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2013
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
____________________________________________________________________________
Commission file number 1-815E. I. DU PONT DE NEMOURS AND COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization) 51-0014090
(I.R.S. Employer Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: 302-774-1000
Securities registered pursuant to Section 12(b) of the Act
(Each class is registered on the New York Stock Exchange, Inc.):
Title of Each Class
__________________________________________________
Common Stock ($.30 par value)
Preferred Stock
(without par value-cumulative)
$4.50 Series
$3.50 Series
No securities are registered pursuant to Section 12(g) of the Act.
_____________________________________________________
Indicate by check mark whether the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act).
Yes No
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ยง232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of voting stock held by nonaffiliates of the registrant (excludes outstanding shares beneficially owned
by directors and officers and treasury shares) as of June 30, 2013, was approximately $48.4 billion.
As of January 31, 2014, 927,717,000 shares (excludes 87,041,000 shares of treasury stock) of the company's common stock, $0.30
par value, were outstanding. Documents Incorporated by Reference
(Specific pages incorporated are indicated under the applicable Item herein):
Incorporated
By Reference
In Part No.
The company's Proxy Statement in connection with the Annual Meeting of Stockholders to be held on April 23, 2014. III

Table of contents

  • Page 1
    ... No.) 1007 Market Street Wilmington, Delaware 19898 (Address of principal executive offices) Registrant's telephone number, including area code: 302-774-1000 Securities registered pursuant to Section 12(b) of the Act (Each class is registered on the New York Stock Exchange, Inc.): Title...

  • Page 2
    ... Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative...

  • Page 3
    ... and effective use of insecticides, herbicides and fungicides. Agriculture accounted for approximately 50 percent of the company's total research and development expense in 2013. Sales of the company's products in this segment are affected by the seasonality of global agriculture markets and...

  • Page 4
    ... additional brand names. Pioneer promotes its products through multiple marketing channels around the world. In the corn and soybean markets of the U.S. Corn Belt, Pioneer® brand products are sold primarily through a specialized force of independent sales representatives. Outside of North America...

  • Page 5
    ... for the coatings, paper, plastics, specialties and minerals markets through service, brand and product. The business' main products include its broad line of DuPontTM Ti-Pure® titanium dioxide products. In 2011, the business announced a global expansion to support increased customer demand for...

  • Page 6
    ... products and services to a large number of markets, including construction, transportation, communications, industrial chemicals, oil and gas, electric utilities, automotive, manufacturing, defense, homeland security and safety consulting. Protection Technologies is focused on finding solutions...

  • Page 7
    ... to Pioneer is included in Item 1 Agriculture business discussion beginning on page 2 of this report.) Trade secrets are an important element of the company's intellectual property. Many of the processes used to make DuPont products are kept as trade secrets which, from time to time, may be licensed...

  • Page 8
    ... of facilities at our corporate headquarters in the Wilmington, Delaware area. In addition, DuPont has five major research centers in the Asia Pacific region, four major locations in the Europe, Middle East and Africa (EMEA) region and one major location is located in Latin America. The company...

  • Page 9
    ...condition, and cash flows. The company's business and operating results may in the future be adversely affected by global economic conditions, including instability in credit markets, declining consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates...

  • Page 10
    ... incur asset impairment charges related to acquisitions or divestitures that reduce its earnings. In October 2013, DuPont announced its intention to separate its Performance Chemicals segment through a U.S. tax-free spin-off to shareholders. The proposed spin-off is subject to various conditions...

  • Page 11
    ... manage safety, human health, product liability and environmental risks associated with the company's products, product life cycles and production processes could adversely impact employees, communities, stakeholders, the environment, the company's reputation and its results of operations. Public...

  • Page 12
    ...applicable segment(s) by major geographic area around the world is as follows: Number of Sites Agriculture Electronics & Communications Industrial Biosciences Nutrition & Health Performance Chemicals Performance Materials Safety & Protection Total 1 Asia Pacific EMEA Latin America U.S. & Canada 22...

