DuPont Reports 4Q and Full-Year 2014 Operating EPS of $0.71 and $4.01; 4Q and Full-Year EPS in Line with Company Expectations Despite Macroeconomic Headwinds

Jan. 28, 2015 – DuPont today announced fourth quarter 2014 operating earnings of $0.71 per share compared to $0.59 per share in the prior year.  GAAP1 earnings from continuing operations were $668 million or $0.73 per share, versus $183 million or $0.19 per share last year.  Fourth quarter results reflect a
20-percent increase in operating earnings per share year-over-year realized from a number of company actions, including strategic portfolio initiatives, continued productivity improvements related to the company’s operational redesign, reductions in performance-based compensation, and share repurchases. 

For the full year 2014, DuPont delivered operating earnings of $4.01 per share compared to $3.88 per share in the prior year.  GAAP1 earnings from continuing operations were $3.90 per share, versus $3.04 per share last year. 
Volume, margins and earnings grew in the majority of segments, despite significant market and macroeconomic challenges, including a weaker Ag economy, a stronger dollar and a difficult market pricing environment.
"Our 2014 results demonstrate continued progress on our strategic plan to deliver higher growth and higher value, including ongoing portfolio refinement through several strategic portfolio actions and steady progress on the planned Chemours separation, substantial cost reductions from our operational redesign and productivity initiatives, and the continued return of capital to our shareholders through $2 billion of share repurchases and an increase in the common stock dividend of 4 percent," said DuPont Chair and CEO, Ellen Kullman.
"Rapid progress in our redesign initiative has enabled us to achieve a $1 billion run-rate target by year end 2015, well ahead of schedule, and we have identified at least $300 million of additional opportunities to streamline our operations and reduce costs.  This initiative remains a priority and we expect to see further results over time," Kullman added.  "In 2015, we remain focused on generating superior returns for our shareholders, including through return of capital from the expected Chemours dividend, while positioning DuPont for our next stage of growth."

Company Increases Cost Reduction Commitment and Outlines Expectations for Return of Capital From Chemours One-Time Dividend

The company has increased its cost reduction commitment from its operational redesign by approximately $300 million to at least $1.3 billion of total expected savings by 2017.  Additionally, by the end of 2015, the company now expects annual run-rate savings of approximately $1 billion, significantly ahead of its previously announced schedule.

In addition the company said it expects to return all or substantially all of the one-time dividend proceeds from Chemours to DuPont shareholders via share repurchases over the 12 to 18 months following the separation of Chemours.  Based on the target BB credit rating of Chemours, this amount is anticipated to be approximately $4 billion, pending the final credit ratings and underlying business conditions for Chemours.

Fourth Quarter Highlights

•    Sales were $7.4 billion versus $7.7 billion in the same period last year, down 5 percent primarily due to portfolio changes and negative currency impacts.

•    Volume grew in all segments except for Electronics & Communications.

•    Segment operating earnings were $1,014 million, reflecting disciplined execution despite macroeconomic headwinds, including a weaker Ag economy and the impact from a stronger U.S. dollar. 

•    Cost reductions from operational redesign contributed $0.05 per share to operating earnings in the quarter.

Full Year Highlights

•    Sales were $34.7 billion versus $35.7 billion last year, down 3 percent due to weakness in Ag markets, portfolio changes and negative currency impacts.  A 1-percent increase in volume was offset by price.

•    Segment operating earnings of $6.0 billion increased 1 percent versus $5.9 billion last year as the negative impact of portfolio changes and currency were more than offset by continued productivity improvements, lower performance-based compensation and gains from business divestitures.
 
•    Continued to execute on our plan to deliver higher growth and higher value for our shareholders:

o    Cost reductions from operational redesign contributed $0.07 per share to operating earnings in 2014;

o    Completed 10 strategic portfolio actions during the year;

o    Completed a $2 billion share buyback; and

o    Increased the common stock dividend 4 percent in July 2014.
 
•    The Chemours separation remains on track, as highlighted by the initial Form 10 filing on December 18.

Global Consolidated Net Sales – 4th Quarter
Fourth quarter 2014 net sales of $7.4 billion decreased 5 percent versus last year, reflecting a 4-percent impact from portfolio changes, 1-percent lower local selling prices and a 3-percent negative currency impact, partially offset by 3-percent higher volume. 

Global Consolidated Net Sales – Full Year
Full-year 2014 net sales of $34.7 billion decreased 3 percent versus last year, reflecting a 2-percent impact from portfolio changes, 1-percent lower local selling prices and a 1-percent negative currency impact, partially offset by 1-percent higher volume.

Outlook
The company expects 2015 operating earnings of $4.00 to $4.20 per share, including the full-year outlook for the Performance Chemicals segment.  This estimate includes an approximately $0.60 per share negative currency impact due to the recent strengthening of the dollar based upon an average basket of exchange rates for our business at January 23.  The currency impact is expected to be most significant in the first half of the year due to the seasonality of operating earnings from Agriculture in the northern hemisphere. In 2015, the company anticipates that the increase in the base tax rate from prior year will be about a $0.15 per share headwind. The company also expects that the operational redesign will deliver savings of about $0.35 per share in 2015.

The 2015 outlook does not reflect the planned separation of the Performance Chemicals segment or the impact of the expected return of capital related to the separation.