Delaware | 1-815 | 51-0014090 | ||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
Of Incorporation) | File Number) | Identification No.) |
E. I. DU PONT DE NEMOURS AND COMPANY | |
(Registrant) | |
/s/ Barry J. Niziolek | |
Barry J. Niziolek | |
Vice President and Controller |
Exhibit 99.1 | |||||
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April 21, 2015 | Media Contact: | Dan Turner | |||
WILMINGTON, Del. | 302-774-0081 | ||||
daniel.a.turner@dupont.com | |||||
Investor Contact: | 302-774-4994 |
• | Delivered first-quarter operating earnings per share of $1.34, which includes a $0.25 per share negative impact from currency in segment results. |
• | Delivered volume growth and operating margin improvement in Performance Materials, Safety & Protection, Nutrition & Health, and Industrial Biosciences and introduced over 600 new products in the first quarter, a 5 percent increase from prior year. |
• | Sales were $9.2 billion, down 9 percent versus prior year primarily due to impacts from currency (6 percent), portfolio changes (2 percent) and expected near-term industry-wide challenges in Agriculture and Performance Chemicals. |
• | Cost reductions from operational redesign contributed $0.10 per share to first-quarter operating earnings; 2015 total cost savings expected to increase to approximately $0.40 per share. |
• | Estimated negative currency impact in 2015 increased to approximately $0.80 per share, up from the $0.60 per share we previously communicated; Company now expects to be at the low end of the previously communicated outlook range of $4.00-$4.20 operating earnings per share, including Performance Chemicals segment. |
Three Months Ended | |||||||||||||||||||
March 31, 2015 | Percentage Change Due to: | ||||||||||||||||||
(Dollars in millions) | $ | % Change | Local Price and Product Mix | Currency | Volume | Portfolio/Other | |||||||||||||
U.S. & Canada | $ | 4,319 | (3 | ) | (1 | ) | — | — | (2 | ) | |||||||||
EMEA* | 2,418 | (18 | ) | 3 | (16 | ) | (3 | ) | (2 | ) | |||||||||
Asia Pacific | 1,643 | (6 | ) | (1 | ) | (3 | ) | — | (2 | ) | |||||||||
Latin America | 792 | (18 | ) | (1 | ) | (6 | ) | (9 | ) | (2 | ) | ||||||||
Total Consolidated Sales | $ | 9,172 | (9 | ) | — | (6 | ) | (1 | ) | (2 | ) | ||||||||
* Europe, Middle East & Africa |
Three Months Ended | |||||||||||||||||||
March 31, 2015 | Percentage Change Due to: | ||||||||||||||||||
(Dollars in millions) | $ | % Change | Local Price and Product Mix | Currency | Volume | Portfolio/Other | |||||||||||||
Agriculture | $ | 3,937 | (10 | ) | 3 | (8 | ) | (5 | ) | — | |||||||||
Electronics & Communications | 521 | (10 | ) | (5 | ) | (2 | ) | (3 | ) | — | |||||||||
Industrial Biosciences | 285 | (5 | ) | — | (6 | ) | 1 | — | |||||||||||
Nutrition & Health | 813 | (6 | ) | — | (8 | ) | 2 | — | |||||||||||
Performance Chemicals | 1,364 | (14 | ) | (3 | ) | (3 | ) | (6 | ) | (2 | ) | ||||||||
Performance Materials | 1,411 | (8 | ) | (3 | ) | (5 | ) | 8 | (8 | ) | |||||||||
Safety & Protection | 909 | (4 | ) | (1 | ) | (4 | ) | 6 | (5 | ) | |||||||||
Other | 1 | ||||||||||||||||||
Total segment sales | 9,241 | (9 | ) | — | (6 | ) | (1 | ) | (2 | ) | |||||||||
Elimination of transfers | (69 | ) | |||||||||||||||||
Consolidated net sales | $ | 9,172 |
Change vs. 2014 | |||||||||||||||
(Dollars in millions) | 1Q15 | 1Q14 | $ | % | |||||||||||
Agriculture | $ | 1,139 | $ | 1,442 | $ | (303 | ) | -21 | % | ||||||
Electronics & Communications | 85 | 75 | 10 | 13 | % | ||||||||||
Industrial Biosciences | 56 | 56 | — | — | % | ||||||||||
Nutrition & Health | 89 | 93 | (4 | ) | -4 | % | |||||||||
