Form 8-K DUPONT E I DE NEMOURS & For: Oct 28

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October 28, 2014 8:45 AM EDT

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�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

�

FORM�8-K

�

CURRENT REPORT

PURSUANT TO SECTION�13 OR 15(d)�OF

THE SECURITIES EXCHANGE ACT OF 1934

�

Date of Report (Date of Earliest Event Reported) October 28, 2014

�

E. I. du Pont de Nemours and Company

(Exact Name of Registrant as Specified in Its Charter)

�



Delaware	�	1-815	�	51-0014090
(State or Other Jurisdiction	�	(Commission	�	(I.R.S. Employer
Of Incorporation)	�	File Number)	�	Identification No.)

�

1007 Market Street

Wilmington, Delaware 19898

(Address of principal executive offices)

�

Registrants telephone number, including area code:�� (302) 774-1000

�

Check the appropriate box below if the Form�8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

o�� Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)

�

o�� Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

o�� Pre-commencement communications pursuant to Rule�14d-2(b)�under the Exchange Act (17 CFR 240.14d-2(b))

�

o�� Pre-commencement communications pursuant to Rule�13e-4(c)�under the Exchange Act (17 CFR 240.13e-4(c))

�

Item 2.02 ��Results of Operations and Financial Condition

On October 28, 2014, the Registrant announced its consolidated financial results for the quarter ended September 30, 2014. A copy of the Registrants earnings news release is furnished on Form 8-K. The information contained in Item 2.02, including Exhibit 99.1, of this report on Form 8-K shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of that section, and it will not be incorporated by reference into any registration statement or other document filed by the Registrant under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.

Item 9.01 ��Financial Statements and Exhibits

(d) Exhibits:

99.1 ��Press Release dated October 28, 2014

SIGNATURE

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�



�	E. I. DU PONT DE NEMOURS AND COMPANY
�	(Registrant)
�	�
�	�
�	/s/ Barry J. Niziolek
�	Barry J. Niziolek
�	Vice President and Controller

�

October 28, 2014



�	�	�	�	�	Exhibit 99.1
	�	�	�	�
�	�	�	�	�	�
October 28, 2014	�	�	�	Media Contact:	Dan Turner
WILMINGTON, Del.	�	�	�	�	302-774-4005
�	�	�	�	�	[email protected]
�	�	�	�	Investor Contact:	302-774-4994

DuPont Reports 3Q Operating Earnings Per Share of $0.54; Up 20 Percent from Last Year

Third Quarter Highlights


"	Operating earnings per share of $0.54 were up 20 percent from $0.45 per share last year, in-line with the companys expectations communicated with 2Q earnings. GAAP¹ earnings per share were $0.47 versus $0.28 last year.


"	Sales were $7.5 billion versus $7.7 billion in the same period last year, down 3 percent due to portfolio changes.


"	Volume grew across most segments with decline limited to Agriculture, where higher crop protection volume was more than offset by lower seed volume.


"	Strong operating earnings growth was delivered by Nutrition & Health (+23 percent) and Safety & Protection (+18 percent)


"	The Performance Chemicals separation remains on track for mid-2015.

WILMINGTON, Del., October 28, 2014 - Today DuPont (NYSE: DD) announced third quarter 2014 operating earnings of $0.54 per share compared to $0.45 per share in the prior year. GAAP¹ earnings per share were $0.47 versus $0.28 last year. Consolidated sales were $7.5 billion, 3 percent below last year, reflecting portfolio changes, as price, volume and currency were in line with the prior year period.

"In the third quarter, we improved our operating margins in five of seven segments and grew operating earnings per share 20 percent, despite a weaker Ag environment and sluggish economic growth in most of the world," said DuPont Chair and CEO Ellen Kullman. "Our increase in margins in a slow growth environment reflects the momentum we are building as we execute our plan, which is driving new products, portfolio enhancements and a broad initiative to redesign our operating model with a smaller cost base and a simplified support structure. We are positioning DuPont for our next stage of growth, while increasing returns to our shareholders."

¹Generally Accepted Accounting Principles (GAAP)

E.I. du Pont de Nemours and Company

Global Consolidated Net Sales - 3rd Quarter

Third quarter 2014 net sales of $7.5 billion were 3 percent below last year due to portfolio changes. Increased volumes were offset by a decrease in local selling prices. The table below shows third quarter regional sales and variances versus third quarter 2013.

