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2015
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, 2015
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.)
974 Centre Road
Wilmington, Delaware 19805
(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 (§232.405 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, 2015, was approximately $57.8 billion.
As of January 29, 2016, 871,681,000 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 27, 2016. III

Table of contents

  • Page 1
    ... Wilmington, Delaware 19805 (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...

  • Page 2
    ... of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance...

  • Page 3
    ... 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...

  • Page 4
    ... Financial Statements. Productivity and Cost Savings Initiatives On December 11, 2015, DuPont announced a 2016 global cost savings and restructuring plan designed to reduce $730 million in costs in 2016 compared with 2015, which represents a reduction of operating costs on a run-rate basis...

  • Page 5
    ... for drought and nitrogen efficiency and insect protection. In soybean seeds, programs include products with enhanced end-use value and insect protection. Pioneer has seed production facilities located throughout the world. Seed production is performed directly by the business or contracted with...

  • Page 6
    ... investing in new products to strengthen its market leadership position in advanced printing markets. The segment supplies pigmented inks used in digital printing applications for commercial and home office use. In the displays market, E&C has developed solution-process technology, which it licenses...

  • Page 7
    ... supply chain. The company has long-standing relationships with these customers and they are considered to be important to the segment's operating results. Performance Materials product portfolio includes elastomers and thermoplastic and thermoset engineering polymers which are used by customers...

  • Page 8
    ... in Item 1 Agriculture business discussion beginning on page 4 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 to third parties...

  • Page 9
    ... unique world-class science and technology capabilities with its deep understanding of markets and value chains to drive revenue and profit growth for the company thereby delivering sustainable returns to our shareholders. DuPont's R&D investment is focused on delivering value to its customers while...

  • Page 10
    Part I ITEM 1. BUSINESS, continued Executive Officers of the Registrant Information related to the company's Executive Officers is included in Item 10, Directors, Executive Officers and Corporate Governance, beginning on page 51 of this report. 9

  • Page 11
    ... 11, 2015, DuPont and The Dow Chemical Company (Dow) agreed, subject to the terms and conditions of the Merger Agreement, to effect a strategic combination of their respective businesses by: (i) forming Diamond-Orion HoldCo, Inc., a corporation, organized under the laws of the State of Delaware and...

  • Page 12
    ... could result in increased costs and diversion of management's time and energy, as well as decreases in the amount of expected revenues which could materially impact the company's business, financial conditions and results of operations. Difficulties in the integration process and other disruptions...

  • Page 13
    ... exchange rates may affect the company's results from operations, financial condition and cash flows in future periods. The company actively manages currency exposures that are associated with net monetary asset positions, committed currency purchases and sales, foreign currency-denominated revenues...

  • Page 14
    ... negatively impact the company's ability to obtain licenses on competitive terms, commercialize new products and generate sales from existing products. Intellectual property rights, including patents, plant variety protection, trade secrets, confidential information, trademarks, tradenames and other...

  • Page 15
    ... benefits from cost and productivity initiatives to the extent and as anticipated. In connection with its ongoing review of costs, working capital performance and capital spending, in December 2015, the company announced a global cost savings and restructuring plan designed to reduce costs in 2016...

  • Page 16
    ... 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 17
    ... class actions against chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation and punitive damages arising from alleged environmental torts without claiming present personal injuries. The company also has noted a trend in public and...

  • Page 18
    ... by multiple segments are included more than once in the figures above. Europe, Middle East, and Africa (EMEA). The company's plants and equipment are well maintained and in good operating condition. The company believes it has sufficient production capacity to meet demand in 2016. Properties are...

  • Page 19
    ... continue. LaPorte Plant, LaPorte, Texas - Crop Protection On November 15, 2014 there was a release of methyl mercaptan at the company's LaPorte facility. The release occurred at the site's Crop Protection unit resulting in four employee fatalities inside the unit. DuPont is continuing its...

  • Page 20
    ... the terms of the ASR agreement, the company paid $2 billion to the financial institution and received and retired 35 million shares at an average price of $57.16 per share. DuPont's objective continues to be to complete the remaining $2 billion stock buyback by year end December 31, 2016. However...