Performance Chemicals (1) | 129 | 206 | (77 | ) | -37 | % | |||||||||
Performance Materials (1) | 327 | 293 | 34 | 12 | % | ||||||||||
Safety & Protection | 184 | 175 | 9 | 5 | % | ||||||||||
Other | (66 | ) | (92 | ) | 26 | 28 | % | ||||||||
Total segment operating earnings (2) | 1,943 | 2,248 | (305 | ) | -14 | % | |||||||||
Exchange gains (losses) (2),(3) | 127 | (96 | ) | 223 | |||||||||||
Corporate expenses | (164 | ) | (201 | ) | 37 | ||||||||||
Interest expense | (84 | ) | (103 | ) | 19 | ||||||||||
Operating earnings before income taxes | 1,822 | 1,848 | (26 | ) | -1 | % | |||||||||
Provision for income taxes on operating earnings | (590 | ) | (370 | ) | (220 | ) | |||||||||
Net income attributable to noncontrolling interests | 4 | 6 | (2 | ) | |||||||||||
Operating earnings | $ | 1,228 | $ | 1,472 | $ | (244 | ) | -17 | % | ||||||
Operating earnings per share | $ | 1.34 | $ | 1.58 | $ | (0.24 | ) | -15 | % | ||||||
(1) Prior period reflects the reclassifications of the Viton® fluoroelastomer product line from Performance Materials to Performance Chemicals. | |||||||||||||||
(2) See Schedules B and C for listing of significant items and their impact by segment. | |||||||||||||||
(3) See Schedule D for additional information on exchange gains and losses. |
SCHEDULE A | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Net sales | $ | 9,172 | $ | 10,128 | |||
Other income, net (1) | 198 | 17 | |||||
Total | 9,370 | 10,145 | |||||
Cost of goods sold | 5,553 | 6,000 | |||||
Other operating charges (1) | 283 | 286 | |||||
Selling, general and administrative expenses | 1,312 | 1,436 | |||||
Research and development expense | 499 | 518 | |||||
Interest expense | 84 | 103 | |||||
Employee separation / asset related charges, net (1) | 38 | — | |||||
Total | 7,769 | 8,343 | |||||
Income before income taxes | 1,601 | 1,802 | |||||
Provision for income taxes (1) | 566 | 357 | |||||
Net income | 1,035 | 1,445 | |||||
Less: Net income attributable to noncontrolling interests | 4 | 6 | |||||
Net income attributable to DuPont | $ | 1,031 | $ | 1,439 | |||
Basic earnings per share of common stock | $ | 1.13 | $ | 1.56 | |||
Diluted earnings per share of common stock | $ | 1.13 | $ | 1.54 | |||
Dividends per share of common stock | $ | 0.47 | $ | 0.45 | |||
Average number of shares outstanding used in earnings per share (EPS) calculation: | |||||||
Basic | 906,835,000 | 923,461,000 | |||||
Diluted | 913,819,000 | 930,732,000 | |||||
Reconciliation of Non-GAAP Measures | ||||||||||
Summary of Earnings Comparison | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | % Change | ||||||||
Net income (GAAP) | $ | 1,035 | $ | 1,445 | (28 | )% | ||||
Less: Significant items charge (benefit), after-tax, included in net income (per Schedule B) | (126 | ) | (12 | ) | ||||||
Non-operating pension/OPEB costs, after-tax, included in net income (2) | (71 | ) | (21 | ) | ||||||
Net income attributable to noncontrolling interest | 4 | 6 | ||||||||
Operating earnings (Non-GAAP) | $ | 1,228 | $ | 1,472 | (17 | )% | ||||
EPS attributable to DuPont (GAAP) | $ | 1.13 | $ | 1.54 | (27 | )% | ||||
Significant items charge (benefit) included in EPS (per Schedule B) | (0.14 | ) | (0.01 | ) | ||||||
Non-operating pension/OPEB costs included in EPS (2) | (0.07 | ) | (0.03 | ) | ||||||
Operating EPS (Non-GAAP) | $ | 1.34 | $ | 1.58 | (15 | )% | ||||
SCHEDULE A (continued) | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,622 | $ | 6,910 | ||||
Marketable securities | 125 | 124 | ||||||
Accounts and notes receivable, net | 7,651 | 6,005 | ||||||