�

Three Months Ended

�

September 30, 2014

Percentage Change Due to:

(Dollars in millions)

�

% Change

�

Local Price

�

Currency Effect

�

Volume

�

Portfolio/ Other

U.S. & Canada

�

2,415

�

)

�

)

�

)

EMEA*

�

1,740

�

)

�

)

�

)

Asia Pacific

�

1,955

�

)

Latin America

�

1,401

�

)

�

)

�

)

�

)

�

Total Consolidated Sales

�

7,511

�

)

�

)

�

)

�

* Europe, Middle East & Africa

�

Segment Sales - 3rd Quarter

The table below shows third quarter 2014 segment sales with related variances versus the third quarter 2013.

�

Three Months Ended

�

Percentage Change

�

September 30, 2014

Due to:

(Dollars in millions)

�

% Change

�

USD Price

�

Volume

�

Portfolio/Other

Agriculture

�

1,563

�

)

�

)

�

)

�

Electronics & Communications

�

623

�

)

�

)

�

Industrial Biosciences

�

318

�

Nutrition & Health

�

899

�

Performance Chemicals

�

1,646

�

)

�

)

�

)

Performance Materials

�

1,552

�

)

�

)

Safety & Protection

�

977

�

)

�

)

Other

�

Total segment sales

�

7,580

�

Elimination of transfers

�

(69

)

�

Consolidated net sales

�

7,511

�

Operating Earnings - 3rd Quarter

�

�Change vs. 2013

(Dollars in millions)

�

3Q14

�

3Q13

�

Agriculture

�

(55

)

�

(62

)

�

�%

Electronics & Communications

�

)

�

-3

�%

Industrial Biosciences

�

�%

Nutrition & Health

�

100

�

�%

Performance Chemicals ⁽¹⁾

�

249

�

261

�

(12

)

�

-5

�%

Performance Materials ⁽¹⁾

�

370

�

367

�

�%

Safety & Protection

�

201

�

171

�

�%

Other

�

(83

)

�

(107

)

�

�%

Total segment operating earnings^�(2)

�

923

�

853

�

�%

�

Exchange gains and losses ⁽³⁾

�

218

�

(101

)

�

319

�

Corporate expenses

�

(171

)

�

(162

)

�

)

�

Interest expense

�

(93

)

�

(108

)

�

Operating earnings before income taxes

�

877

�

482

�

395

�

�%

�

Provision for income taxes on operating earnings

�

(379

)

�

(53

)

�

(326

)

�

Net income attributable to noncontrolling interests

�

)

�

Operating earnings

�

497

�

426

�

�%

�

Operating earnings per share

�

0.54

�

0.45

�

0.09

�

�%

�

⁽¹⁾�Prior period reflects the reclassifications of the Viton^�fluoroelastomer product line from Performance Materials to Performance Chemicals.

⁽²⁾��See Schedules B and C for listing of significant items and their impact by segment.

⁽³⁾�See Schedule D for additional information on exchange gains and losses.

��

The following is a summary of business results for each of the companys reportable segments in the third quarter, which compares the current period with the prior year. References to selling price are on a U.S. dollar basis, including the impact of currency.

Agriculture - A seasonal operating loss of $55 million improved $7 million, or 11 percent, due primarily to lower seed input costs and operating cost improvements, partially offset by lower sales and the absence of the prior year $26 million gain from the acquisition of a controlling interest in Pannar. Increases in insecticide and fungicide volumes, mainly in Latin America, were more than offset by lower corn seed and herbicide volumes and lower corn seed price.

Electronics & Communications - Operating earnings of $94 million decreased $3 million, or 3 percent, due to competitive pressures impacting Solamet^�paste, and a decrease in other income, partially offset by stronger volume and productivity gains.

Industrial Biosciences - Operating earnings of $47 million increased $2 million, or 4 percent, from increased enzyme demand principally for ethanol production, partially offset by higher product costs.

Nutrition & Health - Operating earnings of $100 million increased $19 million, or 23 percent, from volume growth, mix enrichment, productivity actions and lower raw material costs.

Performance Chemicals - Operating earnings of $249 million decreased $12 million, or 5 percent, due primarily to lower prices and portfolio changes, partially offset by productivity improvements.

Performance Materials - Operating earnings of $370 million increased $3 million. Increased ethylene and polymer volumes were partially offset by the impact of portfolio changes, principally the Glass Laminating/Vinyls sale. A prior year $30 million benefit from a joint venture was partially offset by a $23 million gain on sale of a majority interest in a joint venture during the third quarter 2014.