  • Page 21
    .... 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 Stock Index and the Dow Jones Industrial Average. 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 DuPont...

  • Page 22
    ...Short-term Long-term Total equity General For the year Purchases of property, plant & equipment and investments in affiliates Depreciation1 Research and development expense1 Weighted-average number of common shares outstanding (millions) Basic Diluted Dividends per common share At year-end Employees...

  • Page 23
    ... of product, particularly in the Agriculture segment; Ability to discover, develop and protect new technologies and enforce the company's intellectual property rights; and Successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses...

  • Page 24
    ...substantial revenues from new products; increased focus on efficiency, cost discipline, and accountability; and expanded markets geographically. The company is better connecting its laboratories and the marketplace, and striving for faster, more effective execution in delivering innovative solutions...

  • Page 25
    .... 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 years ended December 31, 2015 and 2014 pre-tax (benefits...

  • Page 26
    ... company net sales versus 34 percent in 2014, representing a slight decline principally due to lower Agriculture volume in Latin America. Developing markets include China, India, countries located in Latin America, Eastern and Central Europe, Middle East, Africa and South East Asia. 2014 versus 2013...

  • Page 27
    ... the absence of prior year charges for Imprelis® herbicide claims and current year insurance recoveries. See Note 16 to the Consolidated Financial Statements for more information related to the the Imprelis® matter. (Dollars in millions) 2015 2014 2013 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES...

  • Page 28
    ... the Performance Materials segment and the absence of the $26 million re-measurement gain on equity method investment in 2013. Additional information related to the company's other income, net is included in Note 5 to the Consolidated Financial Statements. (Dollars in millions) 2015 2014 2013...

  • Page 29
    ... the company's policy of hedging the foreign currency-denominated monetary assets and liabilities of its operations, the absence of 2014 gains on sales of businesses and other assets in the Performance Materials and Agriculture segments, as well as increased tax benefits on employee separation/asset...

  • Page 30
    ...its operations, gains on sales of businesses and other assets in the Performance Materials and Agriculture segments, and the impact of Imprelis® charges in 2013 versus additional insurance recoveries in 2014. These impacts were partially offset by increased tax benefits on employee separation/asset...

  • Page 31
    ... income taxes for 2015, 2014 and 2013 is included in Note 22 to the Consolidated Financial Statements. DuPont Sustainable Solutions, within the company's Safety & Protection segment, is comprised of two business units: clean technologies and consulting solutions. Effective January 1, 2016, the clean...

  • Page 32
    Part II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued AGRICULTURE (Dollars in millions) 2015 2014 2013 Net sales Operating earnings Operating earnings margin $ $ 9,798 $ 1,646 $ 17% 2015 11,296 $ 2,352 $ 21% 2014 11,728 2,480 21% ...

  • Page 33
    ... and expected new product introductions. The company anticipates consumer electronics markets will have a weaker start to the year but strengthen in the second half as channel inventories are worked off. Full year 2016 segment net sales are expected to be about flat as strong volume growth in Tedlar...

  • Page 34
    ...principally for home and personal care, food markets and ethanol production. 2015 operating earnings and operating earnings margin increased primarily due to cost reductions and continued productivity improvements, partially offset by lower sales. 2014 versus 2013 Full year 2014 segment net sales of...

  • Page 35
    .... Outlook In 2016, market conditions are expected to remain challenging with currency headwinds persisting, primarily in Europe and Latin America. Full year 2016 segment net sales are expected to be down low-single digits percent as volume growth, driven by investments in probiotics and cultures, is...

  • Page 36
    ... a joint venture, the sale of a business and the realization of tax benefits associated with a manufacturing site. Operating earnings margin increased due primarily to cost reductions and continued productivity improvements. 2014 versus 2013 Full year 2014 segment net sales of $6.1 billion decreased...

  • Page 37
    Part II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued SAFETY & PROTECTION (Dollars in millions) 2015 2014 2013 Net sales Operating earnings Operating earnings margin $ $ 3,527 $ 704 $ 20% 2015 3,892 $ 772 $ 20% 2014 3,880 664 17% ...

