Sapiens to Announce Fourth Quarter and Full Year 2020 Financial Results on February 25, 2021

PR Newswire

HOLON, Israel, Feb. 9, 2021 /PRNewswire/ — Sapiens International Corporation (NASDAQ: SPNS) (TASE: SPNS), a leading global provider of software solutions for the insurance industry, announced today that it will report its financial results for the fourth quarter and full year ended December 31, 2020 on Thursday, February 25, 2021.

Sapiens logo

The Company will host a conference call and webcast on February 25, 2021, to review and discuss Sapiens’ results at:

9:30 a.m. ET 
2:30 p.m. GMT 
4:30 p.m.Israel time

To participate, please use the following numbers (at least 10 minutes prior to the scheduled time):

United States (toll-free): + 1-888- 642-5032
United Kingdom: 0-800-917-5108
International: +972-3-918-0609

The live webcast of the call can be accessed on Sapiens’ website at https://www.sapiens.com/investor-relations/ir-events-presentations/.

If you are unable to join live, a replay of the call will be accessible until March8, 2021, as follows: United States and Canada: +1-877-456-0009; International: +972-3-925-5900.

A recorded version of the webcast will also be available at: https://www.sapiens.com/investor-relations/ir-events-presentations/ for a period of three months.

About Sapiens

Sapiens International Corporation empowers insurers to succeed in an evolving industry. The company offers digital software platforms, solutions and services for the property & casualty, life, pension & annuity, reinsurance, financial & compliance, workers’ compensation and financial markets. With more than 35 years of experience delivering to over 600 organizations globally, Sapiens has a proven ability to satisfy customers’ core, data and digital requirements. For more information: www.sapiens.com 

Investor Contact:

Daphna Golden

Vice President, Investor Relations at Sapiens
[email protected] 

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SOURCE Sapiens International Corporation

39 Outstanding Jereh Staff Rewarded with Automobiles

PR Newswire

YANTAI, China, Feb. 9, 2021 /PRNewswire/ — 2020 Jereh Golden KeyCar Award ceremony was held at Jereh headquarters of Yantai and 39 outstanding employees received cars. By now, the award has been issued for 13 years, with a total of 407 cars worth 56 million Yuan.

The “Golden Key Car Award” was established in 2008 to motivate employees with outstanding performance in different positions. They can be junior staff, front-line workers, R&D, or sales.

There are always opportunities for those who work hard. There are over 40 types of incentive measures such as equity, yacht, innovation awards and instant incentives to reward their dedication and excellent output.

At the ceremony, the award-winning employees were excited and proud. One of them Mr. Liu shared his joy, “the coronavirus brings a ripple effect on various aspects of society. Our electrostatic spraying technology was quickly applied for epidemic prevention and disinfection. It only took 3 months to complete the research and development of the handheld electrostatic spray gun, and realized the independent research and development of the handheld electrostatic spray equipment. At Jereh, I made it and was so proud of my team.” 

In 2020, Jereh delivered a new layout for high-quality development. It had a steady growth in sectors including well service equipment, natural gas compressor, environmental management, energy services, industrial services and EPC. Also it actively expanded new businesses of high-end electrostatic disinfection equipment and intelligent environmental sanitation equipment.

“It is the hard work of Jereh staff that make Jereh stands out. We create wealth and are willing to share it with them,” said Mrs. Wang Chunyan, Chairwoman of Jereh Labor Union. “We are building a platform that benefit talent growth, so more talents can join us and realize their value.”

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SOURCE Jereh Group

Grace Announces Increased Quarterly Dividend

COLUMBIA, Md., Feb. 09, 2021 (GLOBE NEWSWIRE) — W. R. Grace & Co. (NYSE:GRA) today announced that it has declared a quarterly cash dividend of $0.33 per common share. The dividend, payable March 23, 2021 to shareholders of record at the close of business on March 2, 2021, reflects approval by the Board of Directors of a 10 percent increase in the company’s regular annual cash dividend, from $1.20 per common share to $1.32 per common share.

The declaration of any dividends falls within the discretion of the Board, taking into account such considerations as the Board may deem relevant at the time including, without limitation, the company’s financial condition, financial performance, available liquidity, and applicable legal requirements.

About Grace

Built on talent, technology, and trust, Grace is a leading global specialty chemical company. The company’s two industry-leading business segments—Catalysts Technologies and Materials Technologies—provide innovative products, technologies, and services that enhance the products and processes of our customers around the world. With approximately 4,000 employees, Grace operates and/or sells to customers in over 60 countries. More information about Grace is available at grace.com.

Media Relations

Caitlin Leopold
T +1 410.531.8870
[email protected]

Investor Relations

Jason Hershiser
T +1 410.531.8835
[email protected]



Cenovus reports 2020 fourth-quarter and full-year results

CALGARY, Alberta, Feb. 09, 2021 (GLOBE NEWSWIRE) — Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) responded to extreme oil price volatility in 2020 by quickly reducing capital spending as well as strategically managing oil sands production and purchasing curtailment credits to achieve increased output when prices were more favourable. The company generated positive free funds flow in the fourth quarter, partially offsetting the impact of low oil prices on its full-year results. Cenovus’s planned combination with Husky Energy, announced in the fourth quarter, closed January 1, 2021. The company exited 2020 with net debt of $7.2 billion.

“In a year of unprecedented challenges for our industry, we demonstrated the flexibility, strength and reliability of our operations by adapting our capital and operating plans, including leveraging the dynamic storage capabilities of our oil sands reservoirs, transportation optionality and marketing activities to help preserve liquidity,” said Alex Pourbaix, Cenovus President & Chief Executive Officer. “We believe our compelling combination with Husky will provide even greater ability to reduce free funds flow volatility and accelerate debt reduction and returns to shareholders.”

Cenovus released its 2021 budget in late January. The budget includes sustaining capital of approximately $2.1 billion to deliver upstream production of approximately 755,000 barrels of oil equivalent per day (BOE/d) and downstream throughput of approximately 525,000 barrels per day (bbls/d). The company also expects to achieve nearly $1 billion of synergies this year as a result of the recent transaction with Husky, putting Cenovus firmly on track to reach its planned $1.2 billion in annual run-rate synergies by the end of 2021.

Financial & production summary
(for the period ended December 31)

2020

Q4
2019
Q4
% change 2020

Full year
2019
Full year
% change
Financial ($ millions, except per share amounts)          
Cash from (used in) operating activities 250 740 -66 273 3,285 -92
Adjusted funds flow1, 2 341 687 -50 147 3,702 -96
Per share diluted 0.28 0.56   0.12 3.01  
Free funds flow1, 2 99 370 -73 -694 2,526  
Operating earnings (loss)1 -551 -164   2,604 456  
Per share diluted -0.45 -0.13   -2.12 0.37  
Net earnings (loss) -153 113   -2,379 2,194  
Per share diluted -0.12 0.09   -1.94 1.78  
Capital investment 242 317 -24 841 1,176 -28
           
Production (before royalties)          
Oil sands (bbls/d) 380,693 374,132 2 381,723 354,257 8
Conventional liquids3 (bbls/d) 24,587 26,197 -6 26,757 26,673  
Total liquids

3

(bbls/d)
405,280 400,329 1 408,480 380,930 7
Total natural gas (MMcf/d) 369 403 -8 379 424 -11
Total production (BOE/d) 467,202 467,448   471,740 451,680 4

1 Adjusted funds flow, free funds flow and operating earnings/loss are non-GAAP measures. See Advisory.
2 The prior period has been reclassified to conform with the current period treatment of non-cash inventory write-downs.
3 Includes oil and natural gas liquids (NGLs).

Health and safety performance

In response to the COVID-19 pandemic in 2020, Cenovus moved to essential staffing at its field sites and gave office staff the flexibility to work remotely, followed by mandatory work-from-home measures for its office staff based on evolving guidance from public health officials. The company also established comprehensive COVID-19 protocols, including enhanced cleaning and physical distancing measures. Staffing levels have now largely returned to normal at Cenovus’s field operations and the company continues to evolve COVID-19 measures at all its worksites based on the direction of government, public health officials and the company’s internal health and safety experts.

In 2020, Cenovus continued to deliver industry-leading safety performance through its culture of continuous improvement and focus on risk management and asset integrity. The company achieved year-over-year improvements at its operations for significant incident frequency (SIF) and process safety events. The company recorded a SIF of 0.01 compared with 0.14 in the previous year and two process safety events compared with eight in 2019.

Business flexibility and financial discipline

With significantly reduced global oil demand due to the COVID-19 pandemic, benchmark oil prices faced unprecedented volatility in 2020, resulting in the company’s average realized crude oil sales price of $28.82 per barrel (bbl) compared with $53.95/bbl the previous year.

To preserve its financial resilience, in March and April Cenovus reduced its planned 2020 capital spending by a total of about 43%. Anticipating the beginning of a recovery in commodity prices during the second quarter, the company proactively acquired curtailment credits to increase output above the Government of Alberta’s mandatory production limits and leveraged the flexibility of its business to ramp production back up. This included reaching peak production rates at the company’s oil sands operations in June and restarting its crude-by-rail program to maximize cash flows in response to tighter Alberta light-heavy oil differentials and the further strengthening of commodity prices later in the year.

Financial results

Cenovus recorded cash from operating activities of $273 million in 2020 compared with $3.3 billion in 2019. The company generated full-year adjusted funds flow of $147 million compared with $3.7 billion a year earlier. It reported a free funds flow shortfall of $694 million in 2020, largely driven by the collapse in crude oil prices, compared with free funds flow of $2.5 billion in 2019. Cenovus generated free funds flow of $99 million in the fourth quarter of 2020, which included a $100 million ($0.08 per share) non-cash provision related to the Keystone XL pipeline project.

The company had a full-year operating loss of $2.6 billion and a net loss of $2.4 billion compared with operating earnings of $456 million and net earnings of $2.2 billion in 2019. The operating loss was due, in part, to higher depreciation, depletion, and amortization (DD&A) that included impairment charges of $555 million in the Conventional business due to lower forward commodity prices and changes to future development plans as well as an impairment charge of $450 million associated with the Borger Refinery, which the company co-owns with the operator, Phillips 66. In the fourth-quarter of 2020 compared with the same period a year earlier, Cenovus had an operating loss of $551 million compared with an operating loss of $164 million and a net loss of $153 million compared with net earnings of $113 million.