Safety & Protection - Operating earnings of $201 million increased $30 million, or 18 percent, primarily due to lower product costs and productivity improvements, resulting in over a 300 basis point increase in operating margins.

Outlook

For the fourth quarter, the company expects sluggish growth in the global economy, along with continuing headwinds in agriculture and from currency. However, the company remains confident in its ability to create higher value from its portfolio while continuing to deliver against cost productivity and corporate initiatives. Overall, the company expects fourth quarter operating earnings per share to grow about 20 percent from last year's $0.59 per share, matching the growth rate the company achieved in the third quarter, and bringing full year 2014 operating earnings within its previously communicated outlook range of $4.00 - $4.10 per share.

��

DuPont will hold a conference call and webcast on Tuesday, October 28, 2014, at 9:00 AM EDT to discuss this news release. The webcast and additional presentation materials can be accessed by visiting the companys investor website (Events & Presentations) at www.investors.dupont.com. A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 38251527#. For additional information see the investor center at http://www.dupont.com.

Use of Non-GAAP Measures

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

About DuPont

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

Forward-Looking Statements: This document contains forward-looking statements which may be identified by their use of words like plans, expects, will, believes, intends, estimates, anticipates or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the companys strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the companys control. Some of the important factors that could cause the companys actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; ability to protect and enforce the company's intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses and successful completion of the proposed spinoff of the Performance Chemicals segment including ability to fully realize the expected benefits of the proposed spinoff. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

# # #

10/28/14

E.I. du Pont de Nemours and Company

Consolidated Income Statements

(Dollars in millions, except per share amounts)

SCHEDULE A

�

Three Months Ended

September 30,

�

Nine Months Ended

September 30,

�

2014

�

2013

�

2014

�

2013

Net sales

7,511

�

7,735

�

27,345

�

27,987

Other income, net ^(a)

357

�

782

�

321

Total

7,868

�

7,805

�

28,127

�

28,308

�

Cost of goods sold

4,880

�

5,166

�

16,879

�

17,415

Other operating charges^�(a)

839

�

989

�

2,461

�

2,843

Selling, general and administrative expenses

756

�

774

�

2,629

�

2,740

Research and development expense

514

�

540

�

1,577

�

1,603

Interest expense

�

108

�

290

�

340

Employee separation / asset related charges, net ^(a)

�

263

�

Total

7,082

�

7,577

�

24,099

�

24,941

�

Income from continuing operations before income taxes

786

�

228

�

4,028

�

3,367

Provision for (benefit from) income taxes on continuing operations ^(a)

352

�

(35

)

�

1,075

�

687

Income from continuing operations after income taxes

434

�

263

�

2,953

�

2,680

Income from discontinued operations after taxes

�

1,997

�

Net income

434

�

288

�

2,953

�

4,677

�

Less: Net income attributable to noncontrolling interests

�

Net income attributable to DuPont

433

�

285

�

2,942

�

4,663

�

Basic earnings per share of common stock ^(b):

�

Basic earnings per share of common stock from continuing operations

0.47

�

0.28

�

3.20

�

2.87

Basic earnings per share of common stock from discontinued operations

�

0.03

�

2.16

Basic earnings per share of common stock

0.47

�

0.30

�

3.20

�

5.03

�

Diluted earnings per share of common stock ^(b):

�

Diluted earnings per share of common stock from continuing operations

0.47

�

0.28

�

3.17

�

2.85

Diluted earnings per share of common stock from discontinued operations

�

0.03

�

2.14

Diluted earnings per share of common stock

0.47

�

0.30

�

3.17

�

4.99

�

Dividends per share of common stock

0.47

�

0.45

�

1.37

�

1.33

Average number of shares outstanding used in earnings per share (EPS) calculation:

�

��Basic

910,764,000

�

925,645,000

�

917,589,000

�

925,548,000

��Diluted

917,761,000

�

933,005,000

�

924,646,000

�

932,542,000

�

^(a)See Schedule B for detail of significant items.

�

^(b)�The sum of the individual earnings per share amounts may not equal the total due to rounding.

