DuPont 2014 Annual Report Download - page 3

Part I
2
ITEM 1. BUSINESS
DuPont was founded in 1802 and was incorporated in Delaware in 1915. Today, DuPont is creating higher growth and higher
value by extending the company’s leadership in agriculture and nutrition, strengthening and growing capabilities in advanced
materials and leveraging cross-company skills to develop a world-leading bio-based industrial business. Through these strategic
priorities, DuPont is helping customers find solutions to capitalize on areas of growing global demand — enabling more, safer,
nutritious food; creating high-performance, cost-effective energy efficient materials for a wide range of industries; and increasingly
delivering renewably sourced bio-based materials and fuels. Total worldwide employment at December 31, 2014, was about 63,000
people. The company has operations in about 90 countries worldwide and 62 percent of consolidated net sales are made to customers
outside the United States of America (U.S.). See Note 20 to the Consolidated Financial Statements for additional details on the
location of the company's sales and property.
Subsidiaries and affiliates of DuPont conduct manufacturing, seed production or selling activities and some are distributors of
products manufactured by the company. As a science and technology based company, DuPont competes on a variety of factors
such as product quality and performance or specifications, continuity of supply, price, customer service and breadth of product
line, depending on the characteristics of the particular market involved and the product or service provided. Most products are
marketed primarily through the company's sales force, although in some regions, more emphasis is placed on sales through
distributors. The company utilizes numerous suppliers as well as internal sources to supply a wide range of raw materials, energy,
supplies, services and equipment. To ensure availability, the company maintains multiple sources for fuels and many raw materials,
including hydrocarbon feedstocks. Large volume purchases are generally procured under competitively priced supply contracts.
In June 2014, DuPont announced its global, multi-year initiative to redesign its global organization and operating model to reduce
costs and improve productivity and agility across all businesses and functions. DuPont commenced a restructuring plan to realign
and rebalance staff function support, enhance operational efficiency, and to reduce residual costs associated with the separation
of its Performance Chemicals segment. As a result, during the year ended December 31, 2014 a pre-tax charge of $562 million
was recorded. Additional details related to this plan can be found in Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, on page 19 of this report and Note 3 to the Consolidated Financial Statements.
In October 2013, DuPont announced that it intends to separate its Performance Chemicals segment through a U.S. tax-free spin-
off to shareholders, subject to customary closing conditions. The company expects to complete the separation about mid-2015.
Additional details related to the separation can be found in Item 7, Management's Discussion and Analysis of Financial Condition
and Results of Operations, on page 19 of this report and Note 2 to the Consolidated Financial Statements.
In third quarter 2012, the company entered into a definitive agreement to sell its Performance Coatings business (which represented
a reportable segment). In accordance with generally accepted accounting principles in the U.S. (GAAP), the results of Performance
Coatings are presented as discontinued operations and, as such, have been excluded from continuing operations and segment
results for all periods presented. On February 1, 2013, the sale of Performance Coatings was completed.
Business Segments
The company consists of 12 businesses which are aggregated into 7 reportable segments based on similar economic characteristics,
the nature of 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 and Safety & Protection. Viton® fluoroelastomer products (Viton®) will be
included in the Performance Chemicals separation and therefore the results are reported within Performance Chemicals. Viton®
was previously reported within Performance Materials. The company includes certain embryonic businesses not included in the
reportable segments, such as pre-commercial programs, and nonaligned businesses in Other. The earnings from the previous
Pharmaceuticals segment are insignificant in 2014 and therefore the results are reported within Other. Additional information with
respect to business segment results is included in Item 7, Management's Discussion and Analysis of Financial Condition and
Results of Operations, on page 24 of this report and Note 21 to the Consolidated Financial Statements.