Cenovus exited 2020 with net debt of $7.2 billion and $4.5 billion of available committed credit facilities. Following the close of the Husky transaction on January 1, 2021, the company had net debt of approximately $13.1 billion, including the fair valuation of Husky’s debt upon close, as well as $8.2 billion in available committed credit facilities with no maturities on its long-term bonds until April 2022.

Following the completion of the transaction with Husky, Cenovus received credit rating upgrades. Moody’s Investors Service upgraded Cenovus to investment grade Baa3 with a ‘negative’ outlook from Ba2 with a ‘negative’ outlook, while DBRS Limited upgraded the company to BBB from BBB (low), with a ‘stable’ trend. At S&P Global Ratings, Cenovus’s BBB- rating was confirmed and the outlook revised to ‘stable’ from ‘negative’. Fitch Ratings maintained its BB+ rating with a return to a ‘positive’ outlook.

Operating highlights

Cenovus’s upstream and refining assets continued to deliver safe and reliable operational performance throughout 2020. Planned maintenance and repair work at the company’s oil sands operations partially offset production increases. Cenovus expanded the original planned scope for its Conventional drilling program, while remaining within the range of its reduced 2020 budget. The company’s refining assets ran at reduced crude oil run rates due to lower refined product demand and pricing resulting from the COVID-19 pandemic.

Oil sands

In 2020, Cenovus achieved average oil sands production of 381,723 bbls/d for the year, up 8% from 354,257 bbls/d in 2019 when Cenovus volumes were reduced to match limits under the Government of Alberta’s curtailment program. Fourth quarter production increased 2% to 380,693 bbls/d from the same period a year earlier as the company purchased production curtailment credits to produce above the government’s output limits before mandatory curtailment ended in early December.

Oil sands operating margin declined in 2020 to $1.1 billion from $3.5 billion in 2019, largely due to lower average realized crude oil sales prices, the use of higher priced condensate when the market was declining early in the year and realized risk management losses of $268 million compared with $23 million in 2019.

Non-fuel per-unit operating costs in 2020 declined 13% at Christina Lake and 4% at Foster Creek compared with 2019. Combined full-year oil sands per-unit operating costs were $7.84/bbl, down 4% from the previous year. The year-over-year reduction in per-barrel costs was primarily due to increased volumes, lower turnaround costs at Christina Lake in 2020 compared with the previous year and reduced repairs and maintenance activity at Foster Creek with the implementation of COVID-19 safety measures that limited site personnel numbers to help curb potential spread of the virus. Total oil sands per-unit operating costs were $8.70/bbl in the fourth quarter, up 8% from the same quarter in 2019, driven largely by higher natural gas prices and increased repairs and maintenance costs, primarily related to a planned turnaround at Christina Lake and planned maintenance and operational outages at Foster Creek.

After suspending its crude-by-rail program in early 2020, Cenovus ramped up activity in the fourth quarter to take advantage of improving market conditions. With resumption of the rail program, Cenovus exited December with average loading of nearly 28,000 bbls/d of its own crude oil for transport by rail for the month plus nearly 10,000 bbls/d for third parties. For the full year, the company loaded an average of more than 30,000 bbls/d of which more than 29,000 bbls/d were Cenovus volumes.

Cenovus’s oil sands facilities continue to operate at industry-leading steam-to-oil ratios (SORs). At Christina Lake, the full-year 2020 SOR was approximately 2.0, unchanged from 2019. The SOR at Foster Creek was 2.8, consistent with the previous year. The company continues to optimize steam use across its oil sands operations to minimize SORs and greenhouse gas emissions intensity through continuous improvement in operational practices and the application of technology.

Conventional

Conventional production averaged 89,932 BOE/d in 2020, an 8% decrease from full-year 2019. The year-over-year decrease was due to natural declines from reduced capital investment, partially offset by production from the Marten Hills heavy oil asset. Cenovus successfully divested Marten Hills in the fourth quarter of 2020 and has maintained an interest in the asset through its investment in Headwater Exploration Inc., which acquired the property, as well as a gross overriding royalty that allows Cenovus to benefit from future development.

Cenovus increased capital investment for Conventional by $30 million in the fourth quarter, relative to its revised 2020 guidance issued in April, to conduct a two-rig drilling program. The program is targeting low-risk, high-return development wells near natural gas plants owned and operated by the company, to take advantage of higher commodity prices during the winter heating season. Notwithstanding the increase, full-year capital investment in the company’s Conventional segment of $78 million was 24% lower than in 2019, primarily due to reduced expenditures for facilities as well as lower overall drilling and completions. The company continues to take a disciplined approach to the development of its Conventional assets.

Total Conventional operating costs decreased 6% to $318 million in 2020 compared with 2019. Per-barrel operating costs averaged $8.99/BOE compared with $8.79/BOE in 2019, primarily due to an 8% decrease in sales volumes, partially offset by optimizing operations, focusing on critical repairs and maintenance activities and leveraging the company’s processing and pipeline infrastructure.

Refining and marketing

At Cenovus’s Wood River, Illinois and Borger, Texas refineries, which are co-owned with the operator Phillips 66, crude oil runs were reduced compared with 2019 in response to lower product demand and pricing due to the COVID-19 pandemic. Crude runs averaged 372,000 bbls/d in 2020, a decrease of 16% from 2019.

Cenovus had a full-year refining and marketing operating margin shortfall of $388 million, compared with an operating margin of $737 million in 2019. The decrease was primarily due to reduced market crack spreads, lower crude oil runs and crude advantage, partially offset by lower operating costs. The fourth quarter refining and marketing operating margin shortfall was $73 million, compared with an operating margin of $109 million in the same quarter of 2019.

Cenovus’s refining operating margin is calculated on a first-in, first-out (FIFO) inventory accounting basis. Using the last-in, first-out (LIFO) accounting method employed by most U.S. refiners, operating margin from refining and marketing would have been $124 million lower in 2020, compared with $140 million lower in 2019.

Sustainability

Cenovus remains committed to world-class safety performance and environmental, social and governance (ESG) leadership. This includes an ongoing commitment to transparent performance reporting, an ambition to achieve net zero emissions by 2050 and a plan to set ambitious new ESG targets for the combined company later in 2021.

Reserves

Cenovus’s proved and probable reserves are evaluated each year by independent qualified reserves evaluators (IQREs). At the end of 2020, Cenovus’s proved reserves decreased 1% to approximately 5.0 billion BOE, while proved plus probable reserves decreased 3% to about 6.7 billion BOE. Proved bitumen reserves were approximately 4.8 billion barrels, largely unchanged from 2019, while proved plus probable bitumen reserves decreased 1% to approximately 6.3 billion barrels. Cenovus’s reserve life index (RLI) for proved reserves is approximately 29 years, and its RLI for proved plus probable reserves is approximately 39 years.

Cenovus’s 2020 proved reserves finding and development (F&D) costs were $4.82/BOE, excluding changes in future development costs, down 36% from 2019 and reflect decreased capital spending. Three-year average proved reserves F&D costs were $5.16/BOE, excluding changes in future development costs.

More details about Cenovus’s reserves and other oil and gas information is available in the Advisory, the company’s Management’s Discussion & Analysis (MD&A), Annual Information Form (AIF) and Annual Report on Form 40-F for the year ended December 31, 2020, which are available on SEDAR at sedar.com, EDGAR at sec.gov and Cenovus’s website at cenovus.com.

Dividend

For the first quarter of 2021, the Board of Directors declared a dividend of $0.0175 per share, payable on March 31, 2021 to common shareholders of record as of March 15, 2021. The Board also declared a first quarter dividend on each of the Cumulative Redeemable First Preferred Shares – Series 1, Series 2, Series 3, Series 5 and Series 7 – payable on March 31, 2021, to shareholders of record as of March 15, 2021 as follows:

Preferred shares dividend summary
(for the period ended March 31)

Rate (%)     Amount ($/share)
Share series        
Series 1 2.404     0.15025
Series 2 1.839     0.11336
Series 3 4.869     0.29306
Series 5 4.591     0.28694
Series 7 3.935     0.24594

All dividends paid on Cenovus’s common and preferred shares will be designated as “eligible dividends” for Canadian federal income tax purposes. Declaration of dividends to common shareholders is at the sole discretion of the Board and will continue to be evaluated on a quarterly basis.

Cenovus year-end disclosure documents

Today, Cenovus is filing its audited Consolidated Financial Statements, MD&A and AIF with Canadian securities regulatory authorities. The company is also filing its Annual Report on Form 40-F for the year ended December 31, 2020 with the U.S. Securities and Exchange Commission. Copies of these documents will be available today on SEDAR at sedar.com, EDGAR at sec.gov (for the Form 40-F) and the company’s website at cenovus.com under Investors. They can also be requested free of charge by email at [email protected].

Husky year-end disclosure documents

Today, Husky Energy Inc., which became a wholly owned subsidiary of Cenovus on January 1, 2021, is filing its audited Consolidated Financial Statements, MD&A and AIF with Canadian securities regulatory authorities. Husky is also filing its Annual Report on Form 40-F for the year ended December 31, 2020 with the U.S. Securities and Exchange Commission. Copies of these documents will be available today on SEDAR at sedar.com, EDGAR at sec.gov (for the Form 40-F) and Husky’s website at huskyenergy.com under Investors.

ADVISORY

Basis of Presentation

Cenovus reports financial results in Canadian dollars and presents production volumes on a net to Cenovus before royalties basis, unless otherwise stated. Cenovus prepares its financial statements in accordance with International Financial Reporting Standards (IFRS).

Barrels of Oil Equivalent

Natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value.

