DUPONT DE NEMOURS, INC. Management's discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the interim Consolidated Financial Statements and related notes to enhance the understanding of the Company's operations and present business environment. Components of management's discussion and analysis of financial condition and results of operations include: •Recent Developments •Result of Operations •Segment Results •Changes in Financial Condition
Overview
As ofMarch 31, 2021 , the Company has$6.9 billion of working capital and approximately$6.4 billion in cash, cash equivalents, and marketable securities. The Company expects its cash, cash equivalents, and marketable securities, cash generated from operations, and ability to access the debt capital markets to provide sufficient liquidity and financial flexibility to meet the liquidity requirements associated with its continued operations. The Company continually assesses its liquidity position, including possible sources of incremental liquidity, in light of the current economic environment, capital market conditions and Company performance. OnFebruary 1, 2021 ,DuPont completed the separation and distribution of the Nutrition & Biosciences business segment (the "N&B Business"), and merger ofNutrition & Biosciences, Inc. ("N&B"), aDuPont subsidiary formed to hold the N&B Business, with a subsidiary of International Flavors & Fragrances Inc. ("IFF"). The distribution was effected through an exchange offer (the "Exchange Offer") where, on the terms and subject to the conditions of the Exchange Offer, eligible participatingDuPont stockholders had the option to tender all, some or none of their shares of common stock, par value$0.01 per share, ofDuPont (the "DuPont Common Stock") for a number of shares of common stock, par value$0.01 per share, of N&B (the "N&B Common Stock") and which resulted in all shares of N&B Common Stock being distributed toDuPont stockholders that participated in the Exchange Offer. The consummation of the Exchange Offer was followed by the merger of N&B with a wholly owned subsidiary of IFF, with N&B surviving the merger as a wholly owned subsidiary of IFF (the "N&B Merger" and, together with the Exchange Offer, the "N&B Transaction"). In connection with and in accordance with the terms of the N&B Transaction, prior to consummation of the Exchange Offer and the N&B Merger,DuPont received a one-time cash payment of approximately$7.3 billion , (the "Special Cash Payment"), which is subject to post-closing adjustment pursuant to the terms of the N&B Separation and Distribution Agreement. The company used a portion of the proceeds to retire its$3 billion term loan facilities onFebruary 1, 2021 and will use the proceeds to fund the redemption, in accordance with their terms, of the$2 billion May 2020 Notes issuance. See discussion below and within "Liquidity and Capital Resources" for more information. DWDP Merger and DWDP Distributions EffectiveAugust 31, 2017 , pursuant to the merger of equals transaction contemplated by the Agreement and Plan of Merger, dated as ofDecember 11, 2015 , as amended onMarch 31, 2017 ("Merger Agreement"),The Dow Chemical Company ("TDCC") andE. I. du Pont de Nemours and Company ("EID") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont") and, as a result, TDCC and EID became subsidiaries of DowDuPont (the "DWDP Merger"). DowDuPont completed a series of internal reorganizations and realignment steps in order to separate into three, independent, publicly traded companies - one for each of its agriculture, materials science and specialty products businesses. DowDuPont formed two wholly owned subsidiaries: Dow Inc. ("Dow", formerly known asDow Holdings Inc. ), to serve as a holding company for its materials science business, and Corteva, Inc. ("Corteva"), to serve as a holding company for its agriculture business. OnApril 1, 2019 , the Company completed the separation of the materials science business through the spin-off of Dow Inc., including Dow's subsidiary TDCC (the "Dow Distribution"). OnJune 1, 2019 , the Company completed the separation of the agriculture business through the spin-off of Corteva including Corteva's subsidiary EID, (the "Corteva Distribution and together with the Dow Distribution, the "DWDP Distributions"). Following the Corteva Distribution, the Company holds the specialty products business as continuing operations. OnJune 1, 2019 , DowDuPont changed its registered name from "DowDuPont Inc. " to "DuPont de Nemours, Inc. " doing business as "DuPont" (the "Company"). Beginning onJune 3, 2019 , the Company's common stock is traded on the NYSE under the ticker symbol "DD." 40 -------------------------------------------------------------------------------- Table of Contents N&B Transaction The financial position ofDuPont as ofMarch 31, 2021 andDecember 31, 2020 and the results of operations ofDuPont for the three months endedMarch 31, 2021 and 2020 present the historical financial results of N&B as discontinued operations. The cash flows and comprehensive income related to N&B have not been segregated and are included in the interim Consolidated Statements of Cash Flows and interim Consolidated Statements of Comprehensive Income, respectively, for all periods presented. Unless otherwise indicated, the information in the notes to the interim Consolidated Financial Statements refer only toDuPont 's continuing operations and do not include discussion of balances or activity of N&B. See Note 2 to the interim Consolidated Financial Statements for additional information on the N&B Transaction. 