  • Page 13
    ...CAA), Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and Emergency Planning and Community Right to Know Act (EPCRA). The alleged non-compliance relates to chemical releases between 2006 and 2010, including one release which involved the death of a DuPont employee after...

  • Page 14
    ... OF EQUITY SECURITIES Market for Registrant's Common Equity and Related Stockholder Matters The company's common stock is listed on the New York Stock Exchange, Inc. (symbol DD) and certain non-U.S. exchanges. The number of record holders of common stock was approximately 70,000 at January 31, 2014...

  • Page 15
    Part II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES, continued Stock Performance Graph The following graph presents the cumulative five-year total shareholder return for the company's common stock compared with the S&P 500 ...

  • Page 16
    ... per share) 2013 2012 2011 2010 2009 Summary of operations1 Net sales Employee separation / asset related charges, net Income from continuing operations before income taxes Provision for income taxes on continuing operations Net income attributable to DuPont Basic earnings per share of common stock...

  • Page 17
    ... those related to divested businesses; Failure to appropriately manage process safety and product stewardship issues; Effect of changes in tax, environmental and other laws and regulations or political conditions in the U.S. and other countries in which the company operates; Conditions in the global...

  • Page 18
    ... agreed to purchase certain subsidiaries and assets comprising the company's Performance Coatings business. In February 2013, the sale was completed resulting in a pre-tax gain of approximately $2.7 billion ($2.0 billion net of tax). The gain was recorded in income from discontinued operations after...

  • Page 19
    ... for the other segments combined, particularly Performance Chemicals. Higher local prices were driven principally by increases for seeds, titanium dioxide, and specialty polymers. Currency effect primarily reflects the weaker Euro and Brazilian Real. Sales in developing markets of $11.1 billion...

  • Page 20
    ...acquired companies. (Dollars in millions) 2013 2012 2011 RESEARCH AND DEVELOPMENT EXPENSE As a percent of net sales $ 2,153 $ 6% 2,123 $ 6% 1,960 6% 2013 versus 2012 The $30 million increase was primarily attributable to continued growth investments in the Agriculture segment and increases...

  • Page 21
    .... 2012 Restructuring Program In 2012, the company commenced a restructuring plan to increase productivity, enhance competitiveness and accelerate growth. The plan is designed to eliminate corporate costs previously allocated to the Performance Coatings business as well as utilize additional cost...

  • Page 22
    ...earnings, in addition to benefits associated with certain U.S. business tax provisions in 2013. In 2012, the company recorded a tax provision on continuing operations of $616 million, reflecting a marginal decrease from 2011. The increase in the 2012 effective tax rate compared to 2011 was primarily...

  • Page 23
    ... Statements for more information related to the Imprelis® matter. 2012 versus 2011 Pioneer seed sales reflect growth primarily in corn and soybean seeds. Volume increases in all regions reflect increased planted area. Global pricing gains reflect continued penetration of new genetics and trait...

  • Page 24
    ... in 2014 on volume gains largely offset by lower selling prices resulting from lower metals prices. Global installations of photovoltaic modules are expected to increase with mid-teen growth rates compared to 2013, driven by demand for solar energy in China, U.S., and developing markets. Sales into...

  • Page 25
    ... for carpeting. 2012 versus 2011 Sales were up primarily due to the Danisco enzyme business acquisition. Volume growth reflected strong sales of Sorona® polymer for carpeting, while lower price related to unfavorable currency impact. 2012 PTOI and PTOI margin increased reflecting benefits of the...

  • Page 26
    ... in North America. Higher local prices more than offset unfavorable currency impact. 2012 PTOI and PTOI margin increased reflecting benefits of the acquisition and the absence of a $112 million charge recorded in 2011 for transaction related costs and the fair value step-up of inventories acquired...

  • Page 27
    ... ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued PERFORMANCE MATERIALS (Dollars in millions) 2013 2012 2011 Segment sales PTOI PTOI margin $ $ 6,468 $ 1,281 $ 20% 2013 6,447 $ 1,121 $ 17% 2012 6,815 1,079 16% Change in segment sales from...

