DIVESTITURES AND OTHER TRANSACTIONS

DuPont (Shenzhen) Manufacturing Limited

In March 2016, the company recognized the sale of its 100 percent ownership interest in DuPont (Shenzhen) Manufacturing Limited to the Feixiang Group. The sale of the entity, which held certain buildings and other assets, resulted in a pre-tax gain of $369 ($214 net of tax). The gain was recorded in other income, net in the company's Consolidated Income Statements for the year ended December 31, 2016 and reflected as a Corporate item.

Performance Chemicals

On July 1, 2015 (the Distribution Date), DuPont completed the separation of its Performance Chemicals segment through the spin-off of all of the issued and outstanding stock of Chemours (the Separation). To effect the spin-off, DuPont distributed to its stockholders one share of Chemours common stock, par value $0.01 per share, for every five shares of DuPont common stock, par value $0.30 per share, (the Distribution) outstanding as of 5:00 p.m. June 23, 2015, the record date for the Distribution. In lieu of fractional shares of Chemours, stockholders of DuPont received cash, which generally was taxable. In connection with the Separation, the company and Chemours entered into a Separation Agreement, discussed below, and a Tax Matters Agreement and certain ancillary agreements, including an employee matters agreement, agreements related to transition and site services, and intellectual property cross licensing arrangements. In addition, the companies have entered into certain supply agreements. In the first quarter 2016, the company agreed in principle to prepay $190 for certain goods and services expected to be delivered by Chemours. As of December 31, 2016, the balance of the prepayment was $60 recorded within prepaid expenses on the Consolidated Balance Sheet, which is expected to be fully utilized through delivery of goods and services during 2017.

Separation Agreement

The company and Chemours entered into a Separation Agreement that sets forth, among other things, the agreements between the company and Chemours regarding the principal transactions necessary to effect the Separation and also sets forth ancillary agreements that govern certain aspects of the company’s relationship with Chemours after the separation. Among other matters, the Separation Agreement and the ancillary agreements provide for the allocation between DuPont and Chemours of assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the completion of the Separation.

Pursuant to the Separation Agreement, Chemours indemnifies DuPont against certain litigation, environmental, workers' compensation and other liabilities that arose prior to the distribution. The term of this indemnification is indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. At December 31, 2016, the indemnified assets are $81 within accounts and notes receivable, net and $444 within other assets along with the corresponding liabilities of $81 within other accrued liabilities and $444 within other liabilities on the Consolidated Balance Sheet.

The results of operations of the Performance Chemicals segment are presented as discontinued operations as summarized below:



For the year ended December 31,	2016			2015			2014
Net sales	$	—		$	2,810		$	6,317
Cost of goods sold	—			2,215			4,680
Other operating charges	36			386			422
Selling, general and administrative expenses	—			(87		)	453
Research and development expense	—			40			109
Other income, net	(3		)	(27		)	(46		)
Interest expense	—			32			—
Employee separation / asset related charges, net	—			59			21
(Loss) income from discontinued operations before income taxes	(33		)	192			678
(Benefit from) provision for income taxes	(28		)	106			202
(Loss) income from discontinued operations after income taxes	$	(5	)	$	86		$	476

During the years ended December 31, 2016, 2015 and 2014, the company incurred $35, $306, and $175 of costs, respectively, in connection with the transaction primarily related to professional fees associated with preparation of regulatory filings and separation activities within finance, tax, legal, and information system functions. Income from discontinued operations during the years ended December 31, 2016, 2015 and 2014, includes $35, $260 and $142 of these costs, respectively. Income from continuing operations during the years ended December 31, 2015 and 2014, includes $26 and $33 of these costs, respectively, recorded in other operating charges in the company's Consolidated Income Statements. Income from continuing operations during the year ended December 31, 2015 also included $20 of transaction costs incurred for a premium associated with the early retirement of DuPont debt. The company exchanged notes received from Chemours in May 2015 (as part of a dividend payment) for DuPont debt that it then retired. These costs were reported in interest expense in the company's Consolidated Income Statements.

During the year ended December 31, 2015, in connection with the separation, the company recorded an other post employment benefit plan curtailment gain of $274 and a pension curtailment gain of $7. See Note 17 for further discussion.

Income from discontinued operations during the year ended December 31, 2015, included a restructuring charge of $59, consisting of severance and related benefit costs associated with the Performance Chemicals segment to achieve fixed cost and operational productivity improvements for Chemours post-spin.

In connection with the spin-off, the company received a dividend from Chemours in May 2015 of $3,923 comprised of a cash distribution of $3,416 and a distribution in-kind of $507 of 7 percent senior unsecured notes due 2025 (Chemours Notes Received). Chemours financed the dividend payment through issuance of approximately $4,000 of debt, including the Chemours Notes Received (Chemours' Debt). Net assets of $431 were transferred to Chemours on July 1, 2015, including the $4,000 of Chemours' Debt.

The following table presents the depreciation, amortization and purchases of property, plant and equipment of the discontinued operations related to Performance Chemicals:

Glass Laminating Solutions/Vinyls

In June 2014, the company sold Glass Laminating Solutions/Vinyls (GLS/Vinyls), a part of the Performance Materials segment, to Kuraray Co. Ltd. The sale resulted in a pre-tax gain of $391 ($273 net of tax). The gain was recorded in other income, net in the company's Consolidated Income Statements for the year ended December 31, 2014.

Performance Coatings

In February 2013, the company sold its Performance Coatings business to Flash Bermuda Co. Ltd., a Bermuda exempted limited liability company formed by affiliates of The Carlyle Group (collectively referred to as "Carlyle").

The results of discontinued operations related to Performance Coatings are summarized below:



For the year ended December 31,	2016			2015			2014
Net sales	$	—		$	—		$	—
Income (loss) from discontinued operations before income taxes^1,2	$	6		$	(23	)	$	—
Benefit from income taxes³	(3		)	(1		)	(15		)
Income (loss) from discontinued operations after income taxes	$	9		$	(22	)	$	15


^1.	The year ended December 31, 2016 includes a pre-tax benefit of $6 primarily related to a postretirement settlement gain.


^2.	The year ended December 31, 2015 includes a pre-tax net charge of $(23) related to a postretirement settlement charge and other employee related settlement adjustments.


^3.	The year ended December 31, 2014 includes a tax benefit of $(15) related to a change in estimate of income taxes resulting from the filing of various tax returns impacted by the sale of Performance Coatings.

For the year ended December 31,

Depreciation

Amortization of intangible assets

Purchases of property, plant and equipment