DUPONT E I DE NEMOURS & CO | 2013 | FY | 3

SEGMENT INFORMATION
The company consists of 13 businesses which are aggregated into eight reportable segments based on similar economic characteristics, the nature of the products and production processes, end-use markets, channels of distribution and regulatory environment. The company's reportable segments are Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials, Safety & Protection and Pharmaceuticals. The company includes certain embryonic businesses not included in the reportable segments, such as pre-commercial programs, and nonaligned businesses in Other.

Major products by segment include: Agriculture (corn hybrids and soybean varieties, herbicides, fungicides and insecticides); Electronics & Communications (photopolymers and electronic materials); Industrial Biosciences (enzymes and bio-based materials); Nutrition & Health (cultures, emulsifiers, texturants, natural sweeteners and soy-based food ingredients); Performance Chemicals (fluorochemicals, fluoropolymers, specialty and industrial chemicals, and white pigments); Performance Materials (engineering polymers, packaging and industrial polymers, films and elastomers); Safety & Protection (nonwovens, aramids and solid surfaces); and Pharmaceuticals (representing the company's interest in the collaboration relating to Cozaar®/Hyzaar® antihypertensive drugs, which is reported as other income). The company operates globally in substantially all of its product lines.

In general, the accounting policies of the segments are the same as those described in Note 1. Exceptions are noted as follows and are shown in the reconciliations below. Segment sales include transfers to another business segment. Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. Segment net assets includes net working capital, net property, plant and equipment, and other noncurrent operating assets and liabilities of the segment. Affiliate net assets (pro rata share) excludes borrowing and other long-term liabilities. Depreciation and amortization includes depreciation on research and development facilities and amortization of other intangible assets, excluding write-down of assets. Prior years' data have been reclassified to reflect the current organizational structure.

Effective January 1, 2013, to better indicate operating performance, the company eliminated the allocation of non-operating pension and other postretirement employee benefit costs from segment pre-tax operating income (loss) (PTOI). Segment PTOI is defined as income (loss) from continuing operations before income taxes excluding non-operating pension and other postretirement employee benefit costs, exchange gains (losses), corporate expenses and interest. Certain reclassifications of prior year data have been made to conform to current year classifications.

 
Agriculture
Electronics &
Communications
Industrial Biosciences
Nutrition & Health
Performance
Chemicals
Performance
Materials
 
Safety &
Protection
Pharma-
ceuticals
Other
Total
2013
 
 
 
 
 
 
 
 
 
 
 
Segment sales
$
11,739

$
2,549

$
1,224

$
3,473

$
6,703

$
6,468

 
$
3,884

$
—

$
6

$
36,046

Less: Transfers
11

15

13

—

196

73

 
4

—

—

312

Net sales
11,728

2,534

1,211

3,473

6,507

6,395

 
3,880

—

6

35,734

PTOI
2,132

203

170

305

924

1,281

 
694

32

(372
)
5,369

Depreciation and
    amortization
358

105

81

271

242

173

 
198

—

1

1,429

Equity in earnings of
    affiliates
36

22

2

—

19

(16
)
 
23

—

(49
)
37

Segment net assets
5,883

1,435

2,640

6,455

3,933

3,724

1 
3,138

(3
)
156

27,361

Affiliate net assets
281

145

48

7

169

492

 
106

—

21

1,269

Purchases of property,
    plant and equipment
485

73

77

138

424

184

 
109

—

112

1,602

2012
 
 


 
 
 
 
 
 
 
Segment sales
$
10,426

$
2,701

$
1,180

$
3,422

$
7,188

$
6,447

 
$
3,825

$
—

$
5

$
35,194

Less: Transfers
5

17

11

—

247

91

 
11

—

—

382

Net sales
10,421

2,684

1,169

3,422

6,941

6,356

 
3,814

—

5

34,812

PTOI
1,669

222

159

270

1,778

1,121

 
562

62

(474
)
5,369

Depreciation and
    amortization
337

113

79

288

245

182

 
197

—

1

1,442

Equity in earnings of
    affiliates
30

19

1

—

28

42

 
32

—

(53
)
99

Segment net assets
4,756

1,622

2,602

6,641

3,910

3,770

 
3,153

(18
)
77

26,513

Affiliate net assets
389

151

53

8

180

567

 
106

—

14

1,468

Purchases of property,
    plant and equipment
432

71

80

148

389

186

 
118

—

7

1,431

2011
 
 
 