Inventories | 7,051 | 7,841 | ||||||
Prepaid expenses | 366 | 279 | ||||||
Deferred income taxes | 504 | 589 | ||||||
Total current assets | 19,319 | 21,748 | ||||||
Property, plant and equipment, net of accumulated depreciation (March 31, 2015- $20,057; December 31, 2014 - $19,942) | 12,873 | 13,386 | ||||||
Goodwill | 4,365 | 4,529 | ||||||
Other intangible assets | 4,307 | 4,580 | ||||||
Investment in affiliates | 929 | 886 | ||||||
Deferred income taxes | 3,244 | 3,349 | ||||||
Other assets | 1,138 | 1,096 | ||||||
Total | $ | 46,175 | $ | 49,574 | ||||
Liabilities and Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 3,706 | $ | 4,822 | ||||
Short-term borrowings and capital lease obligations | 1,621 | 1,423 | ||||||
Income taxes | 654 | 547 | ||||||
Other accrued liabilities | 4,751 | 5,848 | ||||||
Total current liabilities | 10,732 | 12,640 | ||||||
Long-term borrowings and capital lease obligations | 8,763 | 9,271 | ||||||
Other liabilities | 13,329 | 13,819 | ||||||
Deferred income taxes | 489 | 466 | ||||||
Total liabilities | 33,313 | 36,196 | ||||||
Commitments and contingent liabilities | ||||||||
Stockholders' equity | ||||||||
Preferred stock | 237 | 237 | ||||||
Common stock, $0.30 par value; 1,800,000,000 shares authorized; Issued at March 31, 2015 - 992,224,000; December 31, 2014 - 992,020,000 | 298 | 298 | ||||||
Additional paid-in capital | 11,311 | 11,174 | ||||||
Reinvested earnings | 17,405 | 17,045 | ||||||
Accumulated other comprehensive loss | (9,722 | ) | (8,707 | ) | ||||
Common stock held in treasury, at cost (87,041,000 shares at March 31, 2015 and December 31, 2014) | (6,727 | ) | (6,727 | ) | ||||
Total DuPont stockholders' equity | 12,802 | 13,320 | ||||||
Noncontrolling interests | 60 | 58 | ||||||
Total equity | 12,862 | 13,378 | ||||||
Total | $ | 46,175 | $ | 49,574 |
SCHEDULE A (continued) | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Total Company | |||||||
Net income | $ | 1,035 | $ | 1,445 | |||
Adjustments to reconcile net income to cash used for operating activities: | |||||||
Depreciation | 306 | 312 | |||||
Amortization of intangible assets | 140 | 125 | |||||
Net periodic pension benefit cost | 147 | 100 | |||||
Contributions to pension plans | (124 | ) | (101 | ) | |||
Other operating activities - net | (2 | ) | 212 | ||||
Change in operating assets and liabilities - net | (3,625 | ) | (4,514 | ) | |||
Cash used for operating activities | (2,123 | ) | (2,421 | ) | |||
Investing activities | |||||||
Purchases of property, plant and equipment | (565 | ) | (320 | ) | |||
Investments in affiliates | (45 | ) | (22 | ) | |||
Proceeds from sales of businesses - net | 16 | — | |||||
Proceeds from sales of assets - net | 9 | 7 | |||||
Net decrease in short-term financial instruments | — | 80 | |||||
Foreign currency exchange contract settlements | 442 | 15 | |||||
Other investing activities - net | 3 | 4 | |||||
Cash used for investing activities | (140 | ) | (236 | ) | |||
Financing activities | |||||||
Dividends paid to stockholders | (429 | ) | (420 | ) | |||
Net decrease in borrowings | (309 | ) | (1,127 | ) | |||
Repurchase / prepayments of common stock | (282 | ) | (1,061 | ) | |||
Proceeds from exercise of stock options | 170 | 153 | |||||
Other financing activities - net | (1 | ) | (14 | ) | |||
Cash used for financing activities | (851 | ) | (2,469 | ) | |||
Effect of exchange rate changes on cash | (174 | ) | (33 | ) | |||
Decrease in cash and cash equivalents | (3,288 | ) | (5,159 | ) | |||
Cash and cash equivalents at beginning of period | 6,910 | 8,941 | |||||