2021 Segment Realignment Immediately following the separation and distribution of the N&B Business, the Company made changes to its management and reporting structure (the "2021 Segment Realignment") (see Note 22 for additional details). The reporting changes have been retrospectively reflected for all periods presented. 41 -------------------------------------------------------------------------------- Table of Contents RECENT DEVELOPMENTS 2021 Segment Realignments EffectiveFebruary 1, 2021 , immediately following the separation and distribution of the N&B Business, the Company completed the 2021 Segment Realignment and made changes to its management and reporting structure. These changes include the following: • Realignment of certain businesses from Transportation & Industrial to Electronics & Imaging; • Dissolution of the Non-Core segment with the businesses to be divested and previously divested reflected in Corporate; • Realignment of the remaining Non-Core businesses to Transportation & Industrial. In addition, the following name changes occurred: • Electronics & Imaging is renamed Electronics & Industrial; • Transportation & Industrial is renamed Mobility & Materials; • Safety & Construction is renamed Water & Protection. The reporting changes have been retrospectively reflected for all periods presented. See to Notes 3 and 22 to the interim Consolidated Financial Statements for additional information. Divestitures InJanuary 2021 , the Company entered into separate definitive agreements to sell its Clean Technologies and Solamet® businesses for about$680 million . These divestitures, subject to regulatory approval and customary closing conditions, are expected to close in the second half of 2021. The Company also signed a non-binding letter of intent to sell Chestnut Run labs, a portion of the Company's Chestnut Run campus. This transaction is expected to close within one year. See Note 2 to the interim Consolidated Financial Statements for additional information. Share Buyback Program In the first quarter of 2021, the Company's Board of Directors authorized a new$1.5 billion share buyback program, which expires onJune 30, 2022 ("2021 Share Buyback Program"). The Company expects to repurchase shares under the 2021 Share Buyback Program after the completion of the 2019 Share Buyback Program.
Dividends
OnFebruary 18, 2021 , the Board of Directors declared a first quarter dividend of$0.30 per share, paid onMarch 15, 2021 , to shareholders of record onMarch 1, 2021 .
On
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--------------------------------------------------------------------------------Table of Contents RESULTS OF OPERATIONS Summary of Sales Results Three Months Ended In millions March 31, 2021 March 31, 2020 Net sales$ 3,976 $ 3,670 The following table summarizes sales variances by segment and geographic region from the prior year: Sales Variances by Segment andGeographic Region Three
Months Ended
Local Price &
Percentage change from prior year Product Mix Currency
Volume Portfolio & Other Total
Electronics & Industrial (1) % 3 % 15 % - % 17 %
Water & Protection - 3 1 - 4
Mobility & Materials 1 3 7 - 11
Corporate 1 1 (4) (27) (29)
Total - % 3 % 7 % (2) % 8 %
U.S. & Canada - % - % (4) % (5) % (9) %
EMEA 1 (2) 7 - - 5
Asia Pacific 1 3 19 - 23
Latin America 6 (7) - - (1)
Total - % 3 % 7 % (2) % 8 %
1.Europe,
The Company reported net sales for the three months endedMarch 31, 2021 of$4.0 billion , up 8 percent from$3.7 billion for the three months endedMarch 31, 2020 , due to a 7 percent increase in volume and a 3 percent favorable currency impact offset by a 2 percent decline in portfolio actions. Local price and product mix remained flat. The volume growth was focused inAsia Pacific offset by declines inU.S. &Canada . Volume grew across all segments, with the exception of the held for sale businesses in Corporate (down 4 percent). The most notable volume increase was in Electronics & Industrial (up 15 percent). Currency was up 3 percent compared with the same period last year, driven primarily by EMEA (up 7 percent) andAsia Pacific currencies (up 3 percent). Portfolio and other changes offset sales growth with a 2 percent decrease which impacted Corporate (down 27 percent). Local price was flat compared with the same period last year. Local price increased inLatin America (up 6 percent) andAsia Pacific (up 1 percent). Cost of Sales Cost of sales was$2.5 billion for the three months endedMarch 31, 2021 , up from$2.3 billion for the three months endedMarch 31, 2020 . Cost of sales increased for the three months endedMarch 31, 2021 primarily due to increased sales volume and currency impacts.