  • Page 38
    ..., with several major financial institutions. These unused credit lines provide additional support to meet short-term liquidity needs and general corporate purposes including letters of credit. In February 2016, in line with seasonal agricultural working capital requirements, the company entered into...

  • Page 39
    ... by operating activities increased $0.5 billion in 2014 compared to 2013 due to lower year over year income tax payments associated with the sale of businesses and higher insurance recoveries and lower claims payments related to Imprelis® (See Note 16 to the Consolidated Financial Statements for...

  • Page 40
    ... retirement 20.4 million shares of common stock. See Note 17 Consolidated Financial Statements for additional information relating to the above share buyback plans. (Dollars in millions) 2015 2014 2013 Cash provided by operating activities Purchases of property, plant and equipment Free cash flow...

  • Page 41
    ... material effect on the company's financial position, liquidity or results of operations. Long-term Employee Benefits Accounting for employee benefit plans involves numerous assumptions and estimates. Discount rate and expected return on plan assets are two critical assumptions in measuring the cost...

  • Page 42
    ... key assumptions with respect to the company's pension and other long-term employee benefit plans, based on assets and liabilities at December 31, 2015: 1/2 Percentage Point Increase 1/2 Percentage Point Decrease Pre-tax Earnings Benefit (Charge) (Dollars in millions) Discount rate Expected rate...

  • Page 43
    ...12 months with the majority due to the settlement of uncertain tax positions with various tax authorities. Deferred income taxes result from differences between the financial and tax basis of the company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are...

  • Page 44
    ... cash flow and revenue and operating income growth rates made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. The company believes the current assumptions and estimates utilized are both reasonable and appropriate. In the fourth quarter 2015...

  • Page 45
    ... environment, investment returns on pension trust assets, as well as rules and regulations of the respective country in which the plans operate. The company's remaining pension plans with no plan assets and other long-term employee benefits plans are paid from operating cash flows. The benefit...

  • Page 46
    ... pension plans with no plan assets are paid from operating cash flows. The company made benefit payments of $144 million to its unfunded plans in 2015. 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...

  • Page 47
    ... 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued The company's key assumptions used in calculating its pension and other long-term employee benefits are the expected return on plan assets, the rate of compensation increases and the discount rate...

  • Page 48
    .... China has begun pilot programs for carbon taxes and trading of GHG emissions in selected areas. The current unsettled policy environment in the U.S., where many company facilities are located, adds an element of uncertainty to business decisions, particularly those relating to long-term capital...

  • Page 49
    ..., highlighting the need for coordinated global policy actions. An effective global climate policy framework will help drive the market changes that are needed to stimulate and efficiently deploy new innovations in science and technology, while maintaining open and competitive global markets. 48

  • Page 50
    ... in foreign exchange rates. Fair Value Asset/(Liability) (Dollars in millions) 2015 2014 2015 Fair Value Sensitivity 2014 Foreign currency contracts Marketable securities $ (6) $ 788 192 $ - (738) $ (110) (870) - Since the company's risk management programs are highly effective, the potential...

  • Page 51
    ... the SEC. These controls and procedures also give reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures. As of December 31, 2015, the company's Chief Executive Officer (CEO...

  • Page 52
    ... its CEO, CFO, and Controller that may be accessed from the company's website at www.dupont.com by clicking on "Investors" and then "Corporate Governance." Any amendments to, or waiver from, any provision of the code will be posted on the company's website at the above address. Executive Officers of...

  • Page 53
    ...Materials segments as well as regional management for Europe, Middle East, Africa and Canada and Corporate Communications. Effective January 2016, Mr. Collins has responsibility for the Agriculture businesses. C. Marc Doyle joined DuPont in 1995 as a research scientist within DuPont Central Research...

  • Page 54
    ... of the original grant. Represents the weighted-average exercise price of the outstanding stock options only; the outstanding stock-settled time-vested and performance-based restricted stock units and deferred stock units are not included in this calculation. Reflects shares available pursuant...

  • Page 55
    ... with Related Persons" and "Governance of the Company-Corporate Governance Guidelines," "Governance of the Company-Committees of the Board," "Governance of the Company-Committee Membership" and "Election of Directors." ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information with respect...