�



Reconciliation of Non-GAAP Measures	�			�	�			�	�		�	�			�	�			�	�
Summary of Earnings Comparison	�			�	�			�	�		�	�			�	�			�	�
�	Three Months Ended September 30,										�	Nine Months Ended September 30,
�	2014			�	2013			�	% Change		�	2014			�	2013			�	% Change
Income from continuing operations after income taxes (GAAP)	$	434		�	$	263		�	65	%	�	$	2,953		�	$	2,680		�	10	�%
Less: Significant items charge included in income from continuing ��operations after income taxes (per Schedule B)	(44		)	�	(71		)	�	�		�	(48		)	�	(129		)	�	�
Non-operating pension/OPEB costs included in income from continuing ��operations after income taxes	(20		)	�	(95		)	�	�		�	(64		)	�	(279		)	�	�
Net income attributable to noncontrolling interest	1			�	3			�	�		�	11			�	14			�	�
Operating earnings	$	497		�	$	426		�	17	%	�	$	3,054		�	$	3,074		�	(1	)%
�	�			�	�			�	�		�	�			�	�			�	�
EPS from continuing operations (GAAP)	$	0.47		�	$	0.28		�	68	%	�	$	3.17		�	$	2.85		�	11	�%
Significant items charge included in EPS (per Schedule B)	(0.05		)	�	(0.08		)	�	�		�	(0.05		)	�	(0.14		)	�	�
Non-operating pension/OPEB costs included in EPS	(0.02		)	�	(0.09		)	�	�		�	(0.07		)	�	(0.30		)	�	�
Operating EPS	$	0.54		�	$	0.45		�	20	%	�	$	3.29		�	$	3.29		�		�%

E.I. du Pont de Nemours and Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share amounts)



SCHEDULE A (continued)	�	�
�	�	September 30, 2014			�	December 31, 2013
Assets	�	�			�	�
Current assets	�	�			�	�
Cash and cash equivalents	�	$	3,982		�	$	8,941
Marketable securities	�	566			�	145
Accounts and notes receivable, net	�	8,347			�	6,047
Inventories	�	7,295			�	8,042
Prepaid expenses	�	239			�	206
Deferred income taxes	�	739			�	775
Assets held for sale	�				�	228
Total current assets	�	21,168			�	24,384
Property, plant and equipment, net of accumulated depreciation ��(September 30, 2014- $19,765; December 31, 2013 - $19,438)	�	13,114			�	12,993
Goodwill	�	4,602			�	4,713
Other intangible assets	�	4,730			�	5,096
Investment in affiliates	�	998			�	1,011
Deferred income taxes	�	2,263			�	2,353
Other assets	�	1,036			�	949
Total	�	$	47,911		�	$	51,499
�	�	�			�	�
Liabilities and Equity	�	�			�	�
Current liabilities	�	�			�	�
Accounts payable	�	$	3,757		�	$	5,180
Short-term borrowings and capital lease obligations	�	3,889			�	1,721
Income taxes	�	528			�	247
Other accrued liabilities	�	3,963			�	6,219
Total current liabilities	�	12,137			�	13,367
Long-term borrowings and capital lease obligations	�	9,279			�	10,741
Other liabilities	�	9,636			�	10,179
Deferred income taxes	�	877			�	926
Total liabilities	�	31,929			�	35,213
�	�	�			�	�
Commitments and contingent liabilities	�	�			�	�
�	�	�			�	�
Stockholders' equity	�	�			�	�
Preferred stock	�	237			�	237
Common stock, $0.30 par value; 1,800,000,000 shares authorized; ��Issued at September 30, 2014 - 992,865,000; December 31, 2013 - 1,014,027,000	�	298			�	304
Additional paid-in capital	�	10,991			�	11,072
Reinvested earnings	�	16,913			�	16,784
Accumulated other comprehensive loss	�	(5,789		)	�	(5,441		)
Common stock held in treasury, at cost (87,041,000 shares at September 30, 2014 and December 31, 2013)	�	(6,727		)	�	(6,727		)
Total DuPont stockholders' equity	�	15,923			�	16,229
Noncontrolling interests	�	59			�	57
Total equity	�	15,982			�	16,286
Total	�	$	47,911		�	$	51,499

E.I. du Pont de Nemours and Company

Condensed Consolidated Statement of Cash Flows

(Dollars in millions)