  • Page 28
    ...II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued SAFETY & PROTECTION (Dollars in millions) 2013 2012 2011 Segment sales PTOI PTOI margin $ $ 3,884 $ 694 $ 18% 2013 3,825 $ 562 $ 15% 2012 3,934 661 17% Change in segment sales from prior...

  • Page 29
    ... due to an increase in sales in the fourth quarter 2013 as well as an increase in customer credit sales in Latin America. In addition the Agriculture segment's working capital was negatively impacted in 2013 as a result of timing differences in when customer prepayments for the 2012 and 2013 growing...

  • Page 30
    ... 2012 of the company's Danisco acquisition in 2011. Purchases of property, plant and equipment totaled $1.9 billion in 2013 and $1.8 billion in 2012 and 2011. The company expects 2014 purchases of property, plant and equipment to be about the same as 2013. (Dollars in millions) 2013 2012 2011 Cash...

  • Page 31
    ... relating to the above share buyback plans. During 2011, the company purchased and retired 13.8 million shares at a total cost of $672 million, under the 2001 plan. (Dollars in millions) 2013 2012 2011 Cash provided by operating activities Purchases of property, plant and equipment Free cash flow...

  • Page 32
    ... table highlights the potential impact on the company's pre-tax earnings due to changes in certain key assumptions with respect to the company's pension and other long-term employee benefit plans, based on assets and liabilities at December 31, 2013: Pre-tax Earnings Benefit (Charge) (Dollars in...

  • Page 33
    ... income approach has been generally supported by additional market transaction analyses. There can be no assurance that the company's estimates and assumptions regarding forecasted cash flow and revenue and operating income growth rates made for purposes of the annual goodwill impairment test will...

  • Page 34
    ... Capital leases1 Operating leases Purchase obligations2 Information technology infrastructure & services Raw material obligations Utility obligations INVISTA-related obligations3 Human resource services Other Total purchase obligations Other liabilities1,4 Workers' compensation Asset retirement...

  • Page 35
    ... The company's other long-term employee benefits are unfunded and the cost of the approved claims is paid from operating cash flows. Pre-tax cash requirements to cover actual net claims costs and related administrative expenses were $207 million, $261 million and $312 million for 2013, 2012 and 2011...

  • Page 36
    ... 2014, long-term employee benefits expense from continuing operations is expected to decrease by about $440 million due to higher discount rates at December 31, 2013 and better than expected pension asset returns during 2013. Environmental Matters The company operates global manufacturing, product...

  • Page 37
    ...products that help direct and downstream customers reduce GHG emissions. The company is actively engaged in the effort to develop constructive public policies to reduce GHG emissions and encourage lower carbon forms of energy. Such policies may bring higher operating costs as well as greater revenue...

  • Page 38
    ... the need for coordinated global policy action. In 2013 EPA proposed more stringent regulations for new Electric Generating Units (EGU's) that may affect the long term price and supply of electricity. The precise impact is uncertain. PFOA The Performance Chemicals segment used a form of PFOA...

  • Page 39
    ... time to time, to manage near-term foreign currency cash requirements. Sensitivity Analysis The following table illustrates the fair values of outstanding derivative contracts at December 31, 2013 and 2012, and the effect on fair values of a hypothetical adverse change in the market prices or rates...

  • Page 40
    ...and communicated to management to allow timely decisions regarding required disclosures. As of December 31, 2013, the company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), together with management, conducted an evaluation of the effectiveness of the company's disclosure controls...

  • Page 41
    ... Pacific in 1994. In 1997, he was appointed regional director, North America and was appointed Vice President and General Manager-DuPont Crop Protection later that year. In January 2004, he was named Senior Vice President-DuPont Global Human Resources. He became Group Vice President in 2008 and was...

