
2,705
|
|
2,170
|
|
2,543
|
|
4,926
|
|
1,902
|
|
1,632
|
|
1,702
|
|
1,427
|
|
(714
|
)
|
18,293
|
|
||||||||||
Depreciation and amortization
|
941
|
|
855
|
|
653
|
|
1,239
|
|
452
|
|
681
|
|
442
|
|
542
|
|
113
|
|
5,918
|
|
||||||||||
Total assets
|
43,880
|
|
14,208
|
|
12,932
|
|
27,192
|
|
14,947
|
|
24,359
|
|
14,837
|
|
15,247
|
|
20,428
|
|
188,030
|
|
||||||||||
Investment in nonconsolidated affiliates
|
138
|
|
100
|
|
1,850
|
|
1,278
|
|
1,053
|
|
212
|
|
76
|
|
337
|
|
160
|
|
5,204
|
|
||||||||||
Capital expenditures
|
649
|
|
409
|
|
417
|
|
1,163
|
|
279
|
|
391
|
|
182
|
|
347
|
|
—
|
|
3,837
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
7,516
|
|
$
|
8,809
|
|
$
|
12,647
|
|
$
|
21,456
|
|
$
|
3,356
|
|
$
|
2,786
|
|
$
|
2,521
|
|
$
|
3,006
|
|
$
|
387
|
|
$
|
62,484
|
|
Pro forma net sales
|
14,342
|
|
8,768
|
|
12,640
|
|
22,392
|
|
4,775
|
|
5,952
|
|
5,131
|
|
5,142
|
|
393
|
|
79,535
|
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
1
|
134
|
|
1,578
|
|
17
|
|
716
|
|
125
|
|
1
|
|
2
|
|
53
|
|
654
|
|
3,280
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
3
|
|
41
|
|
172
|
|
189
|
|
356
|
|
13
|
|
(1
|
)
|
2
|
|
(11
|
)
|
764
|
|
||||||||||
Pro forma Operating EBITDA
3
|
2,611
|
|
1,774
|
|
2,282
|
|
4,698
|
|
1,840
|
|
1,296
|
|
1,319
|
|
1,194
|
|
(848
|
)
|
16,166
|
|
||||||||||
Depreciation and amortization
|
427
|
|
854
|
|
604
|
|
911
|
|
329
|
|
248
|
|
200
|
|
266
|
|
130
|
|
3,969
|
|
||||||||||
Total assets
|
45,569
|
|
14,907
|
|
12,108
|
|
25,809
|
|
15,066
|
|
25,315
|
|
14,712
|
|
15,452
|
|
23,226
|
|
192,164
|
|
||||||||||
Investment in nonconsolidated affiliates
|
333
|
|
103
|
|
1,699
|
|
1,184
|
|
1,196
|
|
203
|
|
76
|
|
359
|
|
183
|
|
5,336
|
|
||||||||||
Capital expenditures
|
310
|
|
446
|
|
295
|
|
1,965
|
|
138
|
|
156
|
|
74
|
|
186
|
|
—
|
|
3,570
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net sales
|
$
|
6,173
|
|
$
|
6,439
|
|
$
|
10,832
|
|
$
|
18,404
|
|
$
|
2,307
|
|
$
|
948
|
|
$
|
897
|
|
$
|
1,877
|
|
$
|
281
|
|
$
|
48,158
|
|
Pro forma net sales
|
14,060
|
|
6,389
|
|
10,820
|
|
19,848
|
|
4,266
|
|
5,736
|
|
4,497
|
|
4,984
|
|
294
|
|
70,894
|
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
1
|
5
|
|
42
|
|
83
|
|
10
|
|
—
|
|
1
|
|
—
|
|
(3
|
)
|
457
|
|
595
|
|
||||||||||
Asbestos-related charge
4
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,113
|
|
1,113
|
|
||||||||||
Equity in earnings (losses) of nonconsolidated affiliates
|
5
|
|
98
|
|
(18
|
)
|
137
|
|
234
|
|
10
|
|
3
|
|
1
|
|
(28
|
)
|
442
|
|
||||||||||
Pro forma Operating EBITDA
3
|
2,322
|
|
1,015
|
|
1,675
|
|
5,129
|
|
1,388
|
|
1,227
|
|
1,043
|
|
1,133
|
|
(818
|
)
|
14,114
|
|
||||||||||
Depreciation and amortization
|
186
|
|
657
|
|
649
|
|
770
|
|
235
|
|
64
|
|
59
|
|
121
|
|
121
|
|
2,862
|
|
||||||||||
Total assets
|
6,960
|
|
16,256
|
|
11,638
|
|
17,837
|
|
7,592
|
|
1,202
|
|
1,807
|
|
2,832
|
|
13,387
|
|
79,511
|
|
||||||||||
Investment in nonconsolidated affiliates
|
84
|
|
280
|
|
1,588
|
|
881
|
|
659
|
|
30
|
|
—
|
|
7
|
|
218
|
|
3,747
|
|
||||||||||
Capital expenditures
|
222
|
|
404
|
|
232
|
|
2,731
|
|
83
|
|
28
|
|
16
|
|
88
|
|
—
|
|
3,804
|
|
1.
|
See Note
6
for information regarding the Company's restructuring programs and other asset related charges.
|
2.
|
A reconciliation of "Income from continuing operations, net of tax" to Operating EBITDA is provided in the table on the following page.
|
3.
|
A reconciliation of "Income from continuing operations, net of tax" to pro forma Operating EBITDA is provided in the table on the following page.
|
4.
|
See Note
16
for information regarding the asbestos-related charge.
|
1.
|
Included in "Sundry income (expense) - net."