Finding and Development Costs

Finding and development (F&D) costs are calculated by dividing the sum of total exploration and development costs incurred in 2020 in respect of the relevant product types by the sum of total additions and revisions for the applicable category of reserves in the same period. The additions and revisions for the applicable category of reserves for the period are determined by Cenovus’s IQREs, effective December 31, 2020, and for purposes of determining F&D costs, exclude changes resulting from acquisitions, dispositions and production. F&D costs provide an indication of the unit cost of finding and developing new reserves. F&D costs do not have a standardized meaning and are defined differently by different companies and as such are not comparable to similar measures presented by other issuers.

Reserves Estimates

Estimates of reserves referenced in this release were prepared effective December 31, 2020 by IQREs, based on the Canadian Oil and Gas Evaluation Handbook and in compliance with the requirements of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Estimates are presented using an average of the January 1, 2021 price forecasts from three IQREs. For additional information about Cenovus’s reserves and other oil and gas information, see “Reserves Data and Other Oil and Gas Information” in Cenovus’s AIF and Annual Report on Form 40-F for the year ended December 31, 2020 (available on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus’s website at cenovus.com).

Non-GAAP Measures and Additional Subtotal

This news release contains references to adjusted funds flow, free funds flow, operating earnings (loss) and net debt, which are non-GAAP measures, and operating margin, which is an additional subtotal found in Note 1 of Cenovus’s Audited Consolidated Financial Statements for the year ended December 31, 2020 (available on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus’s website at cenovus.com). These measures do not have a standardized meaning as prescribed by IFRS. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS. These measures are defined differently by different companies and therefore are not comparable to similar measures presented by other issuers. For definitions, as well as reconciliations to GAAP measures, and more information on these and other non-GAAP measures and additional subtotals, refer to “Non-GAAP Measures and Additional Subtotals” on page 1 of Cenovus’s MD&A for the period ended December 31, 2020 (available on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus’s website at cenovus.com).

Forward-Looking Information

This news release contains certain forward-looking statements and forward-looking information (collectively referred to as “forward-looking information”) within the meaning of applicable securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995, about Cenovus’s current expectations, estimates and projections about the future of the combined company, based on certain assumptions made in light of experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct.

Forward-looking information in this document is identified by words such as “achieve”, “ambition”, “ambitious”, “committed”, “commitment”, “continue”, “deliver”, “expect”, “on track”, “plan”, “remain”, “target” and “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to statements about: Cenovus’s positioning to reduce free funds flow volatility, strengthen its balance sheet, accelerate the pace of deleveraging and returns to shareholders; upstream production and downstream throughput; achieving synergies as a result of the Husky transaction by the end of 2021; continued development of COVID-19 pandemic measures at Cenovus’s worksites; Cenovus’s approach to operations of its oil sands assets and the development of its Conventional assets; commitments to world-class safety performance and ESG leadership, including Cenovus’s commitment to transparent performance reporting, its ambition to achieve net zero emissions by 2050 and plans to set new ESG targets for the combined company; and all statements related to the company’s 2021 guidance.

Statements relating to “reserves” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated, and can be profitably produced in the future. Readers are cautioned that the term “reserves life index” may be misleading, particularly if used in isolation. This measure is used for consistency with other oil and gas companies and does not reflect the actual life of the reserves.

Developing forward-looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which the forward-looking information is based include, but are not limited to: Cenovus’s ability to realize the anticipated benefits of the Husky transaction and to successfully integrate the business of Husky, including new business activities, assets, operating areas, regulatory jurisdictions, personnel and business partners for Cenovus; the accuracy of any assessments undertaken in connection with the Husky transaction and any resulting pro forma information; forecast oil and natural gas, NGLs, condensate and refined products prices, and light-heavy crude oil price differentials; projected capital investment levels and associated sources of funding; applicable royalty regimes, including expected royalty rates; future improvements in availability of product transportation capacity; increase to Cenovus’s share price and market capitalization over the long term; the sufficiency of existing cash balances, internally generated cash flows, existing credit facilities, management of Cenovus’s asset portfolio and access to capital markets to fund current and future obligations; production from Cenovus’s Conventional segment will provide an economic hedge for the natural gas required as a fuel source at both Cenovus’s oil sands and refining operations; future narrowing of crude oil differentials; the ability of Cenovus’s refining capacity, dynamic storage, existing pipeline commitments, financial hedge transactions and plans to ramp up crude-by-rail loading capacity to partially mitigate a portion of Cenovus’s Western Canadian Select (WCS) crude oil volumes against wider differentials; Cenovus’s ability to produce from oil sands facilities on an unconstrained basis; estimates of quantities from properties and other sources not currently classified as proved; the accuracy of accounting estimates and judgments; Cenovus’s ability to obtain necessary regulatory and partner approvals; the successful, timely and cost effective implementation of capital projects, development programs or stages thereof; estimated abandonment and reclamation costs, including associated levies and regulations applicable thereto; Cenovus’s ability to obtain and retain qualified staff and equipment in a timely and cost-efficient manner; Cenovus’s ability to access sufficient capital and insurance coverage to pursue development plans; the political, economic and social stability of jurisdictions in which Cenovus operates; the absence of significant disruption of operations, including as a result of harsh weather, natural disaster, accident, civil unrest or other similar events; forecast inflation and other assumptions inherent in Cenovus’s 2021 guidance available on cenovus.com; Cenovus’s ability to access and implement all technology and equipment necessary to achieve expected future results, and that such results are realized.

The risk factors and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to: the effect of the COVID-19 pandemic on Cenovus’s business, including any related restrictions, containment, and treatment measures taken by varying levels of government in the jurisdictions in which we operate; the success of Cenovus’s COVID-19 pandemic workplace policies; Cenovus’s ability to realize the anticipated benefits of the Husky transaction and to successfully integrate Husky’s business with its own in a timely manner and cost effective manner or at all; unforeseen or undisclosed liabilities associated with, and accuracy of any assessments undertaken in connection with, the Husky transaction and any resulting pro forma information; the accuracy of historical information provided by Husky; the effect of the Husky transaction on relationships with customers, suppliers and other third parties; Cenovus’s ability to access or implement some or all of the technology necessary to efficiently and effectively operate its assets and achieve expected future results; the impact of production agreements among OPEC and non-OPEC members; foreign exchange risk, including related to agreements denominated in foreign currencies; the effectiveness of Cenovus’s risk management program, including the impact of derivative financial instruments, the success of hedging strategies and the sufficiency of Cenovus’s liquidity position; the accuracy of estimates regarding commodity prices, operating and capital costs, currency and interest rates; lack of alignment of realized WCS prices and WCS prices used to calculate the contingent payment to ConocoPhillips; product supply and demand; the accuracy of Cenovus’s share price and market capitalization assumptions; market competition, including from alternative energy sources; risks inherent in Cenovus’s marketing operations; risks inherent in the operation of Cenovus’s crude-by-rail terminal, including health, safety and environmental risks; Cenovus’s ability to maintain desirable ratios of net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and net debt to capitalization; Cenovus’s ability to access various sources of insurance coverage and debt and equity capital, generally, and on acceptable terms; Cenovus’s ability to finance growth, capital expenditures and dividends, including any increases thereto; changes in credit ratings applicable to Cenovus or any of its securities; the accuracy of reserves estimates, future production and future net revenue estimates; the accuracy of accounting estimates and judgments; Cenovus’s ability to replace and expand oil and gas reserves; the costs to acquire exploration rights, undertake geological studies, appraisal drilling and project development; Cenovus’s ability to maintain relationships with its partners and to successfully manage and operate its integrated operations and businesses; reliability of Cenovus’s assets ability to successfully complete development programs; refining and marketing margins; the cost and availability of equipment necessary to Cenovus’s operations; potential failure of products to achieve or maintain acceptance in the market; risks associated with the energy industry’s and Cenovus’s reputation, social licence to operate and litigation related thereto; unexpected cost increases or technical difficulties in operating, constructing or modifying production or refining facilities; unexpected difficulties in producing, transporting or refining of bitumen and/or crude oil into petroleum and chemical products; risks associated with technology and equipment and its application to Cenovus’s business, including potential cyberattacks; risks associated with climate change and Cenovus’s assumptions relating thereto; Cenovus’s ability to access markets and secure adequate and cost effective product transportation including sufficient pipeline, crude-by-rail, marine or alternate transportation, including to address any gaps caused by constraints in the pipeline system; availability of, and Cenovus’s ability to attract and retain, critical talent; changes in labour demographics and relationships; government actions to curtail energy operations or pursue broader climate change agendas; adverse changes to, or interpretation of, applicable laws or regulatory frameworks and the impact thereof and the costs associated with compliance; the political, social and economic conditions in the jurisdictions in which Cenovus operates or supplies; the occurrence of unexpected events resulting in operational interruptions, including blowouts, fires, explosions, railcar incidents or derailments, aviation incidents, gaseous leaks, migration of harmful substances, loss of containment, releases or spills, including releases or spills from offshore facilities and shipping vessels at terminals or hubs and as a result of pipeline or other leaks, corrosion, epidemics, pandemics, and catastrophic events, including, but not limited to, war, extreme weather events, natural disasters, iceberg incidents, acts of vandalism and terrorism, and other accidents or hazards that may occur at or during transport to or from commercial or industrial sites and other accidents or similar events; and risks associated with existing and potential future lawsuits, shareholder proposals and regulatory actions against Cenovus.

Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information. For a full discussion of Cenovus’s material risk factors, refer to “Risk Management and Risk Factors” in Cenovus’s MD&A and to the risk factors described in other documents Cenovus files from time to time with securities regulatory authorities in Canada (available on SEDAR at sedar.com, on EDGAR at sec.gov and Cenovus’s website at cenovus.com). Additional information concerning Husky’s business and assets as of December 31, 2020 may be found in Husky’s MD&A and AIF (available on SEDAR at sedar.com and on EDGAR at sec.gov).

Cenovus Energy Inc.

Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans. Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company’s preferred shares are listed on the Toronto Stock Exchange. For more information, visit cenovus.com.

Find Cenovus on Facebook, Twitter, LinkedIn, YouTube and Instagram.