  • Page 42
    ...General Manager- Surfaces and Building Innovations in October 2005. In June 2006, he was named Group Vice President of DuPont Safety & Protection. In October 2009, Mr. Vergnano was appointed Executive Vice President. Mr. Vergnano has responsibility for businesses in the Performance Chemicals segment...

  • Page 43
    ... stock units granted and stock units deferred under the company's Equity and Incentive Plan, Stock Performance Plan, Variable Compensation Plan and the Stock Accumulation and Deferred Compensation Plan for Directors. Performance-based restricted stock units reflect the maximum number of shares...

  • Page 44
    ... 31, 2013 2012 2011 Accounts Receivable-Allowance for Doubtful Receivables Balance at beginning of period Additions charged to cost and expenses Deductions from reserves Amounts related to the Performance Coatings business Balance at end of period Deferred Tax Assets-Valuation Allowance Balance at...

  • Page 45
    ...ended June 30, 2013). Company's Retirement Savings Restoration Plan, as last amended effective January 1, 2013 (incorporated by reference to Exhibit 10.8 to the company's Annual Report on Form 10-K for the year ended December 31, 2012). Company's Retirement Income Plan for Directors, as last amended...

  • Page 46
    ...-14(a)/15d-14(a) Certification of the company's Principal Financial Officer. Section 1350 Certification of the company's Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any...

  • Page 47
    ...5, 2014 E. I. DU PONT DE NEMOURS AND COMPANY By: /s/ Nicholas C. Fanandakis Nicholas C. Fanandakis Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) _____ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed...

  • Page 48
    ... Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Income Statements for the years ended December 31, 2013, 2012 and 2011 Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011 Consolidated Balance...

  • Page 49
    ...in this Annual Report on Form 10-K. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and are considered by management to present fairly the company's financial position, results of operations and cash flows...

  • Page 50
    ...Statements, effective January 1, 2013, the Company changed its method of valuing inventory held at a majority of its foreign and certain U.S. locations from the last-in, first-out (LIFO) method to the average cost method. A company's internal control over financial reporting is a process designed to...

  • Page 51
    ..., except per share) For the year ended December 31, 2013 2012 2011 Net sales Other income, net Total Cost of goods sold Other operating charges Selling, general and administrative expenses Research and development expense Interest expense Employee separation / asset related charges, net Total...

  • Page 52
    ... per share) For the year ended December 31, 2013 2012 2011 Net income $ Other comprehensive income (loss), before tax: Cumulative translation adjustment Net revaluation and clearance of cash flow hedges to earnings: Additions and revaluations of derivatives designated as cash flow hedges Clearance...

  • Page 53
    ... CONSOLIDATED BALANCE SHEETS (Dollars in millions, except per share) December 31, Assets Current assets Cash and cash equivalents Marketable securities Accounts and notes receivable, net Inventories Prepaid expenses Deferred income taxes Assets held for sale Total current assets Property, plant and...

  • Page 54
    ...Preferred Stock Common Stock Additional Paid-in Capital Reinvested Earnings Treasury Stock Noncontrolling Interests Total Equity 2011 Balance January 1, 2011 Sale of a majority interest in a consolidated subsidiary Net income Other comprehensive income (loss) Common dividends ($1.64 per share...

  • Page 55
    ... operating assets Increase (decrease) in operating liabilities: Accounts payable and other operating liabilities Accrued interest and income taxes Cash provided by operating activities Investing activities Purchases of property, plant and equipment Investments in affiliates Payments for businesses...

  • Page 56
    ... to current year's presentation, including separately stating cost of goods sold and other operating charges on the Consolidated Income Statements. In the third quarter 2012, the company signed a definitive agreement to sell its Performance Coatings business (which represented a reportable segment...

  • Page 57
    ... net asset values and current interest rates for similar investments with comparable credit risk and time to maturity, the fair value of the company's cash equivalents approximates its stated value as of December 31, 2013 and 2012. Marketable Securities Marketable securities represent investments in...

