10-QPeriod: Q3 FY2018

EIDP, Inc. Quarterly Report for Q3 Ended Sep 30, 2018

Filed November 2, 2018For Securities:CTA-PBCTA-PA

Summary

E.I. du Pont de Nemours and Company (DuPont) reported a significant net loss of $4.96 billion for the third quarter of 2018, primarily driven by a substantial $4.5 billion goodwill impairment charge related to its agriculture reporting unit. This impairment reflects a reassessment of future cash flow projections due to challenging market conditions, including lower growth in sales and margins in key regions, unfavorable currency impacts, and decreased commodity prices. Despite the net loss, the company generated $5.3 billion in net sales for the quarter, reflecting volume growth in Latin America and Asia Pacific, and local pricing gains. For the nine months ended September 30, 2018, net sales reached $20.5 billion. The company also reported progress on its DowDuPont cost synergy program, with approximately $252 million in pre-tax charges incurred for the nine-month period. DuPont continues to navigate its integration and separation activities following the DowDuPont merger, with planned business separations anticipated in 2019.

Financial Highlights

23 data points
Beta

Total Assets

$101.72B

Cash & Equivalents

$4.04B

Financial Statements
Beta
Cash & Equivalents$4.04B
Short-term Investments$264.00M
Inventory$6.85B
Total Current Assets$18.92B
Property, Plant & Equipment$11.83B
Goodwill$40.99B
Total Assets$101.72B
Accounts Payable$4.21B
Total Current Liabilities$11.27B
Long-term Debt$10.21B
Total Liabilities$34.75B
Retained Earnings-$6.99B
Stockholders' Equity$66.97B

Key Highlights

  • 1Reported a significant net loss of $4.96 billion for the three months ended September 30, 2018.
  • 2Recorded a substantial $4.5 billion goodwill impairment charge related to the agriculture reporting unit due to revised cash flow projections.
  • 3Achieved net sales of $5.294 billion for the three months ended September 30, 2018, up from $1.735 billion in the prior year comparable period.
  • 4Net sales for the nine months ended September 30, 2018, totaled $20.538 billion.
  • 5Continued to incur integration and separation costs, totaling $926 million for the nine months ended September 30, 2018.
  • 6The company is actively preparing for the intended business separations of DowDuPont into three independent companies: Dow, Corteva Agriscience, and DuPont.
  • 7Cash used for operating activities was $2.561 billion for the nine months ended September 30, 2018.

Frequently Asked Questions

The substantial net loss of $4.96 billion was primarily due to a $4.5 billion goodwill impairment charge recognized for the agriculture reporting unit. This impairment was triggered by revised, less optimistic cash flow projections reflecting challenging market conditions, including lower growth expectations and pricing pressures in the agriculture sector.

Net sales for the third quarter of 2018 were $5.3 billion, a notable increase compared to the $1.7 billion reported in the same period of the previous year. This growth was driven by higher volumes in Latin America and Asia Pacific, along with favorable pricing in those regions.

DuPont is actively engaged in preparing for the separation of DowDuPont's businesses into three independent entities: Dow (materials science), Corteva Agriscience (agriculture), and DuPont (specialty products). These separations are anticipated to occur in phases, with the materials science business expected to separate around April 1, 2019, and the agriculture and specialty products businesses around June 1, 2019.

The company is involved in several legal and environmental proceedings, notably related to PFOA (perfluorooctanoic acid) and GenX discharges. While management states that the ultimate disposition of these matters is not anticipated to have a material adverse effect on the company's results of operations, financial position, or liquidity, significant uncertainties exist, and potential liabilities could be material in the period recognized. The company has recorded accruals for certain environmental matters.