  • Page 56
    ..., Financial Statement Schedules and Exhibits: 1. 2. Financial Statements (See the Index to the Consolidated Financial Statements on page F-1 of this report). Financial Statement Schedules Schedule II-Valuation and Qualifying Accounts (Dollars in millions) Year Ended December 31, 2015 2014 2013...

  • Page 57
    ...long-term debt of the company and its subsidiaries. The DuPont Stock Accumulation and Deferred Compensation Plan for Directors, as last amended effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year...

  • Page 58
    ...10.1 to the company's Current Report on Form 8-K (Commission file number 1-815) dated October 5, 2015). Form of 2015 Award Terms under the Company's Equity and Incentive Plan (incorporated by reference to Exhibit 10.15 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for...

  • Page 59
    ...4, 2016 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 60
    ... Financial Statements: Management's Reports on Responsibility for Financial Statements and Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Income Statements for the years ended December 31, 2015, 2014 and 2013 Consolidated Statements...

  • Page 61
    ...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 62
    ...related consolidated statements of income, comprehensive income, equity and cash flows present fairly, in all material respects, the financial position of E. I. du Pont de Nemours and Company and its subsidiaries at December 31, 2015 and 2014, and the results of their operations and their cash flows...

  • Page 63
    ...STATEMENTS (Dollars in millions, except per share) For the year ended December 31, 2015 2014 2013 Net sales Cost of goods sold Other operating charges Selling, general and administrative expenses Research and development expense Other income, net Interest expense Employee separation / asset related...

  • Page 64
    ...Financial Statements CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in millions, except per share) For the year ended December 31, 2015 2014 2013 Net income $ Other comprehensive (loss) income, before tax: Cumulative translation adjustment Net revaluation and clearance of cash flow hedges...

  • Page 65
    ... Financial Statements 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 of discontinued operations...

  • Page 66
    ..., 2013 2014 Sale of a majority interest in a consolidated subsidiary Net income Other comprehensive (loss) income Common dividends ($1.84 per share) Preferred dividends Common stock issued - compensation plans Common stock repurchased Common stock retired Balance December 31, 2014 2015 Consolidation...

  • Page 67
    ... to reconcile net income to cash provided by operating activities: Depreciation Amortization of intangible assets Net periodic pension benefit cost Contributions to pension plans Gain on sales of businesses Other operating activities - net (Increase) decrease in operating assets: Accounts and notes...

  • Page 68
    ... excluded from continuing operations and segment results for all periods presented. The cash flows and comprehensive income related to the Performance Coatings business have not been segregated and are included in the Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for...

  • Page 69
    ...the delivery of goods are classified as cost of goods sold in the Consolidated Income Statements. Taxes on revenue-producing transactions are excluded from net sales. The company periodically enters into prepayment contracts with customers in the Agriculture segment and receives advance payments for...

  • Page 70
    ... when carrying value exceeds fair value. The company's fair value methodology 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...

  • Page 71
    ...Other environmental costs are also charged to expense unless they increase the value of the property or reduce or prevent contamination from future operations, in which case, they are capitalized. Asset Retirement Obligations The company records asset retirement obligations at fair value at the time...

  • Page 72
    ... for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the company's assets and liabilities and are adjusted for changes in tax rates and tax laws...

  • Page 73
    ... instruments will generally be offset in the income statement by changes in the fair value of the hedged items. For derivative instruments designated as cash flow hedges, the effective portion of any hedge is reported in accumulated other comprehensive income (loss) until it is cleared to earnings...

  • Page 74
    ... 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...

  • Page 75
    ... SEC; and (vii) the approval of the shares of DowDuPont Common Stock to be issued in the merger for listing on the NYSE. The obligation of each of DuPont and Dow to consummate the merger is also conditioned on, among other things, the receipt of a tax opinion from the tax counsel as to the tax-free...

  • Page 76
    ... agreement, agreements related to transition and site services, and intellectual property cross licensing arrangements. In addition, the companies have entered into certain supply agreements. In January 2016, the company agreed in principle to prepay $190 for certain goods and services expected to...