  • Page 58
    ... of products with shorter shelf lives such as seeds, certain foodingredients and enzymes. Change in Accounting Policy Effective January 1, 2013, the company changed its method of valuing inventory held at a majority of its foreign and certain U.S. locations from the LIFO method to the average cost...

  • Page 59
    ... is based on prices of similar assets or other valuation methodologies including discounted cash flow techniques. Definite-lived intangible assets, such as purchased and licensed technology, patents and customer lists are amortized over their estimated useful lives, generally for periods ranging...

  • Page 60
    ... exchange rates in effect during the period. Hedging and Trading Activities Derivative instruments are reported in the Consolidated Balance Sheets at their fair values. For derivative instruments designated as fair value hedges, changes in the fair values of the derivative instruments will generally...

  • Page 61
    ... closing conditions, including timing of antitrust clearance. The assets classified as held for sale at December 31, 2013 related to GLS/Vinyls primarily consist of inventory and property, plant and equipment. Performance Coatings In February 2013, the company sold its Performance Coatings business...

  • Page 62
    ... and asset related costs related to a joint venture in the Performance Materials segment. 2012 Restructuring Program In 2012, the company commenced a restructuring plan to increase productivity, enhance competitiveness and accelerate growth. The plan was designed to eliminate corporate costs...

  • Page 63
    ...test, a $33 pre-tax impairment charge was recorded within the Performance Chemicals segment. During 2012, as a result of deteriorating conditions in an industrial polymer market, the company determined that an impairment triggering event had occurred and that an assessment of the asset group related...

  • Page 64
    ...3,762 An analysis of the company's effective income tax rate (EITR) on continuing operations is as follows: 2013 2012 2011 Statutory U.S. federal income tax rate Exchange gains/losses1 Domestic operations Lower effective tax rates on international operations-net2 Tax settlements Sale of a business...

  • Page 65
    ... continuing operations from 2013 to 2012 is primarily driven by higher worldwide sales volume, lower Imprelis® herbicide claims, net of insurance recoveries, and lower employee separation/asset related charges in 2013, partly offset by lower local selling prices and negative currency impact. See...

  • Page 66
    ... tax benefits as of December 31 Total unrecognized tax benefits that, if recognized, would impact the effective tax rate Total amount of interest and penalties recognized in the Consolidated Income Statements Total amount of interest and penalties recognized in the Consolidated Balance Sheets...

  • Page 67
    ... number of common shares outstanding in 2013 decreased as a result of the company's repurchase and retirement of its common stock, partially offset by the issuance of new shares from the company's equity compensation plans. The weighted-average number of common shares outstanding in 2012 increased...

  • Page 68
    ...collection experience, current economic and market conditions, and review of the current status of customers' accounts. Notes receivable - trade primarily consists of receivables within the Agriculture segment for deferred payment loan programs for the sale of seed products to customers. These loans...

  • Page 69
    ... and Acquisitions Balance as of December 31, 2012 Goodwill Adjustments and Acquisitions Balance as of December 31, 2011 Agriculture Electronics & Communications Industrial Biosciences Nutrition & Health Performance Chemicals Performance Coatings Performance Materials Safety & Protection Total...

  • Page 70
    ... 31, 2012 Accumulated Amortization Net Intangible assets subject to amortization (Definite-lived) Customer lists Patents Purchased and licensed technology Trademarks Other1 Intangible assets not subject to amortization (Indefinite-lived) In-process research and development Microbial cell factories2...

  • Page 71
    .... The decrease in the interest rate for 2013 was primarily due to long-term debt maturing within one year. 13. OTHER ACCRUED LIABILITIES December 31, 2013 2012 Compensation and other employee-related costs Deferred revenue Employee benefits (Note 18) Discounts and rebates Derivative instruments...

  • Page 72
    ... was an asset of $29 and $55 at December 31, 2013 and 2012, respectively. During 2008, the interest rate swap agreement associated with these notes was terminated. The gain will be amortized over the remaining life of the bond, resulting in an effective yield of 3.85%. In 2013, the company issued...

