(Business Wire) MIDLAND, Mich., and WILMINGTON, Del.--(BUSINESS WIRE)-- DowDuPont™ (NYSE:DWDP) today filed historical unaudited pro forma financial statements that give effect to the Merger Transaction, provide quarterly pro forma financial information aligned to DowDuPont’s new reportable segments and incorporate reporting practices that provide additional visibility into the underlying performance of the Company.
In light of the significant amount of accounting and reporting changes incorporated into the historical and current quarter pro forma financial statements, DowDuPont also provided its expected results for the third quarter of 2017:
- GAAP net sales of $15.4 billion; pro forma net sales of $18.3 billion, up 8 percent versus the year-ago period, with gains in both volume and price.
- GAAP diluted earnings per share of $0.32. Pro forma adjusted earnings per share of $0.55, an increase of 10 percent versus the same quarter last year. Pro forma adjusted earnings per share excludes $0.37 per share charge for significant items and $0.08 per share charge for DuPont amortization of intangible assets.
These expected results reflect robust consumer-led demand in most of DowDuPont’s core end-markets, as well as pricing gains and higher equity earnings, which more than offset higher feedstock costs, weak market conditions in agriculture (particularly due to expected lower corn area and a delayed start to the Brazil summer season) and the unfavorable impact of hurricanes.
Pro Forma Financial Statements
DowDuPont’s unaudited pro forma financial statements are based on the historical consolidated financial statements of Dow and DuPont, adjusted for activities that are directly attributable to the merger transaction and are expected to have continuing impact, such as: purchase accounting; accounting policy alignment; elimination of the effect of events that are directly attributable to the merger agreement (e.g., one-time transaction costs); elimination of the impact of transactions between Dow and DuPont; and removal of the effect of remedy divestitures implemented as a condition of approval for the merger of Dow and DuPont1,2.
The pro forma net sales, pro forma diluted earnings per common share from continuing operations - diluted, and pro forma adjusted earnings per common share from continuing operations - diluted are presented as if the merger had been consummated on Jan. 1, 2016. Pro forma income statements and segment information are provided on a quarterly basis beginning Jan. 1, 2016, and ending June 30, 2017.
DowDuPont’s pro forma financial statements were filed on Form 8-K with the Securities and Exchange Commission and can be found on the filings and reports page of the Company’s website.
Further details will be shared in DowDuPont’s third quarter earnings news release and during the Company’s earnings conference call on Nov. 2, 2017.
| Three Months Ended | ||
Preliminary | Sep 30, 2016 | |
GAAP net sales (millions) | $15,354 | $12,483 |
GAAP earnings per common share - diluted | $0.32 | $0.63 |
Reconciliation of Pro Forma Earnings Per Common Share from Continuing Operations - Diluted to | ||
Pro forma net sales (millions) | $18,285 | $16,991 |
Pro forma earnings per common share from continuing operations - diluted | $0.10 | $0.22 |
- Earnings per common share impact of pro forma significant items, after-tax3 | (0.37) | (0.20) |
- Earnings per common share impact of pro forma amortization of DuPont's intangible assets, after-tax | (0.08) | (0.08) |
Pro forma adjusted earnings per common share from continuing operations - diluted (Non-GAAP)4 | $0.55 | $0.50 |
1 Includes the following divestitures agreed to with certain regulatory agencies as a condition of approval for the merger, including: Dow’s global Ethylene Acrylic Acid copolymers and ionomers business; a portion of Dow AgroSciences’ corn seed business in Brazil; and DuPont’s cereal broadleaf herbicides and chewing insecticides portfolio as well as portions of its crop protection research and development pipeline and organization.
2 In accordance with SEC Regulation S-X, Article 11 rules, the results of Dow AgroSciences’ corn seed business in Brazil that is being divested as part of the required remedies have been removed from pro forma results through the merger close date. The results of this business will remain in the US GAAP results from the merger close date until the transaction is closed.
3 The three months ended September 30, 2017 includes pretax losses for: integration and separation costs, amortization of fair value step-up in DuPont's inventories, and restructuring and asset-related charge and a tax related charge for changes in tax attributes as a result of the Merger. It also includes a pretax gain related to the sale of the Ethylene Acrylic Acid copolymers and ionomers business. The three months ended September 30, 2016 includes pretax losses for: the impact of the Dow Corning ownership restructure, integration and separation costs, the write-down of indefinite lived intangible assets, and implementation costs associated with Dow's restructuring programs and other productivity actions.
4 Pro Forma Adjusted Earnings Per Share ("Pro Forma Adjusted EPS"), a non-GAAP measure, is defined as “Pro Forma earnings (loss) per common share from continuing operations - diluted,” excluding the after-tax impact of pro forma significant items and the after-tax impact of pro forma amortization expense associated with DuPont’s intangible assets. Pro Forma Adjusted EPS is a financial measure not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP financial measures of performance.
About DowDuPont
DowDuPont (NYSE: DWDP) is a holding company comprised of The Dow Chemical Company and DuPont with the intent to form strong, independent, publicly traded companies in agriculture, materials science and specialty products sectors that will lead their respective industries through productive, science-based innovation to meet the needs of customers and help solve global challenges.