Summary
EIDP, Inc. (CTA-PB) filed an 8-K on June 26, 2014, to disclose a significant restructuring plan. This plan is part of a broader initiative to streamline operations and reduce costs in conjunction with the separation of its Performance Chemicals segment, expected in mid-2015. The company committed to a restructuring plan aimed at improving productivity across all businesses and reducing residual costs related to the Performance Chemicals divestiture. The company expects to record a pre-tax charge of approximately $270 million in the second quarter of 2014. This charge comprises $165 million for severance and benefits and $105 million for asset-related expenses. Future cash payments are estimated at $170 million, primarily for severance. The company anticipates substantial completion of these actions by December 31, 2015, with expected pre-tax cost savings of $250 million in 2015 and $300 million annually thereafter. DuPont acknowledges that additional charges and cash payments may be incurred and will file an amendment once these amounts can be reasonably estimated.
Key Highlights
- 1DuPont is implementing a broad redesign initiative to streamline operations and leverage global business support.
- 2A significant restructuring plan has been committed to, driven by the upcoming separation of the Performance Chemicals segment.
- 3The company expects a pre-tax charge of approximately $270 million in Q2 2014, including $165 million for severance and $105 million for asset charges.
- 4Future cash payments related to this plan are estimated at $170 million, mainly for severance costs.
- 5The restructuring is expected to be substantially complete by the end of 2015.
- 6Anticipated pre-tax cost savings are $250 million in 2015 and $300 million annually thereafter.
- 7DuPont has indicated that additional charges and future cash payments may be necessary and will provide updates.