  • Page 73
    ... 31, 2013 2012 Employee benefits: Accrued other long-term benefit costs (Note 18) Accrued pension benefit costs (Note 18) Accrued environmental remediation costs Miscellaneous $ $ 2,530 $ 5,575 374 1,700 10,179 $ 3,271 9,303 353 1,760 14,687 Miscellaneous includes asset retirement obligations...

  • Page 74
    ... in 2013, 2012 and 2011, respectively. Asset Retirement Obligations The company has recorded asset retirement obligations primarily associated with closure, reclamation and removal costs for mining operations related to the production of titanium dioxide in Performance Chemicals. The company's asset...

  • Page 75
    ... 2012 and 2011, included charges of $575 and $175, respectively. At December 31, 2013, DuPont had accruals of $489 related to these claims. 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...

  • Page 76
    ... technology, associated data and soybean lines to support commercial introduction are expected to come due in years 2014 - 2017. Additionally, beginning in 2018, DuPont will pay royalties on a per unit basis related to the Genuity® Roundup Ready 2 Yield® and dicamba tolerance traits for the life...

  • Page 77
    ... from the sale of Performance Coatings for the purchase of shares of common stock. The 2012 $1,000 share buyback plan was completed in the second quarter 2013 through the ASR agreement, under which the company purchased and retired 20.4 million shares. During 2012, the company purchased and retired...

  • Page 78
    ... the years ended December 31, 2013, 2012 and 2011: Shares of common stock Issued Held In Treasury Balance January 1, 2011 Issued Repurchased Retired Balance December 31, 2011 Issued Repurchased Retired Balance December 31, 2012 Issued Repurchased Retired Balance December 31, 2013 1,004,351,000 22...

  • Page 79
    ... computation of net periodic benefit cost of the company's pension and other long-term employee benefit plans. See Note 18 for additional information. Tax (expense) benefit recorded in Stockholders' Equity was $(1,617), $(70) and $1,365 for the years 2013, 2012 and 2011, respectively. Included in...

  • Page 80
    .... Other Long-term Employee Benefits The parent company and certain subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans for retiree benefits are unfunded and the cost of the approved claims is paid from company funds. Essentially all of...

  • Page 81
    ... per share) Summarized information on the company's pension and other long-term employee benefit plans is as follows: Pension Benefits Obligations and Funded Status at December 31, 2013 2012 2013 Other Benefits 2012 Change in benefit obligation Benefit obligation at beginning of year Service cost...

  • Page 82
    ... 19,179 Pension Benefits Components of net periodic benefit cost (credit) and amounts recognized in other comprehensive income 2013 2012 2011 Net periodic benefit cost Service cost Interest cost Expected return on plan assets Amortization of loss Amortization of prior service cost Curtailment loss...

  • Page 83
    ...4.60% -% 3.85% 4.40% The rate of compensation increase represents the single annual effective salary increase that an average plan participant would receive during the participant's entire career at the company. Pension Benefits Other Benefits 2011 2013 2012 2011 Weighted-average assumptions used...

  • Page 84
    ...2013. In connection with the planned sale of the Performance Coatings business (See Note 2), the company updated the discount rate and expected return on plan assets for the U.S. pension plans during 2012. For determining the U.S. pension plans' net periodic benefit costs, the weighted discount rate...

  • Page 85
    ... master trust fund. The strategic asset allocation for this trust fund is selected by management, reflecting the results of comprehensive asset liability modeling. The general principles guiding U.S. pension asset investment policies are those embodied in the Employee Retirement Income Security Act...

  • Page 86
    ... The company's pension plans directly held $648 (3 percent of total plan assets) and $449 (2 percent of total plan assets) of DuPont common stock at December 31, 2013 and 2012, respectively. Primarily receivables for investment securities sold. Primarily payables for investment securities purchased...

  • Page 87
    ... per share) The company's pension plans hold Level 3 assets which are primarily ownership interests in investment partnerships and trusts that own private market securities and real estate. Fair value is generally based on the company's units of ownership and net asset value of the investment entity...