CENOVUS CONTACTS:

Investor Relations

Investor Relations general line
403-766-7711

Media Relations

Media Relations general line
403-766-7751

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/70720fb1-40de-4482-86cd-7c2f26c069ed

https://www.globenewswire.com/NewsRoom/AttachmentNg/f91d4c79-d551-4fe3-98f8-0ceb0589e604

https://www.globenewswire.com/NewsRoom/AttachmentNg/beca83e2-dcc0-4fd4-938c-b78b5e7f1273



DuPont Reports Fourth Quarter 2020 Results

– 4Q20 GAAP EPS from continuing operations of $0.37; adjusted EPS of $0.95

– 4Q20 Net Sales of $5.3 billion, up 1 percent; organic sales flat with the year-ago period

– 4Q20 GAAP Income from continuing operations of $279 million and Operating EBITDA of $1.3 billion

– ~$130 million in non-manufacturing costs savings in the quarter; delivered structural cost take-out target of ~$280 million for the year

– Operating cash flow of $1.3 billion; $1.0 billion free cash flow in the quarter increased 400% from 4Q19

PR Newswire

WILMINGTON, Del., Feb. 9, 2021 /PRNewswire/ — DuPont (NYSE: DD) today announced financial results for the fourth quarter 2020.

“The leading positions we hold in automotive, protective garments, residential construction, semiconductor, and smartphones markets enabled us to capitalize on positive momentum and deliver strong fourth quarter results with sequential volume improvement in all segments,” said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. “Operating leverage and year-over-year operating EBITDA margin expansion in each of our core segments in the fourth quarter is a proof point in our teams’ commitment to execution. Throughout the year we have focused on positioning ourselves for growth through strategic investments, streamlining our overhead structure, improving working capital, and strengthening our balance sheet. This disciplined operating model served us well in 2020 and will be our roadmap for success in 2021.”

“In addition to delivering strong financial results during the quarter, our teams remained laser focused on closing out a number of our strategic priorities,” Breen continued. “Earlier this month, we completed the separation of our Nutrition & Biosciences business and have also signed agreements to divest our Clean Technologies and Solamet businesses(2). These actions unlock significant value for our stakeholders, generate substantial cash flow for the company, and focus our portfolio to three core business segments moving forward. We also made a joint announcement with Corteva and Chemours regarding an agreement to settle legal disputes originating from the 2015 spin-off of Chemours from E.I. du Pont and the pending personal injury claims in the Ohio multi-district litigation. This agreement provides a measure of security and certainty for us and our shareholders regarding any potential exposures related to these legacy matters.”

Fourth Quarter 2020 Results

Net sales totaled $5.3 billion, up 1 percent versus the year-ago period as reported and flat with the year-ago period on an organic(1) basis. The fifth consecutive quarter of year-over-year growth in Electronics & Imaging led by strength in both semiconductors and smartphone technologies, coupled with further recovery in automotive markets, more than offset continued weakness in oil & gas, aerospace and select industrial markets which led to declines in the Safety & Construction segment.

GAAP EPS from continuing operations totaled $0.37 on GAAP income from continuing operations of $279 million, versus GAAP EPS from continuing operations of $0.24 on GAAP income from continuing operations of $191 million in the year-ago period. The improvement is mostly attributable to the absence of a prior year net charge associated with a joint venture, a favorable income tax benefit and lower integration and separation costs partially offset by higher depreciation and amortization and lower segment earnings.

Operating EBITDA(1) was $1.3 billion, down 7 percent versus operating EBITDA(1) in the prior year. Stronger demand in Electronics & Imaging, Nutrition & Biosciences, and Transportation & Industrial as well as approximately $130 million of non-manufacturing cost reductions contributed to operating leverage and operating EBITDA margin expansion in each of our core segments versus the year-ago period. These improvements were more than offset by the absence of prior year discrete gains of approximately $160 million, primarily associated with customer settlements in the Non-Core segment. Adjusted EPS(1) was $0.95 in both the current and the year-ago period. Benefits associated with a lower base tax rate, lower interest expense, and a lower share count were offset by lower segment results.

Operating cash flow of $1.3 billion included improvements in working capital of more than $500 million in the quarter which was driven by improvements across accounts receivable, inventories and accounts payable. Capital expenditures of $272 million resulted in free cash flow(1) of $1.0 billion. For the year, operating cash flow of $4.1 billion and free cash flow of $2.9 billion were enabled by an improvement in working capital of approximately $850 million and capital expenditures of $1.0 billion. Strong cash flow generation throughout the year enabled a greater than $1.8 billion reduction in commercial paper balances to close 2020 with zero commercial paper outstanding.

Fourth Quarter 2020 Segment Highlights

Electronics & Imaging

Electronics & Imaging reported a record quarter with net sales of $1.0 billion, up 9 percent from the year-ago period. Organic sales were up 8 percent driven by a 10 percent growth in volume offset by a 2 percent decline in price. Currency was a 2 percent benefit while portfolio was a 1 percent headwind.

Sales gains were led by Interconnect Solutions as organic sales grew by double-digits, driven by higher material content in premium, next-generation smartphones. Semiconductor Technologies also delivered strong growth in the quarter as new technology ramps across logic and foundry delivered high-single digit volume growth versus the year-ago period. Within Image Solutions, high single-digit organic growth was led by strength in OLEDs for displays and inks for the consumer segment, partially offset by weakness in flexographic plates and inks for commercial and textile printing. 

Operating EBITDA for the segment was $323 million, an increase of 10 percent from operating EBITDA of $293 million in the year-ago period, driven primarily by strong volume growth and continued productivity actions partially offset by the absence of a prior year gain.

Nutrition & Biosciences

Nutrition & Biosciences reported net sales of $1.5 billion, up 3 percent from the year-ago period. Organic sales increased 2 percent with gains in both price and volume. Currency was a 1 percent tailwind and portfolio was flat.

High-single digit organic growth in Food & Beverage was driven by broad-based pricing strength as well as volume gains in protein solutions on increased consumer demand for proteins, including plant-based solutions. The gains in Food & Beverage were partially offset by organic sales declines across Health & Biosciences and Pharma Solutions. Within Health & Biosciences, double-digit growth in both probiotics and home and personal care markets was more than offset by continued weakness in biorefinery and microbial control.

Operating EBITDA for the segment was $341 million, an increase of 8 percent from operating EBITDA of $317 million in the year-ago period. Continued cost productivity actions and favorable mix more than offset raw material cost increases and the impact of lower plant utilization resulting in planned efforts to reduce working capital during the quarter.

Transportation & Industrial

Transportation & Industrial reported net sales of $1.2 billion, up 1 percent from the year-ago period. Organic sales were down 1 percent as volume gains of 3 percent were more than offset by price declines of 4 percent. Currency was a 2 percent benefit and portfolio was neutral.

Organic sales gains in Healthcare & Specialty and Industrial & Consumer were led by mid-to-high single digit volume gains across each business. These gains were more than offset by year-over-year organic sales declines in Mobility Solutions, primarily from price headwinds. Sequentially, organic sales for the segment increased 11 percent versus 3Q 2020 as the global automotive market continued its recovery.

Operating EBITDA for the segment was $317 million, an increase of 14 percent from operating EBITDA of $277 million in the year-ago period, as higher volumes and savings from productivity actions more than offset price declines to deliver a 310 basis point improvement in operating EBITDA margins versus the year-ago period.

Safety & Construction

Safety & Construction reported net sales of $1.2 billion, down 2 percent from the year-ago period. Organic sales were down 6 percent with a 1 percent price improvement offset by a 7 percent decline in volume. Acquisitions in the Water Solutions business increased reported sales by 3 percent and currency was a 1 percent tailwind.

Organic sales gains in Shelter Solutions was more than offset by organic sales declines in Safety Solutions and Water Solutions. Continued recovery in residential construction and on-going strength in retail channels for do-it-yourself applications led to year-over-year volume growth in Shelter Solutions. Within Safety Solutions, demand for Tyvek® protective garments remained strong but was more than offset by soft demand for aramid fibers across aerospace, oil & gas and select industrial markets. Global demand across Water Solutions remains strong however temporary delays in orders associated with select capital projects resulted in volume declines in the quarter.

Operating EBITDA for the segment totaled $310 million, flat with operating EBITDA of $311 million in the year-ago period. Continued productivity actions as well as favorable pricing and product mix was offset by the impact of lower demand.

Non-Core

Non-Core reported net sales of $337 million, down 17 percent from the year-ago period driven by the divestiture of the trichlorosilane business. Organic sales were flat with the year-ago period.

Operating EBITDA for the segment was $19 million, a decrease of 91 percent from operating EBITDA of $216 million in the year-ago period. The year-over-year decline is attributable to the absence of a prior year gain associated with customer settlements in the Hemlock Semiconductor joint venture as well as the absence of the earnings associated with divested businesses.

First Quarter and Full Year 2021 Outlook

Beginning in the first quarter 2021, DuPont will reflect Nutrition & Biosciences as discontinued operations for the current and historical periods. 

“For 2021, we expect net sales between $15.4 and $15.6 billion, an increase of 8 percent at the mid-point versus 2020 net sales of $14.3 billion and operating EBITDA between $3.83 and $3.93 billion, an increase of 13 percent at the mid-point versus 2020 operating EBITDA of $3.4 billion, reflecting anticipated solid top line growth and robust operating EBITDA margin expansion,” said Lori Koch, Chief Financial Officer of DuPont. “Our outlook for full year adjusted EPS is in the range of $3.30 to $3.45 per share, an increase of 68 percent at the mid-point versus 2020 adjusted EPS of $2.01 per share, reflecting the improvement in operating EBITDA, lower interest expense and the benefit of a lower share count.”

“We also expect a strong first quarter of 2021 with net sales between $3.75 and $3.85 billion, an increase of 4 percent at the mid-point versus 1Q 2020 net sales of $3.7 billion, operating EBITDA between $950 and $970 million, an increase of 6 percent at the mid-point versus 1Q 2020 operating EBITDA of $907 million, and adjusted EPS in the range of $0.75 to $0.77 per share, an increase of 58 percent at the mid-point versus 1Q 2020 adjusted EPS of $0.48 per share,” Koch stated.