Cash and cash equivalents at end of period | $ | 3,622 | $ | 3,782 | |||
Reconciliation of Non-GAAP Measure | |||||||
Calculation of Free Cash Flow - Total Company | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Cash used for operating activities | $ | (2,123 | ) | $ | (2,421 | ) | |
Purchases of property, plant and equipment | (565 | ) | (320 | ) | |||
Free cash flow | $ | (2,688 | ) | $ | (2,741 | ) | |
(1) See Schedule B for detail of significant items. | |||||||
(2) First quarter 2015 includes the impact of an after-tax exchange loss on non-operating pension of $23. |
SCHEDULE B | ||||||||||||||||||||||||
SIGNIFICANT ITEMS | ||||||||||||||||||||||||
Pre-tax | After-tax | ($ Per Share) | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
1st Quarter | ||||||||||||||||||||||||
Separation transaction costs (1) | $ | (81 | ) | $ | (16 | ) | $ | (80 | ) | $ | (12 | ) | $ | (0.09 | ) | $ | (0.01 | ) | ||||||
Customer claims recovery (2) | 35 | — | 22 | — | 0.02 | — | ||||||||||||||||||
Asset impairment charge (3) | (37 | ) | — | (30 | ) | — | (0.03 | ) | — | |||||||||||||||
Ukraine devaluation (4) | (40 | ) | — | (38 | ) | — | (0.04 | ) | — | |||||||||||||||
1st Quarter - Total | $ | (123 | ) | $ | (16 | ) | $ | (126 | ) | $ | (12 | ) | $ | (0.14 | ) | $ | (0.01 | ) |
(1) | First quarter 2015 and 2014 included charges of $(81) and $(16), respectively recorded in other operating charges associated with transaction costs related to the separation of the Performance Chemicals segment. | |||||||||||
(2) | The company recorded insurance recoveries of $35 in other operating charges, in the first quarter 2015 in the Agriculture segment, for recovery of costs for customer claims related to the use of the Imprelis® herbicide. The company had accruals of $231 related to these customer claims at March 31, 2015. The company has submitted and will continue to submit requests for payment to its insurance carriers for costs associated with this matter. To date, the company has recognized $318 of insurance recoveries from its insurance carriers and continues to seek recovery although the timing and outcome remain uncertain. | |||||||||||
(3) | During first quarter of 2015, a $(37) pre-tax impairment charge was recorded in employee separation / asset related charges, net for a cost basis investment within the Other segment. The assessment resulted from the venture's revised operating plan reflecting underperformance of its European wheat based ethanol facility and deteriorating European ethanol market conditions. One of the primary investors has communicated they would not fund the revised operating plan of the investee. As a result, the carrying value of our 6% equity investment in this venture exceeds its fair value. | |||||||||||
(4) | First quarter 2015 included a charge of $(40) in other income, net associated with remeasuring the company’s Ukrainian hryvnia net monetary assets. Ukraine’s central bank adopted a decision to no longer set the indicative hryvnia exchange rate. The hryvnia became a free-floating exchange rate and lost approximately a third of its value through the quarter. |
SCHEDULE C | |||||||
Three Months Ended March 31, | |||||||
SEGMENT SALES (1) | 2015 | 2014 | |||||
Agriculture | $ | 3,937 | $ | 4,394 | |||
Electronics & Communications | 521 | 580 | |||||
Industrial Biosciences | 285 | 301 | |||||
Nutrition & Health | 813 | 861 | |||||
Performance Chemicals (2) | 1,364 | 1,591 | |||||
Performance Materials (2) | 1,411 | 1,534 | |||||
Safety & Protection | 909 | 947 | |||||
Other | 1 | 1 | |||||
Total Segment sales | 9,241 | 10,209 | |||||