  • Page 77
    ... Consolidated Income Statements. Income from discontinued operations during the year ended December 31, 2015, included a restructuring charge of $59, consisting of severance and related benefit costs associated with the Performance Chemicals segment to achieve fixed cost and operational productivity...

  • Page 78
    ... operations related to Performance Chemicals: For the year ended December 31, 2015 2014 2013 Depreciation Amortization of intangible assets Purchases of property, plant and equipment $ 126 $ 2 235 248 $ 3 525 253 6 429 Glass Laminating Solutions/Vinyls In June 2014, the company sold...

  • Page 79
    ... Financial Statements (continued) (Dollars in millions, except per share) The results of discontinued operations are summarized below: For the year ended December 31, 2015 1 2014 2013 Net sales (Loss) income from discontinued operations before income taxes (Benefit from) provision for income...

  • Page 80
    ... of its Performance Chemicals segment. During the year ended December 31, 2015, a net benefit of $(21) was recorded to adjust the estimated costs associated with the 2014 restructuring program in employee separation / asset related charges, net in the company's Consolidated Income Statements. This...

  • Page 81
    ... 2015, a $38 pre-tax impairment charge was recorded in employee separation / asset related charges, net within the Other segment in the company's Consolidated Income Statements. The majority relates to a cost basis investment in which the assessment resulted from the venture's revised operating plan...

  • Page 82
    ... income taxes on continuing operations on the Consolidated Income Statements. 2015 2014 2013 Subsidiary/Affiliate Monetary Position Gain (Loss) Pretax exchange loss1 Local tax (expenses) benefits Net after-tax impact from subsidiary exchange loss Hedging Program Gain (Loss) Pretax exchange gain Tax...

  • Page 83
    ... of the company's effective income tax rate (EITR) on continuing operations is as follows: 2015 2014 2013 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 U.S. research...

  • Page 84
    ...-tax earnings from continuing operations from 2014 to 2015 is primarily driven by lower worldwide sales volume, the absence of 2014 gains on sales of businesses primarily in the U.S., higher employee separation/asset related charges, as well as the results of the company's hedging program. In 2015...

  • Page 85
    ..., the company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2004. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: 2015 2014 2013 Total unrecognized tax benefits as of...

  • Page 86
    ... the Agriculture segment for deferred payment loan programs for the sale of seed products to customers. These loans have terms of one year or less and are primarily concentrated in North America. The company maintains a rigid pre-approval process for extending credit to customers in order to manage...

  • Page 87
    ...of December 31, 2015 Goodwill Adjustments and Acquisitions Balance as of December 31, 2014 Goodwill Adjustments and Acquisitions Balance as of December 31, 2013 Agriculture Electronics & Communications Industrial Biosciences Nutrition & Health Performance Materials Safety & Protection Total $ 336...

  • Page 88
    ... Financial Statements. Based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's short-term borrowings was $1,190 and $1,424 at December 31, 2015 and 2014, respectively...

  • Page 89
    ... 2014 was 4.1% and 1.7%, respectively. The increase in the interest rate for 2015 was primarily due to long-term debt maturing within one year. 13. OTHER ACCRUED LIABILITIES December 31, 2015 2014 Compensation and other employee-related costs Deferred revenue Employee benefits (Note 18) Discounts...

  • Page 90
    ... at December 31, 2015 and 2014, respectively. Includes long-term debt due within one year. At December 31, 2014, the company had outstanding interest rate swap agreements with gross notional amounts of $1,000 that matured in 2015. The fair value of outstanding swaps was an asset of $1 at December...

  • Page 91
    ... Financial Statements. Based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's long-term borrowings was $7,860 and $9,970 at December 31, 2015 and 2014, respectively...

  • Page 92
    ... in 2015, 2014 and 2013, 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 93
    ... Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) DuPont recorded income of $185 and $210 for insurance recoveries, within other operating charges, for the years ended December 31, 2015 and 2014, respectively. The year ended December 31, 2013...

