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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-15
3. EMPLOYEE SEPARATION/ASSET RELATED CHARGES, NET
At December 31, 2013, total liabilities related to restructuring activities were $57, primarily relating to the 2012 restructuring
program. In addition to the programs discussed below, a charge of $19, which included $9 recorded in employee separation / asset
related charges, net and $10 recorded in other income, net, was taken in the fourth quarter 2013. This charge was a result of
restructuring actions including employee separation 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 previously allocated to the Performance Coatings business as well as utilize
additional cost-cutting actions to improve competitiveness. As a result, pre-tax charges of $234 were recorded in employee
separation / asset related charges, net. The 2012 charges consisted of $157 of employee separation costs, $8 of other non-personnel
charges, and $69 of asset related charges, which included $30 of asset impairments and $39 of asset shut downs.
The 2012 restructuring program charges impacted segment earnings as follows: Agriculture - $11, Electronics & Communications
- $9, Industrial Biosciences - $3, Nutrition & Health - $53, Performance Chemicals - $3, Performance Materials - $13, and Safety
& Protection - $58, as well as Corporate expenses - $84.
In the fourth quarter 2013, the company recorded a net reduction of $(17) in the estimated costs associated with the 2012 restructuring
program. This net reduction was primarily due to lower than estimated individual severance costs and workforce reductions through
non-severance programs. The net reduction impacted segment earnings for the year ended December 31, 2013 as follows: Agriculture
- $(2), Electronics & Communications - $2, Industrial Biosciences - $(1), Nutrition & Health - $(3), Performance Chemicals - $1,
Performance Materials - $(1), and Safety & Protection - $(2), Other - (2), as well as Corporate expenses - $(9).
The actions and payments related to the 2012 restructuring program were substantially complete as of December 31, 2013.
Account balances and activity for the 2012 restructuring program are summarized below:
Asset
Related
Employee
Separation
Costs
Other Non-
Personnel
Charges1Total
Charges to income in 2012 $ 69 $ 157 $ 8 $ 234
Charges to accounts:
Payments — (4)(1) (5)
Net translation adjustment — 1 — 1
Asset write-offs and adjustments (69) — — (69)
Balance as of December 31, 2012 $ — $ 154 $ 7 $ 161
Payments — (82)(5) (87)
Net translation adjustment — (1) — (1)
Asset write-offs and adjustments — (19) 2 (17)
Balance as of December 31, 2013 $ — $ 52 $ 4 $ 56
1. Other non-personnel charges consist of contractual obligation costs.
Asset Impairments
In the fourth quarter 2013, as a result of strategic decisions related to the thin film photovoltaic market, and during 2012, as a result
of deteriorating conditions in the thin film photovoltaic market, the company determined that impairment triggering events had
occurred and that assessments of the asset group related to its thin film photovoltaic modules and systems were warranted. These
assessments determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment tests, $129
and $150 of pre-tax impairment charges were recorded during 2013 and 2012, respectively, within the Electronics & Communications
segment.