Cost of Sales as a percentage of net sales was 63 percent for the three months
ended
Research and Development Expenses ("R&D")
R&D expenses totaled $156 million in the first quarter of 2021, down from $173
million in the first quarter of 2020. R&D as a percentage of net sales was 4
percent and 5 percent for the three months ended March 31, 2021 and 2020,
respectively. The decrease for the three months ended March 31, 2021 as compared
with the same period of the prior year was primarily due to productivity actions
and temporary cost reductions related to COVID-19.
Selling, General and Administrative Expenses ("SG&A")
SG&A expenses were $456 million in the first quarter of 2021, down from $482
million in the first quarter of 2020. SG&A as a percentage of net sales was 11
percent and 13 percent for the three months ended March 31, 2021 and 2020,
respectively. The decrease for the three months ended March 31, 2021 as compared
with the same period of the prior year was primarily due to productivity actions
and reduced spending.
Amortization of Intangibles
Amortization of intangibles was $167 million in the first quarter of 2021, down
from $178 million in the first quarter of 2020. See Note 12 to the Consolidated
Financial Statements for additional information on intangible assets.
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Restructuring and Asset Related Charges - Net
Restructuring and asset related charges - net were $2 million in the first
quarter of 2021, down from $398 million in the first quarter of 2020. The
activity in the first quarter of 2021 is due to a $2 million charge related to
the 2020 Restructuring Program. The activity in the first quarter of 2020
included a $270 million impairment charge related to long-lived assets in
Corporate, a $105 million charge related to the 2020 Restructuring Program, $18
million charge related to the 2019 Restructuring Program and a $5 million charge
related to the DowDuPont Cost Synergy Program. See Note 4 to the interim
Consolidated Financial Statements for additional information.
Goodwill Impairment Charge
There were no goodwill related impairments for the three months ended March 31,
2021 . For the three months ended March 31, 2020 , goodwill impairment charge was
$533 million . The goodwill impairment charge relates to businesses to be
divested in 2021 which are included in Corporate. See Note 12 to the interim
Consolidated Financial Statements for additional information.
Integration and Separation Costs
Integration and separation costs, primarily consist of financial advisory,
information technology, legal, accounting, consulting, and other professional
advisory fees. In the first quarter of 2021, these costs were primarily
associated with the execution of activities related to strategic initiatives
including the divestiture of the Held for Sale Disposal Group . In the first
quarter of 2020, these costs were primarily associated with the execution of
activities related to the post-DWDP Merger integration and the DWDP
Distributions. These costs were $6 million in the first quarter of 2021, down
from $123 million in the first quarter of 2020. The decline was primarily
related to the timing of the post-DWDP Merger integration activities and the
DWDP Distributions.
Equity in Earnings of Nonconsolidated Affiliates
The Company's share of the earnings of nonconsolidated affiliates was $26
million in the first quarter of 2021, down from $39 million in the first quarter
of 2020. The decrease is primarily due to the sale of the HSC Group in the third
quarter of 2020.
Sundry Income (Expense) - Net
Sundry income (expense) - net includes a variety of income and expense items
such as foreign currency exchange gains or losses, interest income, dividends
from investments, gains and losses on sales of investments and assets,
non-operating pension and other post-employment benefit plan credits or costs,
and certain litigation matters. Sundry income (expense) - net in the first
quarter of 2021 was income of $16 million compared with income of $212 million
in the first quarter of 2020. The first quarter of 2021 included benefits
related to the sale of assets within the Electronics & Industrial segment of $24
million and income related to non-operating pension and other post-employment
benefit credits of $12 million , partially offset by an impairment charge related
to the held for sale classification of Chestnut Run labs of $15 million and
foreign currency exchange losses of $9 million . The first quarter of 2020
included benefits related to sales of the Compound Semiconductor Solutions
business unit of $197 million and income related to non-operating pension and
other post-employment benefit credits of $11 million .
Interest Expense
Interest expense was $146 million and $171 million for the three months ended
March 31, 2021 and 2020, respectively. The decrease primarily relates to the
maturity of the November 2020 Notes, the early repayment of the $3.0 billion
Term Loan Facilities, and absence of commercial paper borrowings, partially
offset by financing costs related to the May Debt Offering. Refer to Note 13 to
the interim Consolidated Financial Statements for additional information.