|
Reconciliation of "Income from continuing operations, net of tax" to Pro Forma Operating EBITDA
|
2017
|
2016
|
||||
In millions
|
||||||
Income from continuing operations, net of tax
|
$
|
1,669
|
|
$
|
4,404
|
|
+ Provision (Credit) for income taxes on continuing operations
|
(476
|
)
|
9
|
|
||
Income from continuing operations before income taxes
|
$
|
1,193
|
|
$
|
4,413
|
|
+ Depreciation and amortization
|
3,969
|
|
2,862
|
|
||
- Interest income
1
|
147
|
|
107
|
|
||
+ Interest expense and amortization of debt discount
|
1,082
|
|
858
|
|
||
- Foreign exchange gains (losses), net
1
|
(63
|
)
|
(126
|
)
|
||
+ Pro forma adjustments
|
3,179
|
|
4,298
|
|
||
Pro forma EBITDA
|
$
|
9,339
|
|
$
|
12,450
|
|
- Adjusted significant items
2
|
(6,827
|
)
|
(1,664
|
)
|
||
Pro forma Operating EBITDA
|
$
|
16,166
|
|
$
|
14,114
|
|
1.
|
Included in "Sundry income (expense) - net."
|
2.
|
Significant items, excluding the impact of one-time transaction costs directly attributable to the Merger and reflected in the pro forma adjustments.
|
Significant Items by Segment for 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 divestitures and change in joint venture ownership
1
|
$
|
22
|
|
$
|
(20
|
)
|
$
|
20
|
|
$
|
—
|
|
$
|
(27
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(14
|
)
|
$
|
—
|
|
$
|
(19
|
)
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,463
|
)
|
(2,463
|
)
|
||||||||||
Inventory step-up amortization
3
|
(1,554
|
)
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(67
|
)
|
—
|
|
(5
|
)
|
—
|
|
(1,628
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
4, 5
|
(479
|
)
|
(21
|
)
|
(11
|
)
|
(46
|
)
|
(2
|
)
|
(29
|
)
|
(6
|
)
|
(24
|
)
|
(491
|
)
|
(1,109
|
)
|
||||||||||
Loss on early extinguishment of
debt
6
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(135
|
)
|
(135
|
)
|
||||||||||
Income tax related item
7
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(50
|
)
|
(50
|
)
|
||||||||||
Total
|
$
|
(2,011
|
)
|
$
|
(41
|
)
|
$
|
9
|
|
$
|
(48
|
)
|
$
|
(29
|
)
|
$
|
(96
|
)
|
$
|
(6
|
)
|
$
|
(43
|
)
|
$
|
(3,139
|
)
|
$
|
(5,404
|
)
|
1.
|
Includes a gain related to Historical 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 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 Historical 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
6
for additional information. Also includes net favorable adjustments of
$14 million
related to prior Historical Dow and Historical DuPont restructuring programs and other asset-related charges.
|
5.
|
Includes a
$4 million
dollar restructuring charge related to an equity affiliate of Transportation & Advanced Polymers that is reflected in "Equity in earnings of nonconsolidated affiliates" in the consolidated financial statements.
|
6.
|
Historical Dow and Historical DuPont retired outstanding notes payable resulting in a loss on early extinguishment. See Note
15
for additional information.
|
7.
|
Includes a foreign exchange loss related to adjustments to Historical DuPont's foreign currency exchange contracts as a result of U.S. tax reform.
|
Adjusted Significant Items by Segment for 2017 (Pro Forma)
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Gains on sales of businesses/entities
1
|
$
|
635
|
|
$
|
—
|
|
$
|
—
|
|
$
|
227
|
|
$
|
—
|
|
$
|
162
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7
|
|
$
|
1,031
|
|
Integration and separation costs
2
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,499
|
)
|
(1,499
|
)
|
||||||||||
Inventory step-up amortization
3
|
(425
|
)
|
—
|
|
—
|
|
(120
|
)
|
(144
|
)
|
(404
|
)
|
(212
|
)
|
(178
|
)
|
—
|
|
(1,483
|
)
|
||||||||||
Litigation related charges, awards and adjustments
4
|
(469
|
)
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(332
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
5
|
(134
|
)
|
(1,578
|
)
|
(17
|
)
|
(716
|
)
|
(128
|
)
|
(7
|
)
|
(6
|
)
|
(318
|
)
|
(690
|
)
|
(3,594
|
)
|
||||||||||
Settlement and curtailment items
6
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(892
|
)
|
(892
|
)
|
||||||||||
Transaction costs and productivity actions
7
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(58
|
)
|
(58
|
)
|
||||||||||
Total
|
$
|
(393
|
)
|
$
|
(1,578
|
)
|
$
|
(17
|
)
|
$
|
(472
|
)
|
$
|
(272
|
)
|
$
|
(249
|
)
|
$
|
(218
|
)
|
$
|
(496
|
)
|
$
|
(3,132
|
)
|
$
|
(6,827
|
)
|
1.
|
Includes the sale of the DAS Divested Ag Business (
$635 million
), the sale of Historical Dow's EAA Business (
$227 million
), the sale of Historical DuPont's global food safety diagnostic business (
$162 million
) and post-closing adjustments on the split-off of Historical Dow's chlorine value chain (
$7 million
). See Note
5
for additional information.
|
2.
|
Integration and separation costs related to the Merger, post-Merger integration and Intended Business Separation activities, and costs related to the ownership restructure of Dow Silicones.
|
3.
|
Includes the fair value step-up of Historical DuPont's inventories as a result of the Merger and the acquisition of the H&N Business of
$1,469 million
and the amortization of a basis difference related to the fair value step-up of inventories of
$14 million
. See Note
3
for additional information.
|
4.
|
Includes an arbitration matter with Bayer CropScience (
$469 million
charge) and a patent infringement matter with Nova Chemicals Corporation (
$137 million
gain). See Note
16
for additional information.
|
5.
