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Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
39
In the first quarter 2015, DuPont announced its intention to buy back shares of about $4 billion using the distribution proceeds
received from Chemours. In connection with the completion of the spin-off of Chemours, the Board of Directors authorized the
use of the distribution proceeds to buy back shares of the company's common stock as follows: $2 billion to be purchased and
retired by December 31, 2015 with the remainder to be purchased and retired by December 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 billion to the financial institution and received and retired 35 million shares at an average price of $57.16 per share. See
Part I, Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and
Note 17 to the Consolidated Financial Statements for additional information.
DuPont’s objective continues to be to complete the remaining $2 billion stock buyback by year end December 31, 2016. However,
as a result of the planned merger of equals with Dow, the company expects it will have limited opportunities to enter the market
prior to the shareholder vote on the merger. After the vote, the company plans to make repurchases.
In January 2014, the company's Board of Directors authorized a $5 billion share buyback plan. In February and August 2014, the
company entered into two separate ASR agreements. The February 2014 ASR agreement was completed in the second quarter of
2014, under which the company purchased and retired 15.1 million shares for $1 billion. The August 2014 ASR agreement was
completed in the fourth quarter of 2014, under which the company purchased and retired 10.4 million shares for $700 million. In
addition to the ASR agreements, in 2014, the company repurchased and retired 4.7 million shares in the open market for a total
cost of $300 million. In 2015, the company repurchased and retired 4.6 million shares in the open market for a total cost of $353
million. As a result, the company has completed $2.4 billion of repurchases as of December 31, 2015. The remainder of the $5
billion share buyback will be purchased in future periods as there is no required completion date for purchases under the 2014
plan.
In December 2012, the company's Board of Directors authorized a $1 billion share buyback plan. In 2013, the company entered
into an ASR agreement with a financial institution under which the company used $1 billion of the proceeds from the sale of
Performance Coatings for the purchase and 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 $ 2,316 $ 3,712 $ 3,179
Purchases of property, plant and equipment (1,629)(2,020)(1,882)
Free cash flow $ 687 $ 1,692 $ 1,297
Free cash flow is a measurement not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP
measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, the
company's free cash flow definition may not be consistent with the methodologies used by other companies. The company defines
free cash flow as cash provided by operating activities less purchases of property, plant and equipment, and therefore indicates
operating cash flow available for payment of dividends, other investing activities and other financing activities. Free cash flow is
useful to investors and management to evaluate the company's cash flow and financial performance, and is an integral financial
measure used in the company's financial planning process.
For further information relating to the change in cash provided by operating activities, see discussion above under cash provided
by operating activities.