Provision for Income Taxes on Continuing Operations
The Company's effective tax rate fluctuates based on, among other factors, where
income is earned and the level of income relative to tax attribute. The
effective tax rate on continuing operations for the first quarter of 2021 was
5.6 percent, compared with an effective tax rate of (20.6) percent for the first
quarter of 2020. The effective tax rate for the first quarter of 2021 was
principally the result of a $59 million tax benefit related to the step-up in
tax basis in the goodwill of the Company's European regional headquarters legal
entity. The effective tax rate for the first quarter of 2020 was principally the
result of the non-tax-deductible goodwill impairment charge impacting Corporate.
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SEGMENT RESULTS
The Company's measure of profit/loss for segment reporting purposes is Operating
EBITDA as this is the manner in which the Company's chief operating decision
maker ("CODM") assessed performance and allocates resources. The Company defines
Operating EBITDA as earnings (i.e., "Income from continuing operations before
income taxes") before interest, depreciation, amortization, non-operating
pension / OPEB benefits / charges, and foreign exchange gains / losses, adjusted
for significant items. Reconciliations of these measures can be found in Note 22
to the interim Consolidated Financial Statements.
Effective
ELECTRONICS & INDUSTRIAL
The Electronics & Industrial segment is a leading global supplier of
differentiated materials and systems for a broad range of consumer electronics
including mobile devices, television monitors, personal computers and
electronics used in a variety of industries. The segment is a leading provider
of materials and solutions for the fabrication of semiconductors and integrated
circuits, and provides innovative metallization processes for metal finishing,
decorative, and industrial applications. Electronics & Industrial is a leading
provider of platemaking systems and photopolymer plates for the packaging
graphics industry, digital printing inks and cutting-edge materials for the
manufacturing of displays for organic light emitting diode ("OLED"). In
addition, the segment produces innovative engineering polymer solutions, high
performance parts, medical silicones and specialty lubricants.
Electronics & Industrial Three Months Ended
In millions March 31, 2021 March 31, 2020
Net sales $ 1,300 $ 1,115
Operating EBITDA $ 436 $ 327
Equity earnings $ 9 $ 9
Electronics & Industrial Three Months Ended
Percentage change from prior year March 31, 2021
Change in Net Sales from Prior Period due to:
Local price & product mix (1) %
Currency 3
Volume 15
Portfolio & other -
Total 17 %
Electronics & Industrial net sales were $1,300 million for the three months
ended March 31, 2021 , up 17 percent from $1,115 million for the three months
ended March 31, 2020 . Net sales increased due to a 15 percent increase in volume
and a 3 percent favorable currency impact partially offset by a 1 percent
decline in price. Volume growth was driven by Semiconductor Technologies new
technology ramps at advanced nodes within the logic and foundry segment and
increased memory demand in servers and data centers. Volume growth within
Interconnect Solutions was driven by higher material content in next-generation
smartphones. Within Industrial Solutions, volume gains in display materials and
healthcare more than offset weakness in aerospace and flexographic printing.
Operating EBITDA was $436 million for the three months ended March 31, 2021 , up
33 percent compared with $327 million for the three months ended March 31, 2020
driven by strong volume growth and a gain on the sale of assets.
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WATER & PROTECTION
The Water & Protection segment is a leading provider of engineered products and
integrated systems for a number of industries including worker safety, water
purification and separation, aerospace, energy, medical packaging and building
materials. The segment satisfies the growing global needs of businesses,
governments, and consumers for solutions that make life safer, healthier, and
better. By uniting market-driven science with the strength of highly regarded
brands, the segment strives to bring new products and solutions to solve
customers' needs faster, better and more cost effectively.
Water & Protection Three Months Ended
In millions March 31, 2021 March 31, 2020
Net sales $ 1,328 $ 1,276
Operating EBITDA $ 355 $ 357
Equity earnings $ 12 $ 7
Water & Protection Three Months Ended
Percentage change from prior year March 31, 2021
Change in Net Sales from Prior Period due to:
Local price & product mix - %
Currency 3
Volume 1
Portfolio & other -
Total 4 %
Water & Protection net sales were $1,328 million for the three months ended
March 31, 2021 , up from $1,276 million for the three months ended March 31, 2020
driven by a 3 percent favorable impact from currency and volume growth of 1
percent. Local price and portfolio remained flat. Strong volume gains in Water
Solutions and increased demand within Shelter Solutions residential construction
and do-it-yourself applications were offset by volume declines in Safety
Solutions.