 
 
 
 
 
 
 
 
Segment sales
$
9,166

$
3,173

$
705

$
2,460

$
7,794

$
6,815

 
$
3,934

$
—

$
40

$
34,087

Less: Transfers
1

19

7

—

257

109

 
13

—

—

406

Net sales
9,165

3,154

698

2,460

7,537

6,706

 
3,921

—

40

33,681

PTOI
1,566

438

2

76

2,114

1,079

 
661

289

(344
)
5,881

Depreciation and
    amortization
295

99

47

207

252

199

 
172

—

2

1,273

Equity in earnings of
    affiliates
58

19

(3
)
—

43

74

 
47

—

(47
)
191

Segment net assets
4,975

1,954

2,542

6,279

3,812

3,757

 
3,239

35

75

26,668

Affiliate net assets
330

197

52

1

201

445

 
111

—

34

1,371

Purchases of property,
    plant and equipment
420

198

61

115

326

197

 
208

—

5

1,530



1. 
Includes assets held for sale related to GLS/Vinyls of $228 as of December 31, 2013. See Note 2 for additional information.

Reconciliation to Consolidated Financial Statements
PTOI to income from continuing operations before income taxes
2013
2012
2011
Total segment PTOI
$
5,369

$
5,369

$
5,881

Non-operating pension and other postretirement employee benefit costs
(539
)
(654
)
(540
)
Net exchange losses, including affiliates
(128
)
(215
)
(146
)
Corporate expenses
(765
)
(948
)
(869
)
Interest expense
(448
)
(464
)
(447
)
Income from continuing operations before income taxes
$
3,489

$
3,088

$
3,879


 
Segment net assets to total assets at December 31,
2013
2012
2011
Total segment net assets
$
27,361

$
26,513

$
26,668

Corporate assets1
13,498

10,261

9,637

Liabilities included in segment net assets
10,640

10,009

9,250

Assets related to discontinued operations2
—

3,076

3,088

Total assets
$
51,499

$
49,859

$
48,643


1. 
Pension assets are included in corporate assets.
2. 
See Note 1 for additional information on the presentation of the Performance Coatings which met the criteria for discontinued operations during 2012.

Other items1
Segment
Totals
Adjustments
Consolidated
Totals
2013
 

 

 

Depreciation and amortization
$
1,429

$
174

$
1,603

Equity in earnings of affiliates
37

4

41

Affiliate net assets
1,269

(258
)
1,011

Purchases of property, plant and equipment
1,602

280

1,882

2012
 

 

 

Depreciation and amortization
$
1,442

$
271

$
1,713

Equity in earnings of affiliates
99

3

102

Affiliate net assets
1,468

(305
)
1,163

Purchases of property, plant and equipment
1,431

362

1,793

2011
 

 

 

Depreciation and amortization
$
1,273

$
287

$
1,560

Equity in earnings of affiliates
191

1

192

Affiliate net assets
1,371

(254
)
1,117

Purchases of property, plant and equipment
1,530

313

1,843



1. 
See Note 1 for additional information on the presentation of the Performance Coatings business which met the criteria for discontinued operations during 2012.