|
Includes Board approved restructuring plans, goodwill impairment and asset related charges, which includes other asset impairments. See Note
6
for additional information.
|
6.
|
Includes a settlement charge related to the payment of plan obligations to certain participants of a Historical Dow U.S. non-qualified pension plan as a result of the Merger. See Note
19
for additional information.
|
7.
|
Includes implementation costs associated with Historical Dow's restructuring programs and other productivity actions.
|
Adjusted Significant Items by Segment for 2016 (Pro Forma)
|
Agri-culture
|
Perf. Materials & Coatings
|
Ind. Interm. & Infrast.
|
Pack. & Spec. Plastics
|
Elect. & Imaging
|
Nutrition & Biosciences
|
Transp. & Adv. Polymers
|
Safety & Const.
|
Corp.
|
Total
|
||||||||||||||||||||
In millions
|
||||||||||||||||||||||||||||||
Asbestos-related charge
1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,113
|
)
|
$
|
(1,113
|
)
|
Charge for the termination of a terminal use agreement
2
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
||||||||||
Settlement and curtailment items
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
382
|
|
382
|
|
||||||||||
Customer claims adjustment/ recovery
4
|
53
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
53
|
|
||||||||||
Environmental charges
5
|
(2
|
)
|
—
|
|
(1
|
)
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(290
|
)
|
(295
|
)
|
||||||||||
Gains on sales of businesses/entities
6
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
375
|
|
375
|
|
||||||||||
Impact of Dow Silicones ownership restructure
7
|
—
|
|
1,389
|
|
—
|
|
—
|
|
438
|
|
—
|
|
279
|
|
—
|
|
—
|
|
2,106
|
|
||||||||||
Integration and separation costs
8
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(476
|
)
|
(476
|
)
|
||||||||||
Litigation related charges, awards and adjustments
9
|
—
|
|
16
|
|
(1,235
|
)
|
—
|
|
4
|
|
—
|
|
7
|
|
—
|
|
—
|
|
(1,208
|
)
|
||||||||||
Restructuring, goodwill impairment and asset related charges - net
10
|
(96
|
)
|
(42
|
)
|
(83
|
)
|
(10
|
)
|
(2
|
)
|
(162
|
)
|
(7
|
)
|
—
|
|
(774
|
)
|
(1,176
|
)
|
||||||||||
Transaction costs and productivity actions
11
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(195
|
)
|
(195
|
)
|
||||||||||
Total
|
$
|
(45
|
)
|
$
|
1,363
|
|
$
|
(1,319
|
)
|
$
|
(129
|
)
|
$
|
440
|
|
$
|
(162
|
)
|
$
|
279
|
|
$
|
—
|
|
$
|
(2,091
|
)
|
$
|
(1,664
|
)
|
1.
|
Pretax charge related to Historical Dow's election to change its method of accounting for asbestos-related defense costs from expensing as incurred to estimating and accruing a liability. As a result of this accounting policy change, Historical Dow recorded a pretax charge of
$1,009 million
for asbestos-related defense costs through the terminal date of 2049. Historical Dow also recorded a pretax charge of
$104 million
to increase the asbestos-related liability for pending and future claims through the terminal date of 2049. See Note
16
for additional information.
|
2.
|
Pretax charge related to Historical Dow's termination of a terminal use agreement.
|
3.
|
Pretax curtailment gain related to changes to Historical DuPont's U.S. pension plan and U.S. other postretirement benefits plan.
|
4.
|
Includes a reduction in customer claims accrual (
$23 million
) and insurance recoveries for recovery of costs for customer claims (
$30 million
) related to the use of Historical DuPont's IMPRELIS® herbicide.
|
5.
|
Pretax charge for environmental remediation activities at a number of Historical Dow locations, primarily resulting from the culmination of negotiations with regulators and/or final agency approval. See Note
16
for additional information.
|
6.
|
Includes a gain for post-closing adjustments on the split-off of the chlorine value chain (
$6 million
) and the sale of the Historical DuPont (Shenzhen) Manufacturing Limited entity (
$369 million
).
|
7.
|
Includes a non-taxable gain of
$2,445 million
related to the Dow Silicones ownership restructure; a
$317 million
charge for the fair value step-up of inventories; and, a pretax loss of
$22 million
related to the early redemption of debt incurred by Dow Silicones. See Note
3
for additional information.
|
8.
|
Integration and separation costs related to the Merger and the ownership restructure of Dow Silicones.
|
9.
|
Includes a loss of
$1,235 million
related to Historical Dow's settlement of the urethane matters class action lawsuit and the opt-out cases litigation and a gain of
$27 million
related to a decrease in Dow Silicones' implant liability. See Note
16
for additional information.
|
10.
|
Includes Historical Dow and Historical DuPont restructuring activities. See Note
6
for additional information. Also includes a pretax charge related to AgroFresh, including a partial impairment of Historical Dow’s investment in AFSI (
$143 million
) and post-closing adjustments related to non-cash consideration (
$20 million
); a pretax charge for the write-down of Historical DuPont's indefinite lived intangible assets (
$158 million
) related to the realignment of brand marketing strategies and a determination to phase out the use of certain acquired trade names; and, a pretax charge related to the write-down of Historical DuPont's uncompleted enterprise resource planning system (
$435 million
).
|
11.
|
Includes implementation costs associated with Historical Dow's restructuring programs and other productivity actions of
$162 million
and a charge of
$33 million
for a retained litigation matter related to the chlorine value chain.