SCHEDULE A (continued)	�
�	Nine Months Ended September 30,
�	2014			�	2013
Total Company	�			�	�
Net income	$	2,953		�	$	4,677
Adjustments to reconcile net income to cash used for operating activities:	�			�	�
Depreciation	944			�	961
Amortization of intangible assets	294			�	255
Other operating charges and credits - net	563			�	447
Gain on sales of businesses	(418		)	�	(2,689		)
Contributions to pension plans	(231		)	�	(246		)
Change in operating assets and liabilities - net	(5,907		)	�	(5,738		)
Cash used for operating activities	(1,802		)	�	(2,333		)
�	�			�	�
Investing activities	�			�	�
Purchases of property, plant and equipment	(1,311		)	�	(1,223		)
Investments in affiliates	(37		)	�	(43		)
Payments for businesses - net of cash acquired				�	(133		)
Proceeds from sales of businesses - net	727			�	4,816
Proceeds from sales of assets - net	29			�	126
Net increase in short-term financial instruments	(422		)	�	(78		)
Forward exchange contract settlements	97			�	82
Other investing activities - net	197			�	31
Cash (used for) provided by investing activities	(720		)	�	3,578
�	�			�	�
Financing activities	�			�	�
Dividends paid to stockholders	(1,268		)	�	(1,242		)
Net increase in borrowings	749			�	3,204
Prepayments / repurchase of common stock	(2,000		)	�	(1,000		)
Proceeds from exercise of stock options	285			�	497
Other financing activities - net	1			�	3
Cash (used for) provided by financing activities	(2,233		)	�	1,462
�	�			�	�
Effect of exchange rate changes on cash	(204		)	�	(81		)
�	�			�	�
(Decrease) increase in cash and cash equivalents	(4,959		)	�	2,626
�	�			�	�
Cash and cash equivalents at beginning of period	8,941			�	4,379
�	�			�	�
Cash and cash equivalents at end of period	$	3,982		�	$	7,005
�	�			�	�
Reconciliation of Non-GAAP Measure	�			�	�
Calculation of Free Cash Flow - Total Company	�			�	�
�	Nine Months Ended September 30,
�	2014			�	2013
Cash used for operating activities	$	(1,802	)	�	$	(2,333	)
Purchases of property, plant and equipment	(1,311		)	�	(1,223		)
Free cash flow	$	(3,113	)	�	$	(3,556	)

E.I. du Pont de Nemours and Company

Schedule of Significant Items from Continuing Operations

(Dollars in millions, except per share amounts)

SCHEDULE B

�

SIGNIFICANT ITEMS FROM CONTINUING OPERATIONS

�

Pre-tax

�

After-tax

�

($ Per Share)

�

2014

�

2013

�

2014

�

2013

�

2014

�

2013

1st Quarter

�

Separation transaction costs ^(a)

(16

)

�

(12

)

�

(0.01

)

�

Customer claims charge ^(e)

�

(35

)

�

(22

)

�

(0.02

)

Income tax items^�(f)

�

0.04

1st Quarter - Total

(16

)

�

(35

)

�

(12

)

�

(0.01

)

�

0.02

�

2nd Quarter

�

Separation transaction costs ^(a)

(35

)

�

(26

)

�

(0.03

)

�

Gain on sale of business^�(b)

391

�

273

�

0.30

�

Restructuring charge^�(c)

(263

)

�

(182

)

�

(0.20

)

�

Venezuela devaluation ^(d)

(58

)

�

(57

)

�

(0.06

)

�

Customer claims charge ^(e)

�

(80

)

�

(51

)

�

(0.05

)

Income tax items^�(g)

�

(11

)

�

(27

)

�

(0.03

)

2nd Quarter - Total

�

(91

)

�

(78

)

�

0.01

�

(0.08

)

�

3rd Quarter

�

Separation transaction costs ^(a)

(61

)

�

(44

)

�

(0.05

)

�

Customer claims charge ^(e)

�

(40

)

�

(24

)

�

(0.03

)

Litigation settlement ^(h)

�

(72

)

�

(47

)

�

(0.05

)

3rd Quarter - Total

(61

)

�

(112

)

�

(44

)

�

(71

)

�

(0.05

)

�

(0.08

)

�

Year-to-date Total

(42

)

�

(238

)

�

(48

)

�

(129

)

�

(0.05

)

�

(0.14

)

�

(a)

Third, second and first quarter 2014 included a charge of $(61), $(35) and $(16), respectively, recorded in other operating charges associated with transaction costs related to the separation of the Performance Chemicals segment. For full-year 2014, costs associated with the separation are expected to be approximately $(210), $(0.16) per share.

�

(b)

Second quarter 2014 included a gain of $391 recorded in other income, net associated with the sale of Glass Laminating Solutions/Vinyls in the Performance Materials segment.

