Summary
E. I. du Pont de Nemours and Company (DuPont), a subsidiary of DowDuPont, has approved significant restructuring actions under the DowDuPont Cost Synergy Program, impacting its own financial reporting. These actions are a consequence of the August 2017 merger between Dow and DuPont and are preparatory to the intended separation of the combined entity into agriculture, materials science, and specialty products businesses. Investors should note that DuPont expects to incur substantial pre-tax restructuring charges, estimated to be around $850 million in total. The charges are primarily composed of severance and related benefits, asset-related costs, and contract termination expenses. A portion of these charges ($40 million) has already been recognized for the period ending September 30, 2017. The company anticipates recognizing approximately $115 million in charges in the fourth quarter of 2017, with the remainder to be incurred by the end of 2019. Significant future cash payments, estimated between $460 million and $540 million, are expected primarily for severance and contract termination costs. Investors should monitor potential adjustments to these estimates and be aware of the inherent uncertainties in forward-looking statements.
Key Highlights
- 1DuPont has approved a significant restructuring under the DowDuPont Cost Synergy Program, following the merger of Dow and DuPont.
- 2The restructuring is in preparation for the planned separation of DowDuPont into three distinct businesses: agriculture, materials science, and specialty products.
- 3DuPont expects to incur total pre-tax restructuring charges of approximately $850 million.
- 4These charges include estimated costs for severance ($350M-$400M), asset-related items (up to $360M), and contract terminations ($110M-$140M).
- 5$40 million in charges were already recorded for September 2017.
- 6Approximately $115 million in charges are expected in Q4 2017, with the remainder by the end of 2019.
- 7Future cash payments for these restructuring actions are estimated to be between $460 million and $540 million.