Conference Call

The Company will host a live webcast of its fourth quarter earnings conference call with investors to discuss its results and business outlook today at 8:00 a.m. ET. The slide presentation that accompanies the conference call will be posted on the DuPont’s Investor Relations Events and Presentations page. A replay of the webcast also will be available on the DuPont’s Investor Relations Events and Presentations page following the live event.

About DuPont

DuPont (NYSE: DD) is a global innovation leader with technology-based materials and solutions that help transform industries and everyday life. Our employees apply diverse science and expertise to help customers advance their best ideas and deliver essential innovations in key markets including electronics, transportation, construction, water, healthcare and worker safety. More information about the company, its businesses and solutions can be found at www.dupont.com. Investors can access information included on the Investor Relations section of the website at www.investors.dupont.com.

DuPont and all products, unless otherwise noted, denoted with TM, SM or ® are trademarks, service marks or registered trademarks of affiliates of DuPont de Nemours, Inc.


Cautionary Statement Regarding Forward Looking Statements 

This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words.

On April 1, 2019, the company completed the separation of its materials science business into a separate and independent public company by way of a pro rata dividend-in-kind of all the then outstanding stock of Dow Inc. (the “Dow Distribution”). The company completed the separation of its agriculture business into a separate and independent public company on June 1, 2019, by way of a pro rata dividend-in-kind of all the then outstanding stock of Corteva, Inc. (the “Corteva Distribution” and together with the Dow Distribution, the “DWDP Distributions”).

On February 1, 2021 the Company completed the divestiture of the Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulting in IFF issuing shares to DuPont stockholders.

Forward-looking statements address matters that are, to varying degrees, uncertain and subject to risks, uncertainties and assumptions, many of which that are beyond DuPont’s control, that could cause actual results to differ materially from those expressed in any forward-looking statements. Forward-looking statements do not guarantee future results. Some of the important factors that could cause DuPont’s actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) ability to achieve anticipated tax treatments in connection with the N&B Transaction or the DWDP Distributions; (ii) changes in relevant tax and other laws; (iii) indemnification of certain legacy liabilities of E. I. du Pont de Nemours and Company (“EID”) in connection with the Corteva Distribution; (iv) risks and costs related to the DWDP Distributions and the N&B Transaction and potential liability arising from fraudulent conveyance and similar laws; (v) risks and costs related to the performance under and impact of the cost sharing arrangement by and between DuPont, Corteva, Inc. and The Chemours Company related to future eligible PFAS costs; (vi) failure to effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio changes, including meeting conditions under the Letter Agreement entered in connection with the Corteva Distribution, related to the transfer of certain levels of assets and businesses; (vii) uncertainty as to the long-term value of DuPont common stock; (viii) potential inability or reduced access to the capital markets or increased cost of borrowings, including as a result of a credit rating downgrade; (ix) risks and uncertainties related to the novel coronavirus (COVID-19) and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities) on DuPont’s business, results of operations, access to sources of liquidity and financial condition which depend on highly uncertain and unpredictable future developments, including, but not limited to, the duration and spread of the COVID-19 outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume; and x) other risks to DuPont’s business, operations and results of operations discussed in DuPont’s annual report on Form 10-K for the year ended December 31, 2019 and its subsequent reports on Form 10-Q and Form 8-K. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. DuPont assumes no obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

Overview

Effective August 31, 2017, E. I. du Pont de Nemours and Company (“EID”) and  The Dow Chemical Company (“TDCC”) each merged with subsidiaries of DowDuPont Inc. (n/k/a “DuPont”) and, as a result, EID and TDCC became subsidiaries of the Company. On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., (“Dow”) including Dow’s subsidiary TDCC (the “Dow Distribution”). On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva, Inc. (“Corteva”) including Corteva’s subsidiary EID, (the “Corteva Distribution and together with the Dow Distribution, the “DWDP Distributions”).

Following the Corteva Distribution, DuPont holds the specialty products business as continuing operations. The results of operations of DuPont for the 2019 interim periods presented reflect the historical financial results of Dow and Corteva as discontinued operations, as applicable. The cash flows related to Dow and Corteva have not been segregated and are included in the Consolidated Statements of Cash Flows for the applicable periods.

On February 1, 2021 the Company completed the divestiture of the Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulting in IFF issuing shares to DuPont stockholders. The results of  the N&B business are included in the continuing operations of DuPont for all periods presented herein, unless otherwise noted.

The unaudited pro forma Consolidated Statements of Operations (discussed in the following section) included herein include costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with Financial Accounting Standards Codification 205, “Presentation of Financial Statements” (“ASC 205”) and thus are reflected in the Company’s results of continuing operations. A significant portion of these costs relate to TDCC and consist of leveraged services provided through service centers, as well as other corporate overhead costs related to information technology, finance, manufacturing, research & development, sales & marketing, supply chain, human resources, sourcing & logistics, legal and communications, public affairs & government affairs functions. These costs are no longer incurred by the Company following the DWDP Distributions.

Unaudited Pro Forma Financial Information

In order to provide the most meaningful comparison of results of operations and results by segment, supplemental unaudited pro forma financial information has been included in the following financial schedules. The unaudited pro forma financial information (the “pro forma financial statements”) is derived from DuPont’s Consolidated Financial Statements and accompanying notes, adjusted to give effect to certain events directly attributable to the DWDP Distributions and DWDP Financings (as defined below). In contemplation of the DWDP Distributions and to achieve the respective credit profiles of each of DuPont, Dow, and Corteva, in the fourth quarter of 2018, DowDuPont consummated a public underwritten offer of eight series of senior unsecured notes (the “2018 Senior Notes”) in the aggregate principal amount of $12.7 billion and entered into a term loan agreement consisting of two term loan facilities (the “Term Loan Facilities”) in the aggregate principal amount of $3.0 billion. In May 2019, the funds from the Term Loan Facilities were drawn, along with the issuance of approximately $1.4 billion in commercial paper (the “Funding CP Issuance” together with the 2018 Senior Notes and Term Loan Facilities, the “DWDP Financings”). The net proceeds from the DWDP Financings together with cash from operations were used to fund cash contributions to Dow and Corteva, and DowDuPont’s $3.0 billion share repurchase program which was completed in the first quarter of 2019 (the “Share Repurchase Program”).

The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the DWDP Distributions and the DWDP Financings (collectively the “DWDP Transactions”), (2) factually supportable and (3) with respect to the Consolidated Statements of Operations, expected to have a continuing impact on the results. The unaudited pro forma Statements of Operations for the year ended December 31, 2019 give effect to the pro forma events as if they had been consummated on January 1, 2018. There were no pro forma adjustments for the three or twelve months ended December 31, 2020 and for the three months ended December 31, 2019.

Restructuring or integration activities or other costs following the DWDP Distributions that may be incurred to achieve cost or growth synergies of DuPont are not reflected. The pro forma financial statements provide shareholders with summary financial information and historical data that is on a basis consistent with how DuPont reports current financial information.

The pro forma financial statements are presented for informational purposes only, and do not purport to represent what DuPont’s results of operations or financial position would have been had the DWDP Transactions occurred on the dates indicated, nor do they purport to project the results of operations or financial position for any future period or as of any future date.

Non-GAAP Financial Measures

This earnings release includes information that does not conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company, including allocating resources. DuPont’s management believes these non-GAAP financial measures are useful to investors because they provide additional information related to the ongoing performance of DuPont to offer a more meaningful comparison related to future results of operations. These non-GAAP financial measures supplement disclosures prepared in accordance with U.S. GAAP, and should not be viewed as an alternative to U.S. GAAP. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided in the Selected Financial Information and Non-GAAP Measures starting on page 13 and on the Investors section of the Company’s website. Non-GAAP measures included in this release are defined below. The Company has not provided forward-looking U.S. GAAP financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most comparable U.S. GAAP financial measures on a forward-looking basis because the Company is unable to predict with reasonable certainty the ultimate outcome of certain future events. These events include, among others, the impact of portfolio changes, including asset sales, mergers, acquisitions, and divestitures; contingent liabilities related to litigation, environmental and indemnifications matters; impairments and discrete tax items. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP results for the guidance period.

Pro forma adjusted earnings per common share from continuing operations – diluted (“Pro forma adjusted EPS”), is defined as pro forma earnings per common share from continuing operations – diluted, excluding the after-tax impact of significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the DWDP Merger, after-tax impact of non-operating pension / other post employment benefits (“OPEB”) benefits / charges and the after-tax impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations. Adjusted earnings per common share from continuing operations – diluted (“Adjusted EPS”), is defined as earnings per common share from continuing operations – diluted, excluding the after-tax impact of significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the DWDP Merger and the after-tax impact of non-operating pension / OPEB benefits / charges. Although amortization of EID intangibles acquired as part of the DWDP Merger is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. Management estimates amortization expense in 2021 associated with intangibles acquired as part of the DWDP Merger to be approximately $490 million on a pre-tax basis, or approximately $0.70 per share.

Pro forma operating EBITDA, is defined as earnings (i.e. pro forma income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, excluding the impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations and adjusted to exclude significant items. Operating EBITDA, is defined as earnings (i.e. income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, adjusted to exclude significant items. Operating EBITDA margin is calculated as operating EBITDA divided by net sales.

Significant items are items that arise outside the ordinary course of the Company’s business that management believes may cause misinterpretation of underlying business performance, both historical and future, based on a combination of some or all of the item’s size, unusual nature and infrequent occurrence. Management classifies as significant items certain costs and expenses associated with integration and separation activities related to transformational acquisitions and divestitures as they are considered unrelated to ongoing business performance.

Organic Sales is defined as net sales excluding the impacts of currency and portfolio.

Free cash flow is defined as cash provided by/used for operating activities less capital expenditures. As a result, free cash flow represents cash that is available to the Company, after investing in its asset base, to fund obligations using the Company’s primary source of liquidity, cash provided by operating activities. Management believes free cash flow, even though it may be defined differently from other companies, is useful to investors, analysts and others to evaluate the Company’s cash flow and financial performance, and it is an integral measure used in the Company’s financial planning process.