�

(c)

Second quarter 2014 included a $(263) restructuring charge recorded in employee separation/asset related charges, net, consisting of $(166) of severance and related benefit costs, $(94) of asset shut downs, and $(3) of other non-personnel charges as a result of the company's plan to to reduce residual costs associated with the separation of the Performance Chemicals segment and to improve productivity across all businesses and functions. Pre-tax charges by segment are: Agriculture - $(47), Electronics & Communications - $(68), Industrial Biosciences - $(2), Nutrition & Health - $(8), Performance Chemicals - $(19), Performance Materials - $(29), Safety & Protection - $(31), Other - $(2), and Corporate expenses - $(57).

�

(d)

Second quarter 2014 included a charge of $(58) recorded in other income, net associated with remeasuring the company's Venezuelan net monetary assets from the official exchange rate to the SICAD II exchange system.

�

(e)

Third, second and first quarter 2013 included charges of $(40), $(80) and $(35), respectively, recorded in other operating charges associated with resolving claims related to the use of the Imprelis� herbicide. The company has an applicable insurance program with a deductible equal to the first $100 of costs and expenses. The insurance program limits are $725 for costs and expenses in excess of the $100. The company has submitted and will continue to submit requests for payment to its insurance carriers for costs associated with this matter. To date, the company has recognized and received $73 of insurance recoveries from its insurance carriers and continues to seek recovery although the timing and outcome remain uncertain. The company had accruals of $312 related to these claims at September 30, 2014. These charges relate to the Agriculture segment.

�

(f)

First quarter 2013 included a net tax benefit of $42 consisting of a $68 benefit for the 2013 extension of certain U.S business tax provisions offset by a ($26) charge related to the global distribution of Performance Coatings cash proceeds.

�

(g)

Second quarter 2013 includes a charge of $(11) in other income, net related to interest on a prior year tax position. Second quarter 2013 also includes a charge of $(49) associated with a change in accrual for a prior year tax position offset by a $33 benefit for an enacted tax law change.

�

(h)

Third quarter 2013 included a charge of $(72) recorded in other operating charges related to the company's settlement of titanium dioxide antitrust litigation. This matter relates to the Performance Chemicals segment.

E.I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)



SCHEDULE C	�			�	�			�	�			�	�
�	Three Months Ended September 30,							�	Nine Months Ended September 30,
SEGMENT SALES^�(1)	2014			�	2013			�	2014			�	2013
Agriculture	$	1,563		�	$	1,633		�	$	9,572		�	$	9,933
Electronics & Communications	623			�	638			�	1,820			�	1,907
Industrial Biosciences	318			�	305			�	936			�	898
Nutrition & Health	899			�	868			�	2,686			�	2,601
Performance Chemicals ⁽²⁾	1,646			�	1,781			�	4,933			�	5,261
Performance Materials ⁽²⁾	1,552			�	1,602			�	4,668			�	4,718
Safety & Protection	977			�	985			�	2,953			�	2,909
Other	2			�	1			�	4			�	5
Total Segment sales	7,580			�	7,813			�	27,572			�	28,232
�	�			�	�			�	�			�	�
Elimination of transfers	(69		)	�	(78		)	�	(227		)	�	(245		)
Consolidated net sales	$	7,511		�	$	7,735		�	$	27,345		�	$	27,987
�	�			�	�			�	�			�	�
⁽¹⁾�Segment sales include transfers.
⁽²⁾�Prior periods reflect the reclassifications of the Viton^�product line from Performance Materials to Performance ��Chemicals.

E.I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)