|
Selected Quarterly Financial Data
|
2018
|
||||||||||||||
In millions, except per share amounts (Unaudited)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
Net sales
|
$
|
21,510
|
|
$
|
24,245
|
|
$
|
20,123
|
|
$
|
20,099
|
|
$
|
85,977
|
|
Gross margin
|
$
|
5,195
|
|
$
|
6,271
|
|
$
|
4,646
|
|
$
|
4,532
|
|
$
|
20,644
|
|
Restructuring, goodwill impairment and asset related charges - net
1
|
$
|
262
|
|
$
|
189
|
|
$
|
290
|
|
$
|
364
|
|
$
|
1,105
|
|
Integration and separation costs
|
$
|
457
|
|
$
|
558
|
|
$
|
666
|
|
$
|
782
|
|
$
|
2,463
|
|
Income from continuing operations, net of tax
2
|
$
|
1,153
|
|
$
|
1,803
|
|
$
|
535
|
|
$
|
513
|
|
$
|
4,004
|
|
Net income
|
$
|
1,148
|
|
$
|
1,803
|
|
$
|
535
|
|
$
|
513
|
|
$
|
3,999
|
|
Net income attributable to DowDuPont Inc.
|
$
|
1,104
|
|
$
|
1,768
|
|
$
|
497
|
|
$
|
475
|
|
$
|
3,844
|
|
Earnings per common share from continuing operations -
basic
3
|
$
|
0.47
|
|
$
|
0.76
|
|
$
|
0.22
|
|
$
|
0.21
|
|
$
|
1.66
|
|
Earnings per common share from continuing operations - diluted
3
|
$
|
0.47
|
|
$
|
0.76
|
|
$
|
0.21
|
|
$
|
0.21
|
|
$
|
1.65
|
|
Dividends declared per share of common stock
|
$
|
0.38
|
|
$
|
0.76
|
|
$
|
—
|
|
$
|
0.38
|
|
$
|
1.52
|
|
Market price range of common stock:
|
|
|
|
|
|
||||||||||
High
|
$
|
77.02
|
|
$
|
70.04
|
|
$
|
71.44
|
|
$
|
64.82
|
|
$
|
77.02
|
|
Low
|
$
|
62.41
|
|
$
|
62.04
|
|
$
|
64.31
|
|
$
|
49.09
|
|
$
|
49.09
|
|
|
|
|
|
|
|
||||||||||
|
2017
4
|
||||||||||||||
In millions, except per share amounts (Unaudited)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
Net sales
|
$
|
13,230
|
|
$
|
13,834
|
|
$
|
15,354
|
|
$
|
20,066
|
|
$
|
62,484
|
|
Gross margin
5
|
$
|
3,036
|
|
$
|
3,073
|
|
$
|
3,168
|
|
$
|
3,416
|
|
$
|
12,693
|
|
Restructuring, goodwill impairment and asset related charges - net
1
|
$
|
(1
|
)
|
$
|
(12
|
)
|
$
|
179
|
|
$
|
3,114
|
|
$
|
3,280
|
|
Integration and separation costs
|
$
|
109
|
|
$
|
136
|
|
$
|
354
|
|
$
|
502
|
|
$
|
1,101
|
|
Income (loss) from continuing operations, net of tax
6
|
$
|
915
|
|
$
|
1,359
|
|
$
|
554
|
|
$
|
(1,159
|
)
|
$
|
1,669
|
|
Net income (loss)
|
$
|
915
|
|
$
|
1,359
|
|
$
|
534
|
|
$
|
(1,216
|
)
|
$
|
1,592
|
|
Net income (loss) attributable to DowDuPont Inc.
|
$
|
888
|
|
$
|
1,321
|
|
$
|
514
|
|
$
|
(1,263
|
)
|
$
|
1,460
|
|
Earnings (loss) per common share from continuing operations - basic
3
|
$
|
0.74
|
|
$
|
1.08
|
|
$
|
0.33
|
|
$
|
(0.52
|
)
|
$
|
0.97
|
|
Earnings (loss) per common share from continuing operations - diluted
3, 7
|
$
|
0.72
|
|
$
|
1.07
|
|
$
|
0.33
|
|
$
|
(0.52
|
)
|
$
|
0.95
|
|
Dividends declared per share of common stock
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.38
|
|
$
|
1.76
|
|
Market price range of common stock:
|
|
|
|
|
|
||||||||||
High
|
$
|
65.00
|
|
$
|
65.26
|
|
$
|
70.41
|
|
$
|
73.32
|
|
$
|
73.32
|
|
Low
|
$
|
57.09
|
|
$
|
60.20
|
|
$
|
63.11
|
|
$
|
68.57
|
|
$
|
57.09
|
|
1.
|
See Note
6
for additional information.
|
2.
|
See Notes
3
,
8
and
15
for information on additional items materially impacting "Income from continuing operations, net of tax." The fourth quarter of 2018 included Merger-related amortization of the fair value step-up of inventories; a loss on the early redemption of debt; and tax adjustments related to The Act. The second and third quarters of 2018 included Merger-related amortization of the fair value step-up of inventories. The first quarter of 2018 included Merger-related amortization of the fair value step-up of inventories and tax adjustments related to The Act.
|
3.
|
Due to quarterly changes in the share count and the allocation of income to participating securities, the sum of the four quarters does not equal the earnings per share amount calculated for the year.
|
4.
|
The Merger closed on August 31, 2017. Financial information for 2017 reflects the results of Historical Dow for all periods presented and the results of Historical DuPont beginning on and after September 1, 2017.
|
5.
|
Previously reported amounts have been updated to reflect the impact of adoption of ASU 2017-07.
|
6.
|
See Notes
3
,
7
,
8
,
16
and
19
for information on additional items materially impacting "Income (loss) from continuing operations, net of tax." The fourth quarter of 2017 included: the effects of The Act, enacted on December 22, 2017; Merger-related amortization of the fair value step-up of inventories; a gain related to the DAS Divested Ag Business; and a charge related to payment of plan obligations to certain participants of a Historical Dow U.S. non-qualified pension plan. The third quarter of 2017 included a gain related to the sale of Historical Dow's EAA Business and Merger-related amortization of the fair value step-up of inventories. The second quarter of 2017 included a gain related to the Nova patent infringement award. The first quarter of 2017 included a loss related to the Bayer CropScience arbitration matter.