  • Page 94
    ... Financial Statements (continued) (Dollars in millions, except per share) Class members may pursue personal injury claims against DuPont only for those human diseases for which the C8 Science Panel determined a probable link exists. At December 31, 2015, there were approximately 3,500 lawsuits filed...

  • Page 95
    ...31, 2016. In August 2015, the company entered an accelerated share repurchase (ASR) agreement. Under the terms of the August 2015 ASR agreement, the company paid $2,000 to the financial institution and received and retired 35 million shares at an average price of $57.16 per share. 2014 Share Buyback...

  • Page 96
    ... Income Statements. These accumulated other comprehensive income components are included in the computation of net periodic benefit cost of the company's pension and other long-term employee benefit plans. See Note 18 for additional information. The unrealized loss on securities during the year...

  • Page 97
    ... Financial Statements (continued) (Dollars in millions, except per share) Tax (expense) benefit recorded in Stockholders' Equity was $(138), $1,461 and $(1,617) for the years 2015, 2014 and 2013, respectively. Included in these amounts were tax benefits of $37, $58 and $48 for the years 2015, 2014...

  • Page 98
    ...lump sum payments exceed the sum of service and interest cost components of net periodic pension cost of the plan for the year. The impact of these adjustments is not material to the company's current or previously issued financial statements. Other Long-term Employee Benefits The parent company and...

  • Page 99
    ... 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, 2015 2014 2015 Other Benefits 2014 Change in benefit obligation Benefit obligation at beginning of year Service cost Interest cost Plan...

  • Page 100
    ... was $24,984 and $27,923 at December 31, 2015 and 2014, respectively. Information for pension plans with projected benefit obligation in excess of plan assets 2015 2014 Projected benefit obligation Accumulated benefit obligation Fair value of plan assets $ 25,769 $ 24,715 17,162 28,079 26,498...

  • Page 101
    ... Financial Statements (continued) (Dollars in millions, except per share) Pension Benefits Components of net periodic benefit cost (credit) and amounts recognized in other comprehensive income 2015 2014 2013 Net periodic benefit cost Service cost Interest cost Expected return on plan assets...

  • Page 102
    ...'s entire career at the company. Pension Benefits Other Benefits 2013 2015 2014 2013 Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2015 2014 Discount rate Expected return on plan assets Rate of compensation increase 3.93% 8.10% 4.01...

  • Page 103
    ...Consolidated Financial Statements (continued) (Dollars in millions, except per share) For determining U.S. pension plans' net periodic benefit costs, the discount rate, expected return on plan assets and the rate of compensation increase were 4.29 percent, 8.50 percent and 4.20 percent for 2015. For...

  • Page 104
    ...this trust fund is approved by management. The general principles guiding U.S. pension asset investment policies are those embodied in the Employee Retirement Income Security Act of 1974 (ERISA). These principles include discharging the company's investment responsibilities for the exclusive benefit...

  • Page 105
    ...of total plan assets) and $737 (4 percent of total plan assets) of DuPont common stock at December 31, 2015 and 2014, respectively. Primarily receivables for investment securities sold. Primarily payables for investment securities purchased. The company's pension assets by fair value hierarchy table...

  • Page 106
    ... employee benefit plans, respectively, in 2014. In 2016, the company expects to contribute about the same as 2015 to its pension plans other than the principal U.S. pension plan, its remaining plans with no plan assets and its other long-term employee benefit plans. Estimated Future Benefit Payments...

  • Page 107
    ... defined contribution plans in 2016. 19. COMPENSATION PLANS The total stock-based compensation cost included in continuing operations within the Consolidated Income Statements was $128, $136 and $117 for 2015, 2014 and 2013, respectively. The income tax benefits related to stock-based compensation...

  • Page 108
    ... after taxes, significant after tax benefits (charges), and non-operating pension and other post-retirement employee benefit costs. Vesting for PSUs granted in 2014 and 2013 is equally based upon corporate revenue growth relative to peer companies and TSR relative to peer companies. Performance and...

  • Page 109
    ...-average period of 1.65 years. The total fair value of stock units vested during 2015, 2014 and 2013 was $64, $75 and $75, respectively. Other Cash-based Awards Cash awards under the EIP plan may be granted to employees who have contributed most to the company's success, with consideration being...