Additional Segment Details
2013 included the following pre-tax benefits (charges):
Agriculture1,3
$
(351
)
Electronics & Communications3,4
(131
)
Industrial Biosciences3
1

Nutrition & Health3
6

Performance Chemicals2,3
(74
)
Performance Materials3
(16
)
Safety & Protection3
4

Other3
5

    
$
(556
)


1. 
Included charges of $(425), offset by $73 of insurance recoveries, recorded in Other operating charges associated with the company's process to fairly resolve claims related to the use of Imprelis®. See Note 16 for additional information.
2. 
Included a $(72) charge recorded in Other operating charges related to the titanium dioxide antitrust litigation. See Note 16 for additional information.
3. 
Included a net $(3) restructuring adjustment consisting of a $16 benefit associated with prior year restructuring programs and a $(19) charge associated with restructuring actions related to a joint venture. The majority of the $16 net reduction recorded in Employee separation/asset related charges, net was due to the achievement of work force reductions through non-severance programs associated with the 2012 restructuring program. The charge of $(19) included $(9) recorded in Employee separation/asset related charges, net and $(10) recorded in Other income, net and was the result of restructuring actions related to a joint venture within the Performance Materials segment. Pre-tax amounts by segment were: Agriculture - $1, Electronics & Communications - $(2), Industrial Biosciences - $1, Nutrition & Health - $6, Performance Chemicals - $(2), Performance Materials - $(16), Safety & Protection - $4; and Other - $5. See Note 3 for additional information.
4. 
Included a $(129) impairment charge recorded in Employee separation/asset related charges, net related to an asset grouping within the Electronics & Communications segment. See Note 3 for additional information.

2012 included the following pre-tax benefits (charges):
Agriculture1,2,3
$
(469
)
Electronics & Communications3,4,5
(37
)
Industrial Biosciences3
(3
)
Nutrition & Health3
(49
)
Performance Chemicals3,5
(36
)
Performance Materials3,5
(104
)
Safety & Protection3
(58
)
Other3,6
(126
)
    
$
(882
)


1.
Included a $(575) charge recorded in Other operating charges associated with the company's process to fairly resolve claims related to the use of Imprelis®. See Note 16 for additional information.
2.
Included a $117 gain recorded in Other income, net associated with the sale of a business.
3.
Included a $(134) restructuring charge recorded in Employee separation/asset related charges, net primarily as a result of the company's plan to eliminate corporate costs previously allocated to Performance Coatings and cost-cutting actions to improve competitiveness, partially offset by a reversal of prior year restructuring accruals. Charges by segment were: Agriculture - $(11); Electronics & Communications - $(9); Industrial Biosciences - $(3); Nutrition & Health - $(49); Performance Chemicals - $(3); Performance Materials - $(12); Safety & Protection - $(58); and Other - $11. See Note 3 for additional information.
4.
Included a $122 gain recorded in Other income, net associated with the sale of an equity method investment.
5.
Included a $(275) impairment charge recorded in Employee separation/asset related charges, net related to asset groupings, which impacted the segments as follows: Electronics & Communications - $(150); Performance Chemicals - $(33); and Performance Materials - $(92). See Note 3 for additional information.
6. 
Included a $(137) charge in Other operating charges primarily related to the company's settlement of litigation with INVISTA.

2011 included the following pre-tax benefits (charges):
Agriculture1,2
$
(225
)
Industrial Biosciences3,4
(79
)
Nutrition & Health3,4
(126
)
Performance Materials4,5
47

Other4
(28
)
    
$
(411
)

1.
Included a $(50) charge recorded in Research and development expense in connection with a milestone payment associated with a Pioneer licensing agreement. Since this milestone was reached before regulatory approval was secured by Pioneer, it was charged to Research and development expense.
2.
Included a $(175) charge recorded in Other operating charges associated with the company's process to fairly resolve claims associated with the use of Imprelis®. See Note 16 for additional information.
3.
Included a $(182) charge for transaction related costs and the fair value step-up of inventories that were acquired as part of the Danisco transaction, which impacted the segments as follows: Industrial Biosciences - $(70) and Nutrition & Health - $(112).
4.
Included a $(53) restructuring charge primarily related to severance and related benefit costs associated with the Danisco acquisition impacting the segments as follows: Industrial Biosciences - $(9); Nutrition & Health - $(14); Performance Materials - $(2); and Other - $(28).
5.
Included a $49 benefit recorded in Other income, net associated with the sale of a business.

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