SCHEDULE C (continued)	�	�			�	�			�	�
�	�	Three Months Ended September 30,							�	Nine Months Ended September 30,
INCOME FROM CONTINUING OPERATIONS (GAAP)		2014			�	2013			�	2014			�	2013
Agriculture	�	$	(55	)	�	$	(102	)	�	$	2,176		�	$	2,240
Electronics & Communications	�	94			�	97			�	190			�	241
Industrial Biosciences	�	47			�	45			�	160			�	129
Nutrition & Health	�	100			�	81			�	290			�	218
Performance Chemicals^�(3)	�	249			�	189			�	687			�	713
Performance Materials ⁽³⁾	�	370			�	367			�	1,328			�	986
Safety & Protection	�	201			�	171			�	554			�	481
Other	�	(83		)	�	(107		)	�	(259		)	�	(249		)
Total Segment PTOI	�	923			�	741			�	5,126			�	4,759
�	�	�			�	�			�	�			�	�
Corporate expenses	�	(232		)	�	(162		)	�	(727		)	�	(582		)
Interest expense	�	(93		)	�	(108		)	�	(290		)	�	(340		)
Non-operating pension/OPEB costs	�	(30		)	�	(142		)	�	(94		)	�	(415		)
Net exchange gains (losses) ⁽¹⁾	�	218			�	(101		)	�	13			�	(55		)
Income before income taxes from continuing operations	�	$	786		�	$	228		�	$	4,028		�	$	3,367
�	�	�			�	�			�	�			�	�
�	�	Three Months Ended September 30,							�	Nine Months Ended September 30,
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) ⁽²⁾	�	2014			�	2013			�	2014			�	2013
Agriculture	�	$			�	$	(40	)	�	$	(47	)	�	$	(155	)
Electronics & Communications	�				�				�	(68		)	�
Industrial Biosciences	�				�				�	(2		)	�
Nutrition & Health	�				�				�	(8		)	�
Performance Chemicals ⁽³⁾	�				�	(72		)	�	(19		)	�	(72		)
Performance Materials ⁽³⁾	�				�				�	362			�
Safety & Protection	�				�				�	(31		)	�
Other	�				�				�	(2		)	�
Total significant items by segment	�				�	(112		)	�	185			�	(227		)
Corporate expenses	�	(61		)	�				�	(169		)	�	(11		)
Net exchange gains (losses) ⁽¹⁾	�				�				�	(58		)	�
Total significant items before income taxes	�	$	(61	)	�	$	(112	)	�	$	(42	)	�	$	(238	)
�	�	�			�	�			�	�			�	�
�	�	Three Months Ended September 30,							�	Nine Months Ended September 30,
OPERATING EARNINGS	�	2014			�	2013			�	2014			�	2013
Agriculture	�	$	(55	)	�	$	(62	)	�	$	2,223		�	$	2,395
Electronics & Communications	�	94			�	97			�	258			�	241
Industrial Biosciences	�	47			�	45			�	162			�	129
Nutrition & Health	�	100			�	81			�	298			�	218
Performance Chemicals ⁽³⁾	�	249			�	261			�	706			�	785
Performance Materials ⁽³⁾	�	370			�	367			�	966			�	986
Safety & Protection	�	201			�	171			�	585			�	481
Other	�	(83		)	�	(107		)	�	(257		)	�	(249		)
Total segment operating earnings	�	923			�	853			�	4,941			�	4,986
Corporate expenses	�	(171		)	�	(162		)	�	(558		)	�	(571		)
Interest expense	�	(93		)	�	(108		)	�	(290		)	�	(340		)
Operating earnings before income taxes and exchange gains (losses)	�	659			�	583			�	4,093			�	4,075
Net exchange gains (losses) ⁽¹⁾	�	218			�	(101		)	�	71			�	(55		)
Operating earnings before income taxes	�	$	877		�	$	482		�	$	4,164		�	$	4,020
�	�	�			�	�			�	�			�	�
⁽¹⁾��See Schedule D for additional information on exchange gains and losses.
⁽²⁾�See Schedule B for detail of significant items.
⁽³⁾��Prior periods reflect the reclassifications of the Viton^��product line from Performance Materials to Performance Chemicals.

E.I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SCHEDULE D

�

Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements

�

Three Months Ended

September 30,

�

Nine Months Ended

September 30,

�

2014

�

2013

�

2014

�

2013

Income from continuing operations before income taxes

�

786

�

228

�

4,028

�

3,367

Add: Significant items before income taxes

�

112

�

238

Add: Non-operating pension/OPEB costs

�

142

�

415

Operating earnings before income taxes

�

877

�

482

�

4,164

�

4,020

Less: Net income attributable to noncontrolling interests

�

Add: Interest expense

�

108

�

290

�

340

Adjusted EBIT from operating earnings

�

969

�

587

�

4,443

�

4,346

Add: Depreciation and amortization

�

358

�

379

�

1,238

�

1,216

Adjusted EBITDA from operating earnings

�

1,327

�

966

�

5,681

�

5,562

�

Reconciliation of Operating Earnings Per Share (EPS) Outlook

The reconciliation below represents the company's outlook on an operating earnings basis, defined as earnings from continuing operations excluding significant items and non-operating pension/OPEB costs.