(1)   Adjusted EPS, operating EBITDA and free cash flow are non-GAAP measures. See page 7 for further discussion. Reconciliation to the most directly comparable GAAP measure, including details of significant items begins on page 13 of this communication.

(2)   Subject to regulatory approval and other customary closing conditions.

 


DuPont de Nemours, Inc.

Consolidated Statements of Operations

In millions, except per share amounts (Unaudited)


Three Months Ended

December 31,


Twelve Months Ended

December 31,


2020


2019


2020


2019

Net sales

$

5,252

$

5,204

$

20,397

$

21,512

Cost of sales

3,521

3,408

13,522

14,056

Research and development expenses

216

231

860

955

Selling, general and administrative expenses

537

650

2,235

2,663

Amortization of intangibles

528

295

2,119

1,050

Restructuring and asset related charges – net

42

24

849

314

Goodwill impairment charges

3,214

1,175

Integration and separation costs

125

193

594

1,342

Equity in earnings of nonconsolidated affiliates

19

(48)

191

84

Sundry income (expense) – net

48

9

675

153

Interest expense

194

175

767

668

Income (loss) from continuing operations before income taxes

156

189

(2,897)

(474)

(Benefit from) Provision for income taxes on continuing operations

(123)

(2)

(23)

140

Income (loss) from continuing operations, net of tax

279

191

(2,874)

(614)

(Loss) Income from discontinued operations, net of tax

(49)

(3)

(49)

1,214

Net income (loss)

230

188

(2,923)

600

Net income attributable to noncontrolling interests

8

12

28

102

Net income (loss) available for DuPont common stockholders

$

222

$

176

$

(2,951)

$

498

Per common share data:

Earnings (loss) per common share from continuing operations – basic

$

0.37

$

0.24

$

(3.95)

$

(0.86)

(Loss) Earnings per common share from discontinued operations – basic

(0.07)

(0.07)

1.53

Earnings (loss) per common share – basic

$

0.30

$

0.24

$

(4.01)

$

0.67

Earnings (loss) per common share from continuing operations – diluted

$

0.37

$

0.24

$

(3.95)

$

(0.86)

(Loss) Earnings per common share from discontinued operations – diluted

(0.07)

(0.07)

1.53

Earnings (loss) per common share – diluted

$

0.30

$

0.24

$

(4.01)

$

0.67

Weighted-average common shares outstanding – basic

734.6

740.7

735.5

746.3

Weighted-average common shares outstanding – diluted

735.4

742.0

735.5

746.3

 


DuPont de Nemours, Inc.

Consolidated Balance Sheets

In millions, except share and per share amounts (Unaudited)


December 31, 2020


December 31, 2019


Assets

Current Assets

Cash and cash equivalents

$

2,544

$

1,540

Accounts and notes receivable – net

3,551

3,802

Inventories

3,726

4,319

Other current assets

246

338

Assets held for sale

810

Total current assets

10,877

9,999

Property

Property, plant and equipment

15,982

15,112

Less: Accumulated depreciation

5,997

4,969

Property, plant and equipment – net

9,985

10,143

Other Assets

Goodwill

30,244

33,151

Other intangible assets

11,144

13,593

Restricted cash

6,206

Investments and noncurrent receivables

1,083

1,260

Deferred income tax assets

234

189

Deferred charges and other assets

1,131

1,014

Total other assets

50,042

49,207

Total Assets

$

70,904

$

69,349


Liabilities and Equity

Current Liabilities

Short-term borrowings and finance lease obligations

$

5

$

3,830

Accounts payable

2,964

2,934

Income taxes payable

205

240

Accrued and other current liabilities

1,385

1,342

Liabilities related to assets held for sale

140

Total current liabilities

4,699

8,346

Long-Term Debt

21,806

13,617

Other Noncurrent Liabilities

Deferred income tax liabilities

2,905

3,467

Pension and other post employment benefits – noncurrent

1,348

1,172

Other noncurrent obligations

1,076

1,191

    Total other noncurrent liabilities

5,329

5,830

Total Liabilities

$

31,834

$

27,793

Commitments and contingent liabilities

Stockholders’ Equity

Common stock (authorized 1,666,666,667 shares of $0.01 par value each; 

     issued 2020: 734,204,054 shares; 2019: 738,564,728 shares)

7

7

Additional paid-in capital

50,039

50,796

(Accumulated deficit) Retained earnings

(11,586)

(8,400)

Accumulated other comprehensive income (loss)

44

(1,416)

Total DuPont stockholders’ equity

38,504

40,987

Noncontrolling interests

566

569

Total equity

39,070

41,556

Total Liabilities and Equity

$

70,904

$

69,349

 


DuPont de Nemours, Inc.

Consolidated Statement of Cash Flows 

In millions (Unaudited)


Twelve Months Ended

December 31,


2020


2019


Operating Activities

Net (loss) income

$

(2,923)

$

600

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

3,094

3,195

Credit for deferred income tax and other tax related items

(692)

(768)

Earnings of nonconsolidated affiliates (in excess of) less than dividends received

(87)

909

Net periodic pension benefit cost (credit)

37

(55)

Pension contributions

(98)

(697)

Net gain on sales of assets, businesses and investments

(642)

(149)

Restructuring and asset related charges – net

849

588

Goodwill impairment charges

3,214

1,175

Amortization of merger-related inventory step-up

253

Other net loss

175

338

Changes in assets and liabilities, net of effects of acquired and divested companies:

Accounts and notes receivable

308

(2,227)

Inventories

570

387

Accounts payable

177

(1,049)

Other assets and liabilities, net

113

(1,091)

Cash provided by operating activities

4,095

1,409


Investing Activities

Capital expenditures

(1,194)

(2,472)

Investment in gas field developments

(25)

Proceeds from sales of property, businesses, and ownership interests in nonconsolidated affiliates, net
of cash divested

1,033

299

Acquisitions of property and businesses, net of cash acquired

(70)

(180)

Purchases of investments

(1)

(197)

Proceeds from sales and maturities of investments

1

242

Other investing activities, net

29

20

Cash used for investing activities

(202)

(2,313)


Financing Activities

Changes in short-term borrowings

(1,829)

2,735

Proceeds from issuance of long-term debt

8,275

4,005

Payments on long-term debt

(2,031)

(6,900)

Purchases of common stock

(232)

(2,329)

Proceeds from issuance of Company stock

57

85

Employee taxes paid for share-based payment arrangements

(15)

(84)

Distributions to noncontrolling interests

(50)

(27)

Dividends paid to stockholders

(882)

(1,611)

Cash held by Dow and Corteva at the respective Distributions

(7,315)

Debt extinguishment costs

(104)

Other financing activities, net

(55)

(5)

Cash provided by (used for) financing activities

3,238

(11,550)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

67

9


Increase (Decrease) in cash, cash equivalents and restricted cash

7,198

(12,445)

Cash, cash equivalents and restricted cash from continuing operations, beginning of period

1,577

8,591

Cash, cash equivalents and restricted cash from discontinued operations, beginning of period

5,431


Cash, cash equivalents and restricted cash at beginning of period

1,577

14,022

Cash, cash equivalents and restricted cash from continuing operations, end of period

8,775

1,577

Cash, cash equivalents and restricted cash from discontinued operations, end of period


Cash, cash equivalents and restricted cash at end of period

$

8,775

$

1,577

 


DuPont de Nemours, Inc.

Pro Forma Consolidated Statements of Operations

In millions, except per share amounts (Unaudited)


Twelve Months Ended

December 31,


2020


2019


As Reported


Pro Forma 1

Net sales

$

20,397

$

21,512

Cost of sales

13,522

14,078

Research and development expenses

860

955

Selling, general and administrative expenses

2,235

2,663

Amortization of intangibles

2,119

1,050

Restructuring and asset related charges – net

849

314

Goodwill impairment charges

3,214

1,175

Integration and separation costs

594

1,169

Equity in earnings of nonconsolidated affiliates

191

84

Sundry income (expense) – net

675

153

Interest expense

767

697

Loss from continuing operations before income taxes

(2,897)

(352)

(Benefit from) Provision for income taxes on continuing operations

(23)

170

Loss from continuing operations, net of tax

(2,874)

(522)

Net income attributable to noncontrolling interests from continuing operations

28

30

Net loss from continuing operations available for DuPont common stockholders

$

(2,902)

$

(552)

Per common share data:

Loss per common share from continuing operations – basic

$

(3.95)

$

(0.74)

Loss per common share from continuing operations – diluted

$

(3.95)

$

(0.74)

Weighted-average common shares outstanding – basic

735.5

746.3

Weighted-average common shares outstanding – diluted

735.5

746.3

1. Refer to page 17 for additional detail on the pro forma adjustments included in the pro forma Consolidated Statements of Operations.

 


DuPont de Nemours, Inc.