Operating EBITDA was $355 million for the three months ended March 31, 2021 ,
flat compared with $357 million for the three months ended March 31, 2020 as
volume gains and productivity actions were offset by higher manufacturing and
supply chain costs.
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MOBILITY & MATERIALS
The Mobility & Materials segment provides high-performance engineering resins
and adhesives to engineers and designers in the transportation, electronics,
industrial and consumer end-markets to enable systems solutions for demanding
applications and environments. The segment delivers a broad range of
polymer-based high-performance materials in its product portfolio, including
elastomers and thermoplastic and thermoset engineering polymers which are used
by customers to fabricate components for mechanical, chemical and electrical
systems. In addition, the segment supplies key materials for the manufacturing
of photovoltaic cells and panels, including backsheet materials and silicone
encapsulates and adhesives. The segment provides specialty pastes and films used
in consumer electronics, automotive, and aerospace markets. Mobility & Materials
is a global leader of advanced materials that provides technologies that
differentiate customers' products with improved performance characteristics
enabling the transition to hybrid-electric-connected vehicles and high speed
high frequency connectivity.
Mobility & Materials Three Months Ended
In millions March 31, 2021 March 31, 2020
Net sales $ 1,215 $ 1,091
Operating EBITDA $ 278 $ 215
Equity earnings $ 3 $ 1
Mobility & Materials Three Months Ended
Percentage change from prior year March 31, 2021
Change in Net Sales from Prior Period due to:
Local price & product mix 1 %
Currency 3
Volume 7
Portfolio & other -
Total 11 %
Mobility & Materials net sales were $1,215 million for the three months ended
March 31, 2021 , up from $1,091 million for the three months ended March 31,
2020 . Net sales increased due to a 7 percent increase in volume, a 3 percent
favorable currency impact and a 1 percent increase in local price. Volume growth
was driven by gains in Performance Resins and Advanced Solutions attributable to
the continued recovery of the global automotive market as well as strong demand
for microcircuit materials. Engineering Polymers volume declined due to global
supply constraints on key raw materials.
Operating EBITDA was $278 million for the three months ended March 31, 2021 , up
29 percent compared with $215 million for the three months ended March 31, 2020
driven by volume gains and cost savings from productivity actions.
Corporate
Corporate includes certain enterprise and governance activities including
non-allocated corporate overhead costs and support functions, leveraged
services, non-business aligned litigation expenses and other costs not absorbed
by reportable segments. The sales and activity of to be divested and previously
divested businesses including the operations of Biomaterials, Clean
Technologies, and Solamet® business units, and the trichlorosilane business
("TCS Business") along with its equity ownership interest in DC HSC Holdings LLC
and Hemlock Semiconductor L.L.C. (the "HSC Group ") historically included in the
Non-Core segment are reflected as Corporate activity.
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CHANGES IN FINANCIAL CONDITION
Liquidity & Capital Resources
Information related to the Company's liquidity and capital resources can be
found in the Company's 2020 Annual Report, Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Liquidity and Capital Resources. Discussion below provides the updates to this
information for the three months ended March 31, 2021 .
The Company continually reviews its sources of liquidity and debt portfolio and
may make adjustments to one or both to ensure adequate liquidity and increase
the Company's optionality and financing efficiency as it relates to financing
cost and balancing terms/maturities. The Company's primary source of incremental
liquidity is cash flows from operating activities. Management expects the
generation of cash from operations and the ability to access the debt capital
markets and other sources of liquidity will continue to provide sufficient
liquidity and financial flexibility to meet the Company's and its subsidiaries
obligations as they come due.
In millions March 31, 2021 December 31, 2020
Cash, cash equivalents, and marketable securities $ 6,385 $ 2,544
Total debt $ 12,622 $ 15,612
The Company's cash, cash equivalents, and marketable securities at March 31,
2021 and December 31, 2020 were $6.4 billion and $2.5 billion , respectively, of
which $1.9 billion at March 31, 2021 and $1.8 billion at December 31, 2020 were
held by subsidiaries in foreign countries, including United States territories.
For each of its foreign subsidiaries, the Company makes an assertion regarding
the amount of earnings intended for permanent reinvestment, with the balance
available to be repatriated to the United States .
Total debt at March 31, 2021 and December 31, 2020 was $12.6 billion and $15.6
billion , respectively. The decrease was primarily due to the termination and
repayment of the Company's $3 billion Term Loan Facilities in the first quarter
of 2021.