  • Page 110
    ... in the USD value of the related foreign currency-denominated revenues. The objective of the hedge program is to reduce earnings and cash flow volatility related to changes in foreign currency exchange rates. Interest Rate Risk The company uses interest rate swaps to manage the interest rate mix of...

  • Page 111
    ...futures and swaps, to hedge the commodity price risk associated with agriculture commodity exposures. While each risk management program has a different time maturity period, most programs currently do not extend beyond the next two-year period. Cash flow hedge results are reclassified into earnings...

  • Page 112
    ... the company's derivative assets and liabilities within the fair value hierarchy, as described in Note 1, as of December 31, 2015 and 2014. Fair Value at December 31 Using Level 2 Inputs Balance Sheet Location 2015 2014 Asset derivatives: Derivatives designated as hedging instruments: Interest rate...

  • Page 113
    ...(Loss) Recognized in OCI1 (Effective Portion) 2015 2014 2013 Amount of Gain (Loss) Recognized in Income2 2015 2014 2013 Income Statement Classification Derivatives designated as hedging instruments: Fair value hedges: Interest rate swaps Cash flow hedges: Foreign currency contracts Foreign currency...

  • Page 114
    ...short-term nature of the investments. The estimated fair value of the available-for-sale securities as of December 31, 2015 and 2014 was determined using level 1 inputs within the fair value hierarchy. Level 1 measurements were based on quoted market prices in active markets for identical assets and...

  • Page 115
    ... Financial Statements (continued) (Dollars in millions, except per share) 21. GEOGRAPHIC INFORMATION Net Sales1 2015 2014 2013 United States Canada EMEA2 France Germany Italy Other Total EMEA Asia Pacific China India Japan Other Total Asia Pacific Latin America Brazil Mexico Other Total Latin...

  • Page 116
    ... to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) Net Property1 2015 2014 2013 United States Canada EMEA2 Denmark France Spain Luxembourg Other Total EMEA Asia Pacific China Other Total Asia Pacific Latin America Brazil Other Total Latin America Total...

  • Page 117
    ...); Performance Materials (engineering polymers, packaging and industrial polymers, films and elastomers); and Safety & Protection (nonwovens, aramids and solid surfaces). The company operates globally in substantially all of its product lines. In general, the accounting policies of the segments are...

  • Page 118
    ... per share) Agriculture Electronics & Communications Industrial Biosciences Nutrition & Health Performance Materials Safety & Protection Other Total 2015 Net sales Operating earnings Depreciation and amortization Equity in earnings of affiliates Segment net assets Affiliate net assets Purchases...

  • Page 119
    ... operations before income taxes 2015 2014 2013 Total segment operating earnings $ Significant pre-tax (charges) benefits not included in segment operating earnings Non-operating pension and other postretirement employee benefit costs Net exchange gains (losses), including affiliates Corporate...

  • Page 120
    ... & Health - $(15), Performance Materials - $(99), Safety & Protection - $(52); and Other - $(10). See Note 4 for additional information. Included income of $210 for insurance recoveries, recorded in other operating charges associated with the company's process to fairly resolve claims related to...

  • Page 121
    ... $(9) recorded in employee separation / asset related charges, net and $(10) recorded in other income, net and was the result of restructuring actions related to a joint venture within the Performance Materials segment. Pre-tax amounts by segment were: Agriculture - $1; Electronics & Communications...

  • Page 122
    ... accrual for customer claims related to the use of the Agriculture segment's Imprelis® herbicide. See Note 16 for additional information. First quarter 2015 included a $(37) pre-tax impairment charge recorded in employee separation / asset related charges, net for a cost basis investment. See Note...

  • Page 123
    ...the repurchase facility) that expires on November 30, 2016. Under the repurchase facility, the company may sell a portfolio of available and eligible outstanding customer notes receivables within the Agriculture segment to participating institutions and simultaneously agree to repurchase at a future...

  • Page 124
    ...the company's website at http://www.dupont.com. This site includes important information on products and services, financial reports, news releases, environmental information and career opportunities. The company's periodic and current reports filed with the SEC are available on its website, free of...