Net Sales by Segment and Geographic Region


Net Sales by Segment and Geographic Region


Three Months Ended


Twelve Months Ended

In millions (Unaudited)


Dec 31, 2020


Dec 31, 2019


Dec 31, 2020


Dec 31, 2019

Electronics & Imaging

$

1,021

$

937

$

3,814

$

3,554

Nutrition & Biosciences

1,502

1,458

6,059

6,076

Transportation & Industrial

1,168

1,155

4,189

4,950

Safety & Construction

1,224

1,250

4,993

5,201

Non-Core

337

404

1,342

1,731

Total

$

5,252

$

5,204

$

20,397

$

21,512

U.S. & Canada

$

1,601

$

1,698

$

6,476

$

7,122

EMEA 1

1,167

1,129

4,572

5,027

Asia Pacific

2,189

2,077

8,234

8,113

Latin America

295

300

1,115

1,250

Total

$

5,252

$

5,204

$

20,397

$

21,512

 


Net Sales Variance by Segment
and Geographic Region


Three Months Ended December 31, 2020


Local Price &
Product Mix


Volume


Total

Organic


Currency


Portfolio / Other



Total

Percent change from prior year
(Unaudited)

Electronics & Imaging

(2)

%

10

%

8

%

2

%

(1)

%

9

%

Nutrition & Biosciences

1

1

2

1

3

Transportation & Industrial

(4)

3

(1)

2

1

Safety & Construction

1

(7)

(6)

1

3

(2)

Non-Core

1

(1)

1

(18)

(17)

Total

(1)

%

1

%

%

2

%

(1)

%

1

%

U.S. & Canada

(1)

%

(2)

%

(3)

%

%

(3)

%

(6)

%

EMEA 1

(1)

(1)

(2)

4

1

3

Asia Pacific

(1)

4

3

2

5

Latin America

3

3

(5)

(2)

Total

(1)

%

1

%

%

2

%

(1)

%

1

%


Net Sales Variance by Segment
and Geographic Region


Twelve Months Ended December 31, 2020


Local Price &
Product Mix


Volume


Total

Organic


Currency


Portfolio / Other



Total

Percent change from prior year
(Unaudited)

Electronics & Imaging

(1)

%

8

%

7

%

%

%

7

%

Nutrition & Biosciences

1

1

(1)

Transportation & Industrial

(4)

(11)

(15)

(15)

Safety & Construction

2

(8)

(6)

2

(4)

Non-Core

3

(14)

(11)

(11)

(22)

Total

%

(4)

%

(4)

%

%

(1)

%

(5)

%

U.S. & Canada

(1)

%

(7)

%

(8)

%

%

(1)

%

(9)

%

EMEA 1

(9)

(9)

(9)

Asia Pacific

(1)

2

1

1

Latin America

4

(9)

(5)

(5)

(1)

(11)

Total

%

(4)

%

(4)

%

%

(1)

%

(5)

%

1. Europe, Middle East and Africa.

 


DuPont de Nemours, Inc.

Selected Financial Information and Non-GAAP Measures


Operating EBITDA by Segment


Three Months Ended


Twelve Months Ended


Dec 31, 2020


Dec 31, 2019


Dec 31, 2020


Dec 31, 2019

In millions (Unaudited)


As Reported


As Reported


As Reported


Pro Forma

Electronics & Imaging

$

323

$

293

$

1,210

$

1,147

Nutrition & Biosciences

341

317

1,523

1,406

Transportation & Industrial

317

277

916

1,313

Safety & Construction

310

311

1,351

1,419

Non-Core

19

216

168

512

Corporate

(24)

(27)

(126)

(157)

Total

$

1,286

$

1,387

$

5,042

$

5,640


Equity in Earnings of Nonconsolidated Affiliates


Three Months Ended


Twelve Months Ended


Dec 31, 2020


Dec 31, 2019


Dec 31, 2020


Dec 31, 2019

In millions (Unaudited)


As Reported


As Reported


As Reported


Pro Forma

Equity earnings (GAAP)

$

19

$

(48)

$

191

$

84

Significant items included in equity earnings 1

225

228

Equity earnings included in operating EBITDA (non-GAAP)

$

19

$

177

$

191

$

312


Equity earnings included in operating EBITDA by segment

Electronics & Imaging

$

8

$

6

$

35

$

24

Nutrition & Biosciences

2

(1)

4

(1)

Transportation & Industrial

1

1

4

4

Safety & Construction

7

5

26

27

Non-Core

1

166

122

258

Total equity earnings included in operating EBITDA (non-GAAP)

$

19

$

177

$

191

$

312

1. Primarily reflects a net charge related to a joint venture in the Non-Core segment. Refer to pages 14 and 15 for additional information.


Reconciliation of “Income (Loss) from continuing operations, net of tax”
to “Operating EBITDA”


Three Months Ended


Twelve Months Ended


Dec 31, 2020


Dec 31, 2019


Dec 31, 2020


Dec 31, 2019

In millions (Unaudited)


As Reported


As Reported


As Reported


Pro Forma

Income (loss) from continuing operations, net of tax (GAAP)

$

279

$

191

$

(2,874)

$

(522)

+ (Benefit from) Provision for income taxes on continuing operations

(123)

(2)

(23)

170

Income (loss) from continuing operations before income taxes

$

156

$

189

$

(2,897)

$

(352)

+ Depreciation and amortization

768

533

3,094

2,066

–  Interest income 1

3

5

10

55

+ Interest expense 2

155

175

674

697

–  Non-operating pension/OPEB benefit 1

8

14

32

74

–  Foreign exchange losses, net 1

(15)

(9)

(56)

(110)

+ Costs historically allocated to the materials science and agriculture
businesses 3

256

– Significant items

(203)

(500)

(4,157)

(2,992)

Operating EBITDA (non-GAAP)

$

1,286

$

1,387

$

5,042

$

5,640

1. Included in “Sundry income (expense) – net.”

2. The three and twelve months ended December 31, 2020 excludes N&B financing fee amortization. Refer to pages 14 and 15 for details of significant items.

3. Costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205.


Reconciliation of “Cash provided by operating activities” to Free Cash
Flow


Three Months Ended


Twelve Months Ended

In millions (Unaudited)


Dec 31, 2020


Dec 31, 2019


Dec 31, 2020


Dec 31, 2019

Cash provided by operating activities (GAAP) 1

$

1,301

$

578

$

4,095

$

1,409

Capital expenditures

(272)

(381)

(1,194)

(2,472)

Free cash flow (non-GAAP)

$

1,029

$

197

$

2,901

$

(1,063)

1.  Refer to the Consolidated Statement of Cash Flows included in the schedules above for major GAAP cash flow categories as well as further detail relating to the changes in “Cash provided by operating activities” for the twelve month periods noted. In addition, 2019 includes cash activity related to Dow and Corteva prior to the DWDP Distributions.

 


DuPont de Nemours, Inc.

Selected Financial Information and Non-GAAP Measures


Significant Items Impacting Results for the Three Months Ended December 31, 2020

In millions, except per share amounts (Unaudited)


Pretax 1


Net
Income 2


EPS 3


Income Statement Classification

Reported results (GAAP)

$

156

$

271

$

0.37

Less: Significant items

Integration and separation costs 4

(125)

(114)

(0.16)

Integration and separation costs

Restructuring and asset related charges – net 5

(42)

(31)

(0.04)

Restructuring and asset related charges – net

Gain on divestitures 6

3

4

0.01

Sundry income (expense) – net

N&B financing activities – net 7

(39)

(31)

(0.04)

Interest expense; Sundry income (expense) – net

Income tax related item 8

106

0.14

Provision for income taxes on continuing operations

Total significant items

$

(203)

$

(66)

$

(0.09)

Less: Merger-related amortization of intangibles

(480)

(368)

(0.50)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

8

7

0.01

Sundry income (expense) – net

Adjusted results (non-GAAP)

$

831

$

698

$

0.95


Significant Items Impacting Results for the Three Months Ended December 31, 2019

In millions, except per share amounts (Unaudited)


Pretax 1


Net
Income 2


EPS 3


Income Statement Classification

Reported results (GAAP)

$

189

$

179

$

0.24

Less: Significant items

Integration and separation costs 4

(193)

(148)

(0.21)

Integration and separation costs

Restructuring and asset related charges – net 5

(25)

(17)

(0.02)

Restructuring and asset related charges – net; Equity in earnings of nonconsolidated affiliates

Net change related to a joint venture 9

(208)

(158)

(0.21)

Equity in earnings of nonconsolidated affiliates; Cost of sales

Income tax related item 10

(74)

(23)

(0.03)

Sundry income (expense) – net

Total significant items

$

(500)

$

(346)

$

(0.47)

Less: Merger-related amortization of intangibles

(247)

(191)

(0.26)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

14

12

0.02

Sundry income (expense) – net; Provision for income taxes on continuing operations

Adjusted pro forma results (non-GAAP)

$

922

$

704

$

0.95

1.     Income (loss) from continuing operations before income taxes.

2.     Net income (loss) from continuing operations available for DuPont common stockholders. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

3.     Earnings (loss) per common share from continuing operations – diluted.

4.     Integration and separation costs related to the separation of the Nutrition & Biosciences business and post-DWDP Merger integration.

5.     Includes Board approved restructuring plans and other asset related charges.

6.     Reflects a post closing adjustment related to the sale of the trichlorosilane business (“TCS”) and equity stake in Hemlock Semiconductor JV (collectively, “TCS/Hemlock”) within the Non-Core segment.

7.     Includes interest expense, net and financing fee amortization related to committed financing incurred in connection with the intended separation of the N&B Business.

8.     Includes an $106 million tax benefit primarily related to capital loss triggered as part of tax planning.

9.     Reflects the Company’s share of net charges related to its investment in the HSC Group, consisting of $456 million in asset impairment charges, primarily fixed assets, offset slightly by benefits associated with certain customer contract settlements of $248 million deemed non-recurring in nature.

10.  Includes a pretax charges of $74 million ($64 million net of tax benefit) related to tax indemnifications, primarily associated with an adjustment to a one-time transition tax liability required by the Tax Cuts and Jobs Act of 2017.

 


DuPont de Nemours, Inc.