Elimination of transfers | (69 | ) | (81 | ) | |||
Consolidated net sales | $ | 9,172 | $ | 10,128 | |||
SCHEDULE C (continued) | ||||||||
Three Months Ended March 31, | ||||||||
INCOME BEFORE INCOME TAXES (GAAP) | 2015 | 2014 | ||||||
Agriculture | $ | 1,174 | $ | 1,442 | ||||
Electronics & Communications | 85 | 75 | ||||||
Industrial Biosciences | 56 | 56 | ||||||
Nutrition & Health | 89 | 93 | ||||||
Performance Chemicals (2) | 129 | 206 | ||||||
Performance Materials (2) | 327 | 293 | ||||||
Safety & Protection | 184 | 175 | ||||||
Other | (103 | ) | (92 | ) | ||||
Total Segment PTOI | 1,941 | 2,248 | ||||||
Corporate expenses | (245 | ) | (217 | ) | ||||
Interest expense | (84 | ) | (103 | ) | ||||
Non-operating pension/OPEB costs | (75 | ) | (30 | ) | ||||
Net exchange gains (losses) | 64 | (96 | ) | |||||
Income before income taxes | $ | 1,601 | $ | 1,802 | ||||
Three Months Ended March 31, | ||||||||
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (4) | 2015 | 2014 | ||||||
Agriculture | $ | 35 | $ | — | ||||
Electronics & Communications | — | — | ||||||
Industrial Biosciences | — | — | ||||||
Nutrition & Health | — | — | ||||||
Performance Chemicals (2) | — | — | ||||||
Performance Materials (2) | — | — | ||||||
Safety & Protection | — | — | ||||||
Other | (37 | ) | — | |||||
Total significant items by segment | (2 | ) | — | |||||
Corporate expenses | (81 | ) | (16 | ) | ||||
Net exchange gains (losses) | (40 | ) | — | |||||
Total significant items before income taxes | $ | (123 | ) | $ | (16 | ) | ||
Three Months Ended March 31, | ||||||||
OPERATING EARNINGS (NON-GAAP) | 2015 | 2014 | ||||||
Agriculture | $ | 1,139 | $ | 1,442 | ||||
Electronics & Communications | 85 | 75 | ||||||
Industrial Biosciences | 56 | 56 | ||||||
Nutrition & Health | 89 | 93 | ||||||
Performance Chemicals (2) | 129 | 206 | ||||||
Performance Materials (2) | 327 | 293 | ||||||
Safety & Protection | 184 | 175 | ||||||
Other | (66 | ) | (92 | ) | ||||
Total segment operating earnings | 1,943 | 2,248 | ||||||
Corporate expenses | (164 | ) | (201 | ) | ||||
Interest expense | (84 | ) | (103 | ) | ||||
Operating earnings before income taxes and exchange gains (losses) | 1,695 | 1,944 | ||||||
Net exchange gains (losses) (3) | 127 | (96 | ) | |||||
Operating earnings before income taxes | $ | 1,822 | $ | 1,848 | ||||
(1) Segment sales include transfers. | ||||||||
(2) Prior periods reflect the reclassifications of the Viton® product line from Performance Materials to Performance Chemicals. | ||||||||
(3) See Schedule D for additional information on exchange gains and losses. First quarter 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes the impact of a $23 exchange loss on non-operating pension. | ||||||||
(4) See Schedule B for detail of significant items. |
SCHEDULE D | |||||||||
Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Income before income taxes | $ | 1,601 | $ | 1,802 | |||||
Add: Significant items before income taxes | 123 | 16 | |||||||
Add: Non-operating pension/OPEB costs(1) | 98 | 30 | |||||||
Operating earnings before income taxes | $ | 1,822 | $ | 1,848 | |||||
Less: Net income attributable to noncontrolling interests | 4 | 6 | |||||||
Add: Interest expense | 84 | 103 | |||||||
Adjusted EBIT from operating earnings | 1,902 | 1,945 | |||||||
Add: Depreciation and amortization | 446 | 437 | |||||||
Adjusted EBITDA from operating earnings | $ | 2,348 | $ | 2,382 | |||||
Reconciliation of Operating Earnings Per Share (EPS) Outlook | |||||||||
The reconciliation below represents the company's outlook on an operating earnings basis, defined as earnings excluding significant items and non-operating pension/OPEB costs. | |||||||||