�

Year Ended December 31,

�

2014 Outlook

�

2013 Actual

�

Operating EPS

�

$4.00 - $4.10

�

3.88

�

Significant items

�

Separation transaction costs

�

(0.16

)

�

Gain on sale of business

�

0.30

�

Restructuring charge

�

(0.20

)

�

Venezuela devaluation

�

(0.06

)

�

Tax items

�

0.02

�

Customer claims charges

�

(0.24

)

�

Restructuring charge/adjustments

�

Litigation settlement

�

(0.05

)

�

Asset impairment charge

�

(0.18

)

�

Non-operating pension/OPEB costs - estimate

�

(0.10

)

�

(0.39

)

�

EPS from continuing operations (GAAP)

�

$3.78 - $3.88

�

3.04

�

2014 Operating EPS excludes the potential gain on sale of the Kocide^��and Mankocide^�^�copper fungicide business assets.

E.I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SCHEDULE D (continued)

�

Exchange Gains/Losses on Operating Earnings⁽²⁾

�

The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other income, net and the related tax impact is recorded in provision for (benefit from) income taxes on the Consolidated Income Statements.

�

Three Months Ended

September 30,

�

Nine Months Ended

September 30,

�

2014

�

2013

�

2014

�

2013

Subsidiary/Affiliate Monetary Position Gain (Loss)

�

Pre-tax exchange (losses) gains (includes equity affiliates)

�

(185

)

�

(216

)

�

(121

)

Local tax (expenses) benefits

�

(116

)

�

(132

)

�

Net after-tax impact from subsidiary exchange (losses) gains

�

(301

)

�

(348

)

�

(89

)

�

Hedging Program Gain (Loss)

�

Pre-tax exchange gains (losses)

�

403

�

(130

)

�

287

�

Tax (expenses) benefits

�

(141

)

�

(100

)

�

(24

)

Net after-tax impact from hedging program exchange gains (losses)

�

262

�

(85

)

�

187

�

Total Exchange Gain (Loss)

�

Pre-tax exchange gains (losses)

�

218

�

(101

)

�

(55

)

Tax (expenses) benefits

�

(257

)

�

(232

)

�

Net after-tax exchange losses ⁽¹⁾

�

(39

)

�

(43

)

�

(161

)

�

(47

)

�

As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary/Affiliate Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)."

�

⁽¹⁾�The above Net after-tax exchange losses excludes losses attributable to discontinued operations of $(5) for the nine months ended September 30, 2013.

�

⁽²⁾�See Schedule B for detail of significant items

�

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate

Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), as defined above, significant items and non-operating pension/OPEB costs.

�

Three Months Ended

September 30,

�

Nine Months Ended

September 30,

�

2014

�

2013

�

2014

�

2013

Income from continuing operations before income taxes

�

786

�

228

�

4,028

�

3,367

Add: Significant items - charge ⁽²⁾

�

112

�

238

��Non-operating pension/OPEB costs

�

142

�

415

Less: Net exchange gains (losses)

�

218

�

(101

)

�

(55

)

Income from continuing operations before income taxes, significant items,

�

��exchange gains (losses), and non-operating pension/OPEB costs

�

659

�

583

�

4,093

�

4,075

�

Provision for (benefit from) income taxes on continuing operations

�

352

�

(35

)

�

1,075

�

687

Add: Tax benefits (expenses) on significant items

�

)

�

109

��Tax benefits (expenses) on non-operating pension/OPEB costs

�

136

��Tax (expenses) benefits on exchange gains/losses

(257

)

�

(232

)

�

Provision for income taxes on operating earnings, excluding exchange gains (losses)

122

�

111

�

867

�

940

�

Effective income tax rate

�

44.8

�%

�

(15.4

�

26.7

�%

�

20.4

�%

Significant items effect and non-operating pension/OPEB costs effect

�

(1.6

�

26.4

�%

�

(0.3

�

2.8

�%

Tax rate, from continuing operations, before significant items and non-operating pension/OPEB costs

43.2

�%

�

11.0

�%

�

26.4

�%

�

23.2

�%

Exchange gains (losses) effect

�

(24.7

�

8.0

�%

�

(5.2

�

(0.1

Base income tax rate from continuing operations

�

18.5

�%

�

19.0

�%

�

21.2

�%

�

23.1

�%

�

⁽²⁾�See Schedule B for detail of significant items.

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