DuPont 2015 Annual Report Download - page 74

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-15
In February 2015, the FASB issued ASU No. 2015-02 Consolidation (Topic 810), Amendments to the Consolidation Analysis.
The amendments under the new guidance modify the evaluation of whether limited partnerships and similar legal entities are VIEs
or voting interest entities and eliminate the presumption that a general partner should consolidate a limited partnership. The ASU
is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December
15, 2015. Early adoption is permitted, including adoption in an interim period. A reporting entity also may apply the amendments
retrospectively. The company does not expect this guidance to have a material impact on its financial position or results of
operations.
In May 2014, the FASB and the International Accounting Standards Board (IASB) jointly issued ASU No. 2014-9, Revenue from
Contracts with Customers (Topic 606), which clarifies the principles for recognizing revenue and develops a common revenue
standard for GAAP and International Financial Reporting Standards (IFRS). The core principle of the guidance is that an entity
should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB approved
a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim
periods beginning after December 15, 2017. The company is currently evaluating the impact of adopting this guidance on its
financial position and results of operations.
2. PROPOSED MERGER WITH DOW CHEMICAL
On December 11, 2015, DuPont and The Dow Chemical Company (Dow) announced entry into an Agreement and Plan of Merger
(the Merger Agreement), under which the companies will combine in an all-stock merger of equals. The companies anticipate
that the merger will close and become effective (the Effective Time), in the second half of 2016 and at that time the combined
company will be named DowDuPont. Following the consummation of the merger, DuPont and Dow intend to pursue, subject to
the receipt of approval by the board of directors of DowDuPont, the separation of the combined company’s agriculture business,
specialty products business and material science business through a series of one or more tax-efficient transactions (collectively,
the Business Separations.)
Subject to the terms and conditions of the Merger Agreement, each share of common stock, par value $0.30 per share, of DuPont
(DuPont Common Stock) issued and outstanding immediately prior to the Effective Time, excluding any shares of DuPont Common
Stock that are held in treasury, will be converted into the right to receive 1.2820 shares common stock, par value $0.01 per share,
of DowDuPont (DowDuPont Common Stock), for each share of DuPont Common Stock with cash in lieu of any fractional share
of DowDuPont. Each share of DuPont Preferred Stock-$4.50 Series and DuPont Preferred Stock-$3.50 Series, in each case issued
and outstanding immediately prior to the Effective Time, shall remain issued and outstanding and be unaffected by the merger.
Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, each share of common stock, par
value $2.50 per share, of Dow (the Dow Common Stock) issued and outstanding immediately prior to the Effective Time, excluding
any shares of Dow Common Stock that are held in treasury, will be converted into the right to receive one share of DowDuPont
Common Stock and each share of Cumulative Convertible Perpetual Preferred Stock, Series A, par value $1.00 per share, of Dow
(the Dow Preferred) issued and outstanding immediately prior to the Effective Time will be automatically canceled and each holder
of shares of Dow Preferred will be deemed to hold the same number of shares of preferred stock of DowDuPont on equivalent
terms.
The aforementioned 1.2820 exchange ratio set forth in the Merger Agreement is expected to result in DuPont common stockholders
and Dow common stockholders each owning approximately 50% of the outstanding shares of DowDuPont Common Stock
following the Effective Time.