|
7.
|
"Earnings (loss) per common share from continuing operations - diluted" for the three-month period ended December 31, 2017 was calculated using "Weighted average common shares outstanding - basic" due to a net loss reported in the period.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
|
/s/ EDWARD D. BREEN
|
|
|
|
/s/ HOWARD UNGERLEIDER
|
Edward D. Breen
|
|
|
|
Howard Ungerleider
|
Chief Executive Officer
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
/s/ JEANMARIE F. DESMOND
|
|
|
|
/s/ RONALD C. EDMONDS
|
Jeanmarie F. Desmond
|
|
|
|
Ronald C. Edmonds
|
Co-Controller, Wilmington, Delaware
|
|
|
|
Co-Controller, Midland, Michigan
|
/s/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 11, 2019
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
The Company’s
2018
Consolidated Financial Statements are included in Part II, Item 8. Financial Statements and Supplementary Data.
|
(2)
|
Financial Statement Schedules – The following Financial Statement Schedule should be read in conjunction with the Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm included in Part II, Item 8. Financial Statements and Supplementary Data:
|
(3)
|
Exhibits – See the Exhibit Index for the exhibits filed with this Annual Report on Form 10-K or incorporated by reference. The following exhibits are filed with this Annual Report on Form 10-K:
|
Exhibit No.
|
Description of Exhibit
|
2.1
|
2.1.1
|
3.1
|
3.2
|
3.2.1
|
10.1
|
10.2
|
10.3
|
10.4
|
10.5
|
10.5.1
|
10.5.2
|
10.5.3
|
10.6
|
10.6.1
|
10.7
|
10.8
|
10.9
|
10.10
|
10.11
|
10.12
|
10.13
|
10.14
|
21*
|
23.1*
|
23.2*
|
23.3*
|
31.1*
|
31.2*
|
32.1*
|
32.2*
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
DowDuPont Inc.
|
Schedule II
|
|
Valuation and Qualifying Accounts
|
|
(In millions) For the year ended Dec 31,
|
2018
|
2017
|
2016
|
||||||
Accounts Receivable - Allowance for Doubtful Receivables
|
|
|
|
||||||
Balance at beginning of period
|
$
|
127
|
|
$
|
110
|
|
$
|
94
|
|
Additions charged to expenses
|
114
|
|
43
|
|
31
|
|
|||
Additions charged to other accounts
1
|
4
|
|
3
|
|
—
|
|
|||
Deductions from reserves
2
|
(54
|
)
|
(29
|
)
|
(15
|
)
|
|||
Balance at end of period
|
$
|
191
|
|
$
|
127
|
|
$
|
110
|
|
Inventory - Obsolescence Reserve
|
|
|
|
||||||
Balance at beginning of period
|
$
|
170
|
|
$
|
123
|
|
$
|
152
|
|
Additions charged to expenses
|
493
|
|
129
|
|
29
|
|
|||
Deductions from reserves
3
|
(338
|
)
|
(82
|
)
|
(58
|
)
|
|||
Balance at end of period
|
$
|
325
|
|
$
|
170
|
|
$
|
123
|
|
Reserves for Other Investments and Noncurrent Receivables
|
|
|
|
||||||
Balance at beginning of period
|
$
|
437
|
|
$
|
358
|
|
$
|
494
|
|
Additions charged to expenses
4
|
44
|
|
83
|
|
153
|
|
|||
Deductions from reserves
5
|
(16
|
)
|
(4
|
)
|
(289
|
)
|
|||
Balance at end of period
|
$
|
465
|
|
$
|
437
|
|
$
|
358
|
|
Deferred Tax Assets - Valuation Allowance
6
|
|
|
|
||||||
Balance at beginning of period
|
$
|
2,511
|
|
$
|
1,061
|
|
$
|
1,000
|
|
Merger impact
|
—
|
|
1,160
|
|
—
|
|
|||
Additions charged to expenses
|
351
|
|
404
|
|
155
|
|
|||
Deductions from reserves
|
(455
|
)
|
(114
|
)
|
(94
|
)
|
|||
Balance at end of period
|
$
|
2,407
|
|
$
|
2,511
|
|
$
|
1,061
|
|
1.
|
Additions to reserves for doubtful receivables charged to other accounts were classified as "Accounts and notes receivable - Other" in the consolidated balance sheets. These reserves relate to Historical Dow's sale of trade accounts receivable. Anticipated credit losses in the portfolio of receivables sold are used to fair value Historical Dow's interests held in trade accounts receivable conduits. See Notes
14
and
22
to the Consolidated Financial Statements for further information.
|
2.
|
Deductions include write-offs, recoveries, currency translation adjustment and other miscellaneous items.
|
3.
|
Deductions include disposals and currency translation adjustments.
|
4.
|
In 2016, additions to reserves for "Other investments and noncurrent receivables" charged to costs and expenses include
$143 million
related to the Company's investment in AgroFresh Solutions, Inc. See Note
6
to the Consolidated Financial Statements for further information.
|
5.
|
In 2016, deductions from reserves for "Other investments and noncurrent receivables" include
$237 million
related to the Dow Silicones ownership restructure. See Note
3
to the Consolidated Financial Statements for further information.
|
6.
|
The Company has corrected its valuation allowance (with a corresponding reduction in tax loss and credit carryforwards) in the amount of
$238 million
for the year ended December 31, 2017 as a result of a change in the Delaware state apportionment methodology.
