DuPont 2014 Annual Report Download - page 22

Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
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(Dollars in millions) 2014 2013 2012
OTHER INCOME, NET $ 1,323 $ 410 $ 498
2014 versus 2013 The $913 million increase was primarily due to $749 million of gains on sales of businesses and other assets,
including a $391 million gain on the sale of GLS/Vinyls which is recorded within the Performance Materials segment, and a $240
million gain on the sale of copper fungicides and land management businesses, both within the Agriculture segment. There were
additional net pre-tax exchange gains of $263 million, partially offset by $65 million for charges associated with the restructuring
actions of a joint venture within the Performance Materials segment and the absence of the $26 million re-measurement gain on
equity method investment in 2013. Net pre-tax exchange gains for the year ended December 31, 2014, includes $58 million, $46
million, and $14 million in exchange losses, associated with the devaluation of the Venezuelan bolivar, Ukrainian hryvnia, and
Argentinian peso, respectively. Net pre-tax exchange loss for the year ended December 31, 2013 includes $33 million exchange
losses associated with the devaluation of the Venezuela bolivar.
2013 versus 2012 The $88 million decrease was largely attributable to the absence of a $122 million gain related to the 2012
sale of the company's interest in an equity method investment, the absence of a $117 million gain related to the 2012 sale of a
business within the Agriculture segment, partially offset by $87 million lower net pre-tax exchange losses, $27 million increase
in interest income, and a $26 million re-measurement gain on an equity investment.
Additional information related to the company's other income, net is included in Note 4 to the Consolidated Financial Statements.
(Dollars in millions) 2014 2013 2012
COST OF GOODS SOLD $ 21,703 $ 22,547 $ 21,400
As a percent of net sales 63% 63% 61%
2014 versus 2013 Cost of goods sold (COGS) decreased 4 percent to $21.7 billion principally due to portfolio refinements and
a 1 percent decrease in product unit costs driven by lower metals and other raw material costs, partially offset with a 1 percent
increase in sales volume.
2013 versus 2012 COGS increased 5 percent to $22.5 billion, with 4 percent driven by higher sales volume and 1 percent driven
by higher product costs. COGS as a percentage of net sales was 63 percent, a 2 percent increase from 2012. The increase in COGS
as a percentage of net sales principally reflects the impact of increased costs for raw materials and agriculture inputs versus lower
selling prices, coupled with adverse currency impact.
(Dollars in millions) 2014 2013 2012
OTHER OPERATING CHARGES $ 1,067 $ 1,560 $ 1,856
As a percent of net sales 3% 4% 5%
The company’s cost structure has been impacted by the global, multi-year initiative to redesign its global organization and operating
model to improve productivity and agility across all businesses and functions. Effective December 31, 2014, in order to better
align to the transforming company’s organization and resulting cost structure, certain costs were reclassified from other operating
charges to selling, general and administrative expenses. Prior year data has been reclassified to conform to current year presentation.
2014 versus 2013 Other operating charges decreased $493 million percent to $1.1 billion, principally due to the absence of prior
year charges for Imprelis® herbicide claims and titanium dioxide antitrust litigation and an increase in insurance recoveries.
Decreases in other operating charges were partially offset with costs associated with the separation of the Performance Chemicals
segment of $175 million.