10-KPeriod: FY2017

EIDP, Inc. Annual Report, Year Ended Dec 31, 2017

Filed February 15, 2018For Securities:CTA-PBCTA-PA

Summary

This 10-K filing for EIDP, Inc. (DuPont) for the period ending December 30, 2017, details the transformative year marked by the "Merger of Equals" with Dow Chemical, forming DowDuPont. This strategic combination created a new entity from which the intent is to separate into three independent, publicly traded companies: agriculture, specialty products, and materials science. The report highlights the significant restructuring charges and integration costs associated with this merger and the planned separations, amounting to hundreds of millions of dollars. Investors should note the significant changes in financial presentation due to the merger, with 'Predecessor' and 'Successor' periods not being directly comparable. The company also faced a substantial one-time benefit from the Tax Cuts and Jobs Act enacted in late 2017, which reduced the corporate tax rate but also imposed a transition tax on foreign earnings. Significant legal matters, particularly the PFOA settlement and ongoing environmental remediation liabilities, continue to be material factors. The company's liquidity remains strong, supported by robust cash flow from operations and access to capital markets.

Financial Highlights

25 data points
Beta

Total Assets

$112.96B

Cash & Equivalents

$7.81B

Financial Statements
Beta
Cash & Equivalents$7.81B
Short-term Investments$952.00M
Accounts Receivable$3.78B
Inventory$8.63B
Total Current Assets$23.05B
Property, Plant & Equipment$12.44B
Goodwill$45.59B
Total Assets$112.96B
Accounts Payable$4.83B
Short-term Debt$1.31B
Total Current Liabilities$12.14B
Long-term Debt$10.29B
Total Liabilities$38.03B
Retained Earnings$175.00M
Stockholders' Equity$74.93B

Key Highlights

  • 1The company completed a significant "Merger of Equals" with Dow Chemical on August 31, 2017, forming DowDuPont, with plans to separate into three distinct companies.
  • 2Significant restructuring and integration costs totaling hundreds of millions of dollars were incurred due to the merger and planned business separations.
  • 3The enactment of the Tax Cuts and Jobs Act in late 2017 resulted in a provisional tax benefit of $2,001 million due to corporate tax rate reduction, offset by a $715 million charge for a one-time transition tax on foreign earnings.
  • 4The company recorded a $335 million pre-tax charge related to the settlement of PFOA lawsuits, with DuPont and Chemours each paying half of the total $670.7 million settlement.
  • 5The divestiture of the Divested Ag Business to FMC Corporation and the acquisition of FMC's Health and Nutrition Business (H&N Business) were completed on November 1, 2017.
  • 6The company's intellectual property portfolio includes approximately 6,500 active U.S. patents and 9,900 active patents outside the U.S. as of December 31, 2017.
  • 7Accrued environmental remediation and restoration costs were $433 million at December 31, 2017, with a potential range of up to $920 million above that amount.

Frequently Asked Questions

The DowDuPont merger significantly impacted financial reporting, leading to the distinction between 'Predecessor' (prior to August 31, 2017) and 'Successor' (from September 1, 2017 onwards) periods. This 'push-down' accounting method means that assets and liabilities are reflected at fair value as of the merger date in the Successor period, making direct year-over-year comparisons of financial data challenging.

The Intended Business Separations refer to the planned separation of DowDuPont's combined agriculture, specialty products, and materials science businesses into three independent, publicly traded companies. DowDuPont anticipates the materials science business separating by the end of the first quarter of 2019, and the agriculture and specialty products businesses separating by June 1, 2019.

DuPont and its co-defendant Chemours agreed to a $670.7 million settlement for PFOA-related lawsuits. DuPont recorded a pre-tax charge of $335 million for its share of the settlement, primarily for the portion not covered by indemnification from Chemours. The settlement was entered into as a compromise and not an admission of liability.

The Tax Cuts and Jobs Act, enacted in December 2017, resulted in a provisional net benefit of $2,001 million recognized in the fourth quarter of 2017. This benefit was primarily from the reduction of the U.S. federal corporate income tax rate from 35% to 21%, partially offset by a provisional charge of $715 million related to the one-time transition tax on previously untaxed foreign earnings. The company expected sufficient foreign tax credits to offset the transition tax liability.