|
/s/ JEANMARIE F. DESMOND
|
|
/s/ RONALD C. EDMONDS
|
Jeanmarie F. Desmond
|
|
Ronald C. Edmonds
|
Co-Controller, Wilmington, Delaware
|
|
Co-Controller, Midland, Michigan
|
February 11, 2019
|
|
February 11, 2019
|
/s/ LAMBERTO ANDREOTTI
|
|
/s/ MARILLYN A. HEWSON
|
Lamberto Andreotti, Director
|
|
Marillyn A. Hewson, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ AJAY BANGA
|
|
/s/ LOIS D. JULIBER
|
Ajay Banga, Director
|
|
Lois D. Juliber, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ JACQUELINE K. BARTON
|
|
/s/ PAUL POLMAN
|
Jacqueline K. Barton, Director
|
|
Paul Polman, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ JAMES A. BELL
|
|
/s/ JAMES M. RINGLER
|
James A. Bell, Director
|
|
James M. Ringler, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ EDWARD D. BREEN
|
|
/s/ RUTH G. SHAW
|
Edward D. Breen, Director, Chief Executive Officer
|
|
Ruth G. Shaw, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ ROBERT A. BROWN
|
|
/s/ LEE M. THOMAS
|
Robert A. Brown, Director
|
|
Lee M. Thomas, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ ALEXANDER M. CUTLER
|
|
/s/ HOWARD UNGERLEIDER
|
Alexander M. Cutler, Co-Lead Independent Director
|
|
Howard Ungerleider, Chief Financial Officer
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ RICHARD K. DAVIS
|
|
/s/ PATRICK J. WARD
|
Richard K. Davis, Director
|
|
Patrick J. Ward, Director
|
February 11, 2019
|
|
February 11, 2019
|
|
|
|
/s/ JEFF M. FETTIG
|
|
|
Jeff M. Fettig, Executive Chair and Co-Lead Independent Director
|
|
|
February 11, 2019
|
|
|
DowDuPont Inc.
|
Trademark Listing
|
|
DowDuPont Inc.
|
EXHIBIT 21
|
|
SUBSIDIARIES OF THE REGISTRANT
|
|
|
Organized Under
Laws Of
|
Historical Dow Subsidiaries
|
|
The Dow Chemical Company
|
Delaware
|
3313045 Nova Scotia Company
|
Canada
|
Agrigenetics, Inc.
|
Delaware
|
Alforex Seeds LLC
|
Delaware
|
Centen AG LLC
|
Delaware
|
Chemars III LLC
|
Delaware
|
Coodetec Desenvolvimento, Producao e Comercializacao Agricola Ltda.
|
Brazil
|
CUPOSIT Electronic Materials Zhangjiagang Co., Ltd.
|
China
|
Dairyland Seed Co., Inc.
|
Wisconsin
|
DC Alabama, Inc.
|
Delaware
|
DDP Specialty Electronic Materials US 5, LLC
|
Delaware
|
DDP Specialty Electronic Materials US 9, LLC
|
Delaware
|
DDP Specialty Electronic Materials US, Inc.
|
Delaware
|
DDP Specialty Products Germany GmbH & Co. KG
|
Germany
|
Dorinco Reinsurance Company
|
Michigan
|
Dorintal Reinsurance Limited
|
Vermont
|
Dow (Zhangjiagang) Holding Co., Ltd.
|
China
|
Dow AgroSciences (China) Company Limited
|
China
|
Dow AgroSciences (Malaysia) Sdn Bhd
|
Malaysia
|
Dow AgroSciences (Thailand) Limited
|
Thailand
|
Dow AgroSciences A.S.
|
Turkey
|
Dow AgroSciences Argentina S.R.L.
|
Argentina
|
Dow AgroSciences Australia Limited
|
Australia
|
Dow AgroSciences B.V.
|
Netherlands
|
Dow AgroSciences Bolivia S.A.
|
Bolivia
|
Dow AgroSciences Canada Inc.
|
Canada
|
Dow AgroSciences Chile S.A.
|
Chile
|
Dow AgroSciences Danmark A/S
|
Denmark
|
Dow AgroSciences de Colombia S.A.
|
Colombia
|
Dow AgroSciences de Mexico S.A. de C.V.
|
Mexico
|
Dow AgroSciences Distribution S.A.S.
|
France
|
Dow AgroSciences Hungary Kft.
|
Hungary
|
Dow AgroSciences Iberica S.A.
|
Spain
|
Dow AgroSciences India Pvt. Ltd.
|
India
|
Dow AgroSciences Industrial Ltda.
|
Brazil
|
Dow AgroSciences Italia s.r.l.
|
Italy
|
Dow AgroSciences Japan Limited
|
Japan
|
Dow AgroSciences Limited
|
United Kingdom
|
Dow AgroSciences LLC
|
Delaware
|
Dow AgroSciences Pacific Limited
|
Hong Kong
|
Dow AgroSciences Paraguay S.A.
|
Paraguay
|
Dow AgroSciences Polska Sp. z o.o.
|
Poland
|
Dow AgroSciences S.A.S.
|
France
|
Dow AgroSciences s.r.o.
|
Czech Republic
|
Dow AgroSciences Southern Africa (Proprietary) Limited
|
South Africa
|
Dow AgroSciences Switzerland S.A.
|
Switzerland
|
Dow Benelux B.V.
|
Netherlands
|
Dow Silicones Belgium SPRL
|
Belgium
|
Dow Silicones Corporation
|
Michigan
|
Dow Silicones Deutschland GmbH
|
Germany
|
Dow Silicones UK Limited
|
United Kingdom
|
Dow Siloxanes (Zhangjiagang) Co., Ltd.