  • Page 88
    .... 2013 2012 2011 Dividend yield Volatility Risk-free interest rate Expected life (years) 3.6% 34.86% 1.0% 5.3 3.2% 34.87% 0.9% 5.3 3.2% 33.26% 2.3% 5.3 The company determines the dividend yield by dividing the current annual dividend on the company's stock by the option exercise price...

  • Page 89
    ... granted in 2011, 2012 and 2013 is equally based upon corporate revenue growth relative to peer companies and total shareholder return (TSR) relative to peer companies. Performance and payouts are determined independently for each metric. The actual award, delivered as DuPont common stock, can range...

  • Page 90
    ... assets and liabilities of its operations. The primary business objective of this hedging program is to maintain an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes, net of related tax effects, are minimized. The company...

  • Page 91
    ... Rate Swaps At December 31, 2013, the company maintained a number of interest rate swaps, which were implemented at the time debt instruments were issued. All interest rate swaps qualify for the shortcut method of hedge accounting, thus there is no ineffectiveness related to these hedges. Cash Flow...

  • Page 92
    ... related to foreign currency-denominated monetary assets and liabilities of its discontinued operations. Commodity Contracts The company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory...

  • Page 93
    ... (loss). For cash flow hedges, this represents the effective portion of the gain (loss) reclassified from accumulated OCI into income during the period. For the years ended December 31, 2013, 2012 and 2011, there was no material ineffectiveness with regard to the company's cash flow hedges. Gain...

  • Page 94
    ... 8 266 69 237 110 349 2,602 19 628 97 106 64 52 42 133 24 63 1,228 40 394 276 31 741 13,412 $ $ $ $ $ $ Net sales are attributed to countries based on the location of the customer. Includes property, plant and equipment less accumulated depreciation. Europe, Middle East, and Africa (EMEA). F-47

  • Page 95
    ... the products and production processes, end-use markets, channels of distribution and regulatory environment. The company's reportable segments are Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials, Safety & Protection...

  • Page 96
    ...Chemicals Performance Materials Safety & Protection Pharmaceuticals Other Total 2013 Segment sales Less: Transfers Net sales PTOI Depreciation and amortization Equity in earnings of affiliates Segment net assets Affiliate net assets Purchases of property, plant and equipment 2012 Segment sales...

  • Page 97
    ... Financial Statements PTOI to income from continuing operations before income taxes 2013 2012 2011 Total segment PTOI Non-operating pension and other postretirement employee benefit costs Net exchange losses, including affiliates Corporate expenses Interest expense Income from continuing...

  • Page 98
    ... income, net associated with the sale of an equity method investment. Included a $(275) impairment charge recorded in Employee separation/asset related charges, net related to asset groupings, which impacted the segments as follows: Electronics & Communications - $(150); Performance Chemicals - $(33...

  • Page 99
    ...and related benefit costs associated with the Danisco acquisition impacting the segments as follows: Industrial Biosciences - $(9); Nutrition & Health - $(14); Performance Materials - $(2); and Other - $(28). Included a $49 benefit recorded in Other income, net associated with the sale of a business...

  • Page 100
    ... certain U.S business tax provisions offset by a $(26) charge related to the global distribution of Performance Coatings cash proceeds. First and second quarter 2013 included charges of $(35) and $(80), respectively, recorded in Other operating charges associated with the company's process to fairly...

  • Page 101
    E. I. du Pont de Nemours and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) 24. SUBSEQUENT EVENTS In January 2014, the company's Board of Directors authorized a $5,000 share buyback plan. See Note 17 for additional details. F-54

  • Page 102
    ... on Contact) 2014 Annual Meeting The annual meeting of the shareholders will be held at 10:30 a.m., on Wednesday, April 23, in The DuPont Theatre in the DuPont Building, 1007 Market Street, Wilmington, Delaware. Stock Exchange Listings DuPont common stock (Symbol DD) is listed on the New York Stock...