Year Ended December 31, | |||||||||
2015 Outlook | 2014 Actual | ||||||||
Operating EPS (Non-GAAP) | $4.00-$4.20 | $ | 4.01 | ||||||
Significant items | |||||||||
Separation transaction costs | (0.30 | ) | (0.14 | ) | |||||
Gain on sale of business | 0.47 | ||||||||
Restructuring charge | (0.42 | ) | |||||||
Venezuela devaluation | (0.06 | ) | |||||||
Tax items | — | ||||||||
Customer claims recovery | 0.02 | 0.14 | |||||||
Restructuring charge/adjustments | — | ||||||||
Litigation settlement | — | ||||||||
Asset impairment charge | (0.03 | ) | — | ||||||
Ukraine devaluation | (0.04 | ) | — | ||||||
Non-operating pension/OPEB costs - estimate | (0.21 | ) | (0.10 | ) | |||||
EPS (GAAP) | $3.44-$3.64 | $ | 3.90 | ||||||
SCHEDULE D (continued) | ||||||||
Exchange Gains/Losses on Operating Earnings(2) | ||||||||
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other income, net and the related tax impact is recorded in provision for (benefit from) income taxes on the Consolidated Income Statements. | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Subsidiary Monetary Position Gain (Loss) | ||||||||
Pre-tax exchange losses | $ | (120 | ) | $ | (50 | ) | ||
Local tax (expenses) benefits | (123 | ) | 12 | |||||
Net after-tax impact from subsidiary exchange losses | $ | (243 | ) | $ | (38 | ) | ||
Hedging Program Gain (Loss) | ||||||||
Pre-tax exchange gains (losses) | $ | 247 | $ | (46 | ) | |||
Tax (expenses) benefits | (89 | ) | 16 | |||||
Net after-tax impact from hedging program exchange gains (losses) | $ | 158 | $ | (30 | ) | |||
Total Exchange Gain (Loss) | ||||||||
Pre-tax exchange gains (losses) (3) | $ | 127 | $ | (96 | ) | |||
Tax (expenses) benefits | (212 | ) | 28 | |||||
Net after-tax exchange losses | $ | (85 | ) | $ | (68 | ) | ||
As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)." | ||||||||
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate | ||||||||
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), as defined above, significant items and non-operating pension/OPEB costs. | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Income before income taxes | $ | 1,601 | $ | 1,802 | ||||
Add: Significant items - charge (2) | 123 | 16 | ||||||
Non-operating pension/OPEB costs | 98 | 30 | ||||||
Less: Net exchange gains (losses) | 127 | (96 | ) | |||||
Income before income taxes, significant items, | ||||||||
exchange gains (losses), and non-operating pension/OPEB costs | $ | 1,695 | $ | 1,944 | ||||
Provision for income taxes | $ | 566 | $ | 357 | ||||
Add: Tax (expenses) benefits on significant items | (3 | ) | 4 | |||||
Tax benefits on non-operating pension/OPEB costs | 27 | 9 | ||||||
Tax (expenses) benefits on exchange gains/losses | (212 | ) | 28 | |||||
Provision for income taxes on operating earnings, excluding exchange gains (losses) | $ | 378 | $ | 398 | ||||
Effective income tax rate | 35.4 | % | 19.8 | % | ||||
Significant items effect and non-operating pension/OPEB costs effect | (3.0 | )% | 0.2 | % | ||||
Tax rate, before significant items and non-operating pension/OPEB costs | 32.4 | % | 20.0 | % | ||||
Exchange gains (losses) effect | (10.1 | )% | 0.5 | % | ||||
Base income tax rate | 22.3 | % | 20.5 | % | ||||
(1) First quarter, 2015, non-operating pension/OPEB costs includes a $23 exchange loss on foreign pension balances. | ||||||||
(2) See Schedule B for detail of significant items. | ||||||||
(3) First quarter 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes a $23 exchange loss on non-operating pension. |