|
China
|
Dow Southern Africa (Pty) Ltd
|
South Africa
|
Dow Specialties Limited
|
Saudi Arabia
|
Dow Stade Produktions GmbH & Co. OHG
|
Germany
|
Dow Suomi OY
|
Finland
|
Dow Sverige AB
|
Sweden
|
Dow Thames Limited
|
United Kingdom
|
Dow Turkiye Kimya Sanayi ve Ticaret Limited Sirketi
|
Turkey
|
DSP Germany GmbH
|
Germany
|
DSP S.A.S.
|
Netherlands
|
FilmTec Corporation
|
Delaware
|
Fort Saskatchewan Ethylene Storage Limited Partnership
|
Canada
|
Hampshire Chemical Corp.
|
Delaware
|
Multibase S.A.
|
France
|
Mycogen LLC
|
California
|
Nitta Haas Incorporated
|
Japan
|
Nitta Haas Trading Company
|
Japan
|
OMEX Overseas Holdings Inc.
|
Virgin Islands
|
Palmyra do Brasil Indústria e Comércio de Silício Metálico e Recursos Naturais Ltda.
|
Brazil
|
PBBPolisur S.R.L.
|
Argentina
|
Petroquimica-Dow S.A. (Petrodow)
|
Chile
|
Pfister Seeds LLC
|
Delaware
|
Phytogen Seed Company, LLC
|
Delaware
|
PT Dow AgroSciences Indonesia
|
Indonesia
|
PT Dow Indonesia
|
Indonesia
|
Rohm and Haas Canada Investments Limited
|
Canada
|
Rohm and Haas Canada LP
|
Canada
|
Rohm and Haas Chemical (Thailand) Limited
|
Thailand
|
Rohm and Haas Chemicals LLC
|
Delaware
|
Rohm and Haas Company
|
Delaware
|
Rohm and Haas Electronic Materials (Dongguan) Co., Ltd.
|
China
|
Rohm and Haas Electronic Materials (Shanghai) Co., Ltd.
|
China
|
Rohm and Haas Electronic Materials Asia Limited
|
Hong Kong
|
Rohm and Haas Electronic Materials Asia-Pacific Co., Ltd.
|
Taiwan
|
Rohm and Haas Electronic Materials CMP Asia Inc.
|
Delaware
|
Rohm and Haas Electronic Materials CMP Inc.
|
Delaware
|
Rohm and Haas Electronic Materials CMP Korea Ltd.
|
Korea
|
Rohm and Haas Electronic Materials CMP Sdn. Bhd.
|
Malaysia
|
Rohm and Haas Electronic Materials K.K.
|
Japan
|
Rohm and Haas Electronic Materials Korea Ltd.
|
Korea
|
Rohm and Haas Electronic Materials LLC
|
Delaware
|
Rohm and Haas Electronic Materials Singapore Pte. Ltd.
|
Singapore
|
Rohm and Haas Electronic Materials Taiwan Ltd.
|
Taiwan
|
Rohm and Haas International Trading (Shanghai) Co. Ltd.
|
China
|
Rohm and Haas Italia S.r.l.
|
Italy
|
Rohm and Haas Kimyasal Urunler Uretim Dagitim ve Ticaret A.S.
|
Turkey
|
Rohm and Haas Korea Co., Ltd.
|
Korea
|
Rohm and Haas Mexico, S. de R.L. de C.V.
|
Mexico
|
Rohm and Haas New Zealand Limited
|
New Zealand
|
Rohm and Haas Quimica Ltda.
|
Brazil
|
Rohm and Haas Shanghai Chemical Industry Co., Ltd.
|
China
|
Rohm and Haas Singapore (Pte.) Ltd.
|
Singapore
|
Rohm and Haas Taiwan, Inc.
|
Taiwan
|
Rohm and Haas Texas Incorporated
|
Texas
|
Specialty Electronic Materials Italy srl
|
Italy
|
Specialty Electronic Materials Switzerland GmbH
|
Switzerland
|
Specialty Electronic Materials UK Limited
|
United Kingdom
|
Specialty Products US, LLC
|
Delaware
|
The Dow Chemical Company
|
Delaware
|
Union Carbide Corporation
|
New York
|
Univation Technologies, LLC
|
Delaware
|
Zhejiang OMEX Environmental Engineering Co., Ltd.
|
China
|
Historical DuPont Subsidiaries
|
Organized Under
Laws Of |
E.I. du Pont de Nemours and Company
|
Delaware
|
AG Orion Holding B.V.
|
The Netherlands
|
Belco Technologies Corporation
|
Delaware
|
DACI Investments, LLC
|
Delaware
|
DPC (Luxembourg) SARL
|
Luxembourg
|
DPNL BV
|
The Netherlands
|
Du Pont (Australia) PTY LTD.
|
Australia
|
Du Pont Chemical and Energy Operations, Inc.
|
Delaware
|
Du Pont China Limited
|
Delaware
|
Du Pont de Nemours (Belgium) BVBA
|
Belgium
|
Du Pont de Nemours Italiana S.r.l.
|
Italy
|
Du Pont Energy Company, LLC
|
Delaware
|
Du Pont Feedstocks Company
|
Delaware
|
DuPont (China) Research & Development and Management Co., Ltd.
|
China
|
DuPont (Korea) Inc.
|
Korea
|
DuPont (Thailand) Limited
|
Thailand
|
DuPont (U.K.) Industrial Limited
|
United Kingdom
|
DuPont (U.K.) Ltd.
|
United Kingdom
|
DuPont Acquisition (Luxembourg) S.a.r.l.
|
Luxembourg
|
DuPont Apollo (Shenzhen) Limited
|
China
|
DuPont Argentina S.R.L.
|
Argentina
|
DuPont Asturias, S.L.
|
Spain
|
DuPont Belgium North America Finance Company
|
Belgium
|
DuPont Capital Management Corporation
|
Delaware
|
DuPont China Holding Company Ltd.
|
China
|
DuPont China Limited
|
Hong Kong
|
DuPont Company (Singapore) Pte Ltd.