As of March 31, 2021 , the Company is contractually obligated to make future cash
payments of $12,702 million and $6,457 million associated with principal and
interest, respectively, on debt obligations. Related to the principal balance,
$2,000 million , which relates to the May 2020 Notes, will be redeemed on May 13,
2021 and the remainder will be due subsequent to March 31, 2022 . Related to
interest, $525 million will be due in the next twelve months and the remainder
will be due subsequent to March 31, 2022 . The decrease in debt and interest
obligations since December 31, 2020 is due to the release of obligations
associated with the N&B Notes Offering that were separated from the Company on
February 1, 2021 , upon consummation of the N&B Transaction. This resulted in
$6,250 million of principal, mostly due subsequent to 2025, and related $2,637
million of future interest obligations being separated from the Company.
Special Cash Payment
In connection with and in accordance with the terms of the N&B Transaction,
prior to consummation of the Exchange Offer and the N&B Merger, DuPont received
a one-time cash payment of approximately $7.3 billion , (the "Special Cash
Payment"), which is subject to post-closing adjustment pursuant to the terms of
the N&B Separation and Distribution Agreement. The Company utilized the Special
Cash Payment to repay the $3 billion Term Loan Facilities and will use a portion
of the Special Cash Payment to redeem the May 2020 Notes, as discussed below.
Term Loan and Revolving Credit Facilities
In November 2018 , the Company entered into a term loan agreement that
establishes two term loan facilities in the aggregate principal amount of $3
billion , (the "Term Loan Facilities") as well as a five-year $3 billion
revolving credit facility (the "Five-Year Revolving Credit Facility"). Effective
May 2, 2019 , the Company fully drew the two Term Loan Facilities in the
aggregate principal amount of $3.0 billion and the Five-Year Revolving Credit
Facility became effective and available. The Five-Year Revolving Credit Facility
is generally expected to remain undrawn, and serve as a backstop to the
Company's commercial paper and letter of credit issuance.
On February 1, 2021 , the Company terminated its fully drawn $3 billion Term Loan
Facilities. The termination triggered the repayment of the aggregate outstanding
principal amount of $3 billion , plus accrued and unpaid interest through and
including January 31, 2021 . The Company funded the repayment with proceeds from
the Special Cash Payment.
On
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Revolving Credit Facility") expired mid-April. As of the effectiveness of the
2021 $1B Revolving Credit Facility, the 2020 $1B Revolving Credit Facility was
terminated. The $1B Revolving Credit facility may be used for general corporate
purposes.
May Debt Offering
On May 1, 2020 , the Company completed an underwritten public offering of senior
unsecured notes (the "May 2020 Notes") in the aggregate principal amount of $2
billion of 2.169 percent fixed rate Notes due May 1, 2023 (the "May Debt
Offering"). Upon consummation of the N&B Transaction, the special mandatory
redemption feature of the May Debt Offering was triggered, requiring the Company
to redeem all of the May 2020 Notes at a redemption price equal to 100% of the
aggregate principal amount of the May 2020 Notes plus accrued and unpaid
interest. On May 3, 2021 , the Company provided notice that it will redeem the
May 2020 Notes on May 13, 2021 . The Company will fund the redemption with
proceeds from the Special Cash Payment.
Laird Performance Materials
On March 8, 2021 , the Company announced that it had entered into a definitive
agreement with Advent International to acquire Laird Performance Materials for
$2.3 billion . The acquisition is expected to close in the third quarter of 2021,
subject to regulatory approvals and other customary closing conditions, and will
be part of the Electronic & Industrials segment. The Company intends to pay for
the acquisition from existing cash balances.
Credit Ratings
The Company's credit ratings impact its access to the debt capital markets and
cost of capital. The Company remains committed to a strong financial position
and strong investment-grade rating. At April 30, 2021 , DuPont 's credit ratings
were as follows:
Credit Ratings Long-Term Rating Short-Term Rating Outlook
Standard & Poor's BBB+ A-2 Stable
Moody's Investors Service Baa1 P-2 Stable
Fitch Ratings BBB+ F-2 Stable
The Company's indenture covenants related to its 2018 Senior Notes and May 2020
Notes contains certain limitations on the Company's ability to incur liens and
enter into sale lease-back transactions, mergers and consolidations as well as
customary events of default. The Five-Year Revolving Credit Facility and the
2020 and 2021 $1B Revolving Credit Facilities contain a financial covenant,
typical for companies with similar credit ratings, requiring that the ratio of
Total Indebtedness to Total Capitalization for the Company and its consolidated
subsidiaries not exceed 0.60. At March 31, 2021 , the Company was in compliance
with this financial covenant.
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