Summary
E. I. du Pont de Nemours and Company (DuPont) has filed an amendment to its June 26, 2014 Form 8-K to provide an update on its ongoing redesign initiative. The company is revising its previously disclosed restructuring plan, expecting to incur an additional pre-tax charge of approximately $315 million in the fourth quarter of 2014. This charge comprises employee separation costs, asset-related charges, and contract termination costs. Investors should note that this additional charge brings the total estimated cost of the restructuring to approximately $578 million ($263 million recognized in Q2 2014 + $315 million expected in Q4 2014). The company anticipates future cash payments related to this plan, primarily for severance, totaling about $175 million, with the restructuring actions expected to be substantially complete by mid-2016. Further charges and cash outlays may occur in future periods, and DuPont will provide updates as reliable estimates become available.
Key Highlights
- 1DuPont expects to record an additional pre-tax charge of approximately $315 million in Q4 2014 related to its redesign initiative.
- 2This new charge brings the total estimated pre-tax restructuring costs to roughly $578 million.
- 3The Q4 2014 charge includes an estimated $160 million for employee separation, $140 million for asset-related costs, and $15 million for contract terminations.
- 4Future cash payments related to this restructuring are estimated at approximately $175 million, primarily for severance.
- 5The restructuring actions are expected to be substantially completed by mid-2016.
- 6DuPont may incur additional charges and cash payments in future periods related to this plan.
- 7The company will file further amendments to disclose any material changes or additional estimates as they become determinable.