|
Singapore
|
DuPont Coordination Center N.V.
|
Belgium
|
DuPont DACI Beteiligungs-GmbH
|
Austria
|
DuPont de Nemours (Deutschland) GmbH
|
Germany
|
DuPont de Nemours (France) S.A.S.
|
France
|
DuPont de Nemours (Luxembourg) Sarl
|
Luxembourg
|
DuPont de Nemours (Nederland) B.V.
|
The Netherlands
|
DuPont de Nemours (Nederland) Holding B.V.
|
The Netherlands
|
DuPont de Nemours Groupe SAS
|
France
|
DuPont de Nemours Holding Sarl (LLC)
|
Switzerland
|
DuPont de Nemours International Sarl
|
Switzerland
|
DuPont Deutschland Holding GmbH & Co. KG
|
Germany
|
DuPont do Brasil S.A.
|
Brazil
|
DuPont Electronic Polymers L.P.
|
Delaware
|
DuPont Electronics Microcircuits Industries, Ltd.
|
Bermuda
|
DuPont Filaments-Americas, LLC
|
Delaware
|
DuPont Global Operations, LLC
|
Delaware
|
DuPont Iberica, S.L.
|
Spain
|
DuPont International (Luxembourg) SCA
|
Luxembourg
|
DuPont International B.V.
|
The Netherlands
|
DuPont International Operations S.a r.l.
|
Switzerland
|
DuPont Kabushiki Kaisha
|
Japan
|
DuPont KGA B.V.
|
The Netherlands
|
DuPont Mexico S.A. de C.V.
|
Mexico
|
DuPont Nutrition Biosciences ApS
|
Denmark
|
DuPont Nutrition USA, Inc.
|
Delaware
|
DuPont Operations Worldwide, Inc.
|
Delaware
|
DuPont Operations, Inc.
|
Delaware
|
DuPont Performance Materials International Sàrl
|
Switzerland
|
DuPont Science (Luxembourg) S.a r.l.
|
Luxembourg
|
DuPont Solutions (Luxembourg) SARL
|
Luxembourg
|
DuPont Specialty Products Kabushiki Kaisha
|
Japan
|
DuPont Specialty Products Operations Sàrl
|
Switzerland
|
DuPont Taiwan Limited
|
Taiwan
|
DuPont Technology (Luxembourg) S.a.r.l.
|
Luxembourg
|
DuPont Teijin Films China LTD.
|
Hong Kong
|
DuPont Trading (Shanghai) Co., Ltd.
|
China
|
DuPont Turkey Endustri Urunleri Limited Sirketi
|
Turkey
|
DuPont Xingda Filaments Company Limited
|
China
|
E&C EMEA Holding 2 B.V.
|
The Netherlands
|
E&C EMEA Holding 3 B.V.
|
The Netherlands
|
E.I. DuPont Canada Company
|
Canada
|
E.I. DuPont Canada- Thetford Inc.
|
Canada
|
E.I. DuPont India Private Limited
|
India
|
EKC Technology, Inc.
|
California
|
FCC Acquisition Corporation
|
California
|
FMC Biopolymer AS
|
Norway
|
FMC Chemicals (Thailand) Ltd. USD Branch
|
Thailand
|
FMC Manufacturing Limited
|
Ireland
|
Hickory Holdings, Inc.
|
Delaware
|
Hickory Securities, L.L.C.
|
Delaware
|
Howson Algraphy BV
|
The Netherlands
|
IB EMEA Holding 2 B.V.
|
The Netherlands
|
MECS Inc.
|
Delaware
|
N&H EMEA Holding B.V.
|
The Netherlands
|
Performance Science Materials Company
|
Canada
|
Performance Specialty Products Asturias S.L.
|
Spain
|
Pioneer Hi-Bred International, Inc.
|
Iowa
|
PT Du Pont Agricultural Products Indonesia
|
Indonesia
|
Shenzhen DuPont Performance Materials Investment Co., Ltd.
|
China
|
Solae L.L.C.
|
Delaware
|
SP EMEA Holding 7 B.V.
|
The Netherlands
|
SP Holding IB, Inc.
|
Delaware
|
Specialty Products N&H, Inc.
|
Delaware
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.1
|
|
|
|
Form S-3:
|
|
|
|
Nos.
|
333-227202
|
|
|
Form S-8:
|
|
|
|
Nos.
|
333-220324
|
|
333-220330
|
/s/ DELOITTE & TOUCHE
LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 11, 2019
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.2
|
|
|
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
PricewaterhouseCoopers LLP
|
Philadelphia, Pennsylvania
|
February 11, 2019
|
|
Ankura Consulting Group, LLC's Consent
|
EXHIBIT 23.3
|
|
|
|
Form S-3:
|
|
|
|
Nos.
|
333-227202
|
|
|
Form S-8:
|
|
|
|
Nos.
|
333-220324
|
|
333-220330
|
/s/ B. THOMAS FLORENCE
|
B. Thomas Florence
|
Senior Managing Director
|
Ankura Consulting Group, LLC
|
February 11, 2019
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 31.1
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of DowDuPont Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ EDWARD D. BREEN
|
Edward D. Breen
|
Chief Executive Officer
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 31.2
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of DowDuPont Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ HOWARD UNGERLEIDER
|
Howard Ungerleider
|
Chief Financial Officer
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 32.1
|
|
|
|
|
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended
December 31, 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
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ EDWARD D. BREEN
|
Edward D. Breen
|
Chief Executive Officer
|
February 11, 2019
|
|
|
DowDuPont Inc.
|
|
EXHIBIT 32.2
|
|
|
|
|
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended
December 31, 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
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ HOWARD UNGERLEIDER
|
Howard Ungerleider
|
Chief Financial Officer
|
February 11, 2019
|