Selected Financial Information and Non-GAAP Measures


Significant Items Impacting Results for the Twelve Months Ended December 31, 2020

In millions, except per share amounts (Unaudited)


Pretax 1


Net
Income 2


EPS 3


Income Statement Classification

Reported results (GAAP)

$

(2,897)

$

(2,902)

$

(3.95)

Less: Significant items

Integration and separation costs 4

(594)

(477)

(0.65)

Integration and separation costs

Restructuring and asset related charges – net 5

(188)

(144)

(0.20)

Restructuring and asset related charges – net

Goodwill impairment charges 6

(3,214)

(3,214)

(4.37)

Goodwill impairment charges

Asset impairment charges 7

(661)

(503)

(0.68)

Restructuring and asset related charges – net

Gain on divestitures 8

593

338

0.46

Sundry income (expense) – net

N&B financing activities – net 9

(93)

(72)

(0.10)

Interest expense; Sundry income (expense) – net

Income tax related item 10

140

0.19

Provision for income taxes on continuing operations

Total significant items

$

(4,157)

$

(3,932)

$

(5.35)

Less: Merger-related amortization of intangibles

(1,918)

(1,469)

(1.99)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

32

25

0.03

Sundry income (expense) – net

Adjusted results (non-GAAP)

3,146

2,474

$

3.36


Significant Items Impacting Pro Forma Results for the Twelve Months Ended December 31, 2019

In millions, except per share amounts (Unaudited)


Pretax 1


Net
Income 2


EPS 3


Income Statement Classification

Pro forma results (GAAP)

$

(352)

$

(552)

$

(0.74)

Less: Significant items

Integration and separation costs 4

(1,169)

(895)

(1.21)

Integration and separation costs

Restructuring and asset related charges – net 5

(255)

(195)

(0.26)

Restructuring and asset related charges – net; Equity in earnings of nonconsolidated affiliates

Goodwill impairment charges 11

(1,175)

(1,173)

(1.57)

Goodwill impairment charges

Asset impairment charges 12

(63)

(47)

(0.06)

Restructuring and asset related charges – net

Net charge related to a joint venture 13

(208)

(158)

(0.21)

Equity in earnings of nonconsolidated affiliates; Cost of sales

Income tax related item 14

(122)

(128)

(0.17)

Sundry income (expense) – net; Provision for income taxes on continuing operations

Total significant items

$

(2,992)

$

(2,596)

$

(3.48)

Less: Merger-related amortization of intangibles

(845)

(660)

(0.88)

Amortization of intangibles

Less: Non-op pension / OPEB benefit

74

67

0.08

Sundry income (expense) – net

Less: Costs historically allocated to the materials
science and agriculture businesses 15

(256)

(197)

(0.26)

Cost of sales; Research and development expense; Selling, general and administrative expenses

Adjusted pro forma results (non-GAAP)

$

3,667

$

2,834

$

3.80

1.     Income (loss) from continuing operations before income taxes.

2.     Net income (loss) from continuing operations available for DuPont common stockholders. The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

3.     Earnings (loss) per common share from continuing operations – diluted.

4.     Integration and separation costs related to post-DWDP Merger integration, the DWDP Distributions and, beginning in the fourth quarter of 2019, the separation of the Nutrition & Biosciences business.

5.     Includes Board approved restructuring plans and other asset related charges.

6.     Reflects non-cash goodwill impairment charges recorded as follows: $533 million charge recorded in the first quarter 2020 related to the Non-Core segment; a $2,498 million charge recorded in the second quarter 2020 related to the Transportation & Industrial segment, and $183 million in charges recorded in the third quarter of 2020 related to the Non-Core segment.

7.     Reflects a $270 million pre-tax impairment charge recorded in first quarter 2020 related to a long-lived asset group within the Non-Core segment, a $21 million pre-tax impairment charge recorded in the second quarter 2020 related to other intangible assets within the Transportation & Industrial segment, and $370 million in pre-tax impairment charges recorded in third quarter 2020 related to long-lived asset groups and other intangible assets within the Non-Core segment.

8.     Reflects a gain on the first quarter 2020 sale of the Company’s Compound Semiconductor Solutions business within the Electronics & Imaging segment and a net benefit related to the third quarter 2020 sale of TCS/Hemlock, which includes a settlement of a supply contract dispute, within the Non-Core segment.

9.     Includes interest expense, net and financing fee amortization related to committed financing in connection with the intended separation of the N&B Business.

10.  Includes an $106 million tax benefit primarily related to capital loss triggered as part of tax planning.

11.  Reflects goodwill impairment charges related to the Nutrition & Biosciences and Non-Core segments.

12.  Reflects an impairment charge related to an equity method investment within the Nutrition & Biosciences segment.

13.  Reflects the Company’s share of net charges related to its investment in the HSC Group, consisting of $456 million in asset impairment charges, primarily fixed assets, offset slightly by benefits associated with certain customer contract settlements of $248 million deemed non-recurring in nature.

14.  Includes a pretax charges of $74 million ($64 million net of tax benefit) related to tax indemnifications, primarily associated with an adjustment to a onetime transition tax liability required by the Tax Cuts and Jobs Act of 2017 and a $48 million charge which reflects a reduction in gross proceeds from lower withholding taxes related to a prior year legal settlement.

15.  Costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205.

 


DuPont de Nemours, Inc.

Supplemental Unaudited Pro Forma Combined Financial Information


Unaudited Pro Forma Combined Statement of Income


Twelve Months Ended December 31, 2019

In millions, except per share amounts


DuPont 1


Pro Forma
Adjustments2


Pro Forma

Net sales

$

21,512

$

$

21,512

Cost of sales

14,056

22

14,078

Research and development expenses

955

955

Selling, general and administrative expenses

2,663

2,663

Amortization of intangibles

1,050

1,050

Restructuring and asset related charges – net

314

314

Goodwill impairment charges

1,175

1,175

Integration and separation costs

1,342

(173)

1,169

Equity in earnings of nonconsolidated affiliates

84

84

Sundry income (expense) – net

153

153

Interest expense

668

29

697

Loss from continuing operations before income taxes

(474)

122

(352)

Provision for income taxes on continuing operations

140

30

170

Loss from continuing operations, net of tax

(614)

92

(522)

Net income attributable to noncontrolling interests from continuing operations

30

30

Net loss from continuing operations attributable to DuPont

$

(644)

$

92

$

(552)

Per common share data:

Loss per common share from continuing operations – basic

$

(0.86)

$

(0.74)

Loss per common share from continuing operations – diluted

$

(0.86)

$

(0.74)

Weighted-average common shares outstanding – basic

746.3

746.3

Weighted-average common shares outstanding – diluted

746.3

746.3

1. See the historical U.S. GAAP Consolidated Statements of Operations.

2. Certain pro forma adjustments were made to illustrate the estimated effects of the DWDP Transactions, assuming that the DWDP Transactions had occurred on January 1, 2018. The pro forma adjustments are consistent with those identified and disclosed in the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2019. The adjustments include the impact to “Cost of sales” of different pricing than historical intercompany and intracompany practices related to various supply agreements entered into in connection with the Dow Distribution, adjustments to “Integration and separation costs” to eliminate one time transaction costs directly attributable to the DWDP Distributions, and adjustments to “Interest expense” to reflect the impact of the DWDP Financings.

 


DuPont de Nemours, Inc.

Supplemental Unaudited Recast Financial Information and Non-GAAP Measures

Beginning in the first quarter of 2021, DuPont will reflect the Nutrition & Biosciences (N&B) business as discontinued operations for current and historical periods. The information presented below for the twelve months ended December 31, 2020 and the three months ended March 31, 2020, reflects a reconciliation between select DuPont historical results and estimated preliminary unaudited historical results recast to exclude the N&B business as discontinued operations. The preliminary recast historical information is subject to change as the Company finalizes N&B discontinued operations accounting. Also included below are certain supplemental unaudited financial measures that are considered non-GAAP. Refer to page 7 of this release for additional information on these measures.


Net Sales


Twelve Months Ended December 31, 2020

In millions (Unaudited)


DuPont

Historical


N&B D
Discontinued
Operations


DuPont

Recast

Net sales

$

20,397

$

(6,059)

$

14,338


Reconciliation of “Income (Loss) from continuing operations, net of tax” to “Operating
EBITDA”


Twelve Months Ended December 31, 2020

In millions (Unaudited)


DuPont

Historical


N&B
Discontinued
Operations


DuPont

Recast

Loss from continuing operations, net of tax (GAAP)

$

(2,874)

$

468

$

(2,406)

+ (Benefit from) Provision for income taxes on continuing operations

(23)

183

160

Loss from continuing operations before income taxes

$

(2,897)

$

651

$

(2,246)

+ Depreciation and amortization

3,094

(1,721)

1,373

–  Interest income

10

2

12

+ Interest expense

674

(2)

672

–  Non-operating pension/OPEB benefit

32

(2)

30

–  Foreign exchange losses, net

(56)

17

(39)

– Significant items

(4,157)

514

(3,643)

Operating EBITDA (non-GAAP)

$

5,042

$

(1,603)

$

3,439

 


Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share for the Twelve Months Ended December 31, 2020

 

In millions, except per share amounts (Unaudited)


Pretax 1


Net Income 2


EPS 3


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast

Reported results

$

(2,897)

$

651

$

(2,246)

$

(2,902)

$

468

$

(2,434)

$

(3.95)

$

0.64

$

(3.31)

Less: Significant items

(4,157)

514

(3,643)

(3,932)

388

(3,544)

(5.35)

0.53

(4.82)

Less: Merger-related amortization of intangibles

(1,918)

1,417

(501)

(1,469)

1,080

(389)

(1.99)

1.46

(0.53)

Less: Non-op pension / OPEB benefit

32

(2)

30

25

(1)

24

0.03

0.03

Adjusted results (non-GAAP)

$

3,146

$

(1,278)

$

1,868

$

2,474

$

(999)

$

1,475

$

3.36

$

(1.35)

$

2.01

1.  Loss from continuing operations before income taxes.

2.  Net loss from continuing operations available for DuPont common stockholders.

3.  Earnings (loss) per common share from continuing operations – diluted. Based on historical weighted-average shares as previously reported.

 


DuPont de Nemours, Inc.

Supplemental Unaudited Recast Financial Information and Non-GAAP Measures


Net Sales


Three Months Ended March 31, 2020

In millions (Unaudited)


DuPont

Historical


N&B
Discontinued
Operations


DuPont

Recast

Net sales

$

5,221

$

(1,551)

$

3,670


Reconciliation of “Income (Loss) from continuing operations, net of tax” to “Operating
EBITDA”


Three Months Ended March 31, 2020

In millions (Unaudited)


DuPont

Historical


N&B
Discontinued
Operations


DuPont

Recast

Loss from continuing operations, net of tax (GAAP)

$

(610)

$

60

$

(550)

+ Provision for income taxes on continuing operations

44

50

94

Loss from continuing operations before income taxes

$

(566)

$

110

$

(456)

+ Depreciation and amortization

772

(427)

345

–  Interest income

2

2

+ Interest expense

173

(2)

171

–  Non-operating pension/OPEB benefit

11

11

–  Foreign exchange losses, net

(8)

5

(3)

– Significant items

(947)

90

(857)

Operating EBITDA (non-GAAP)

$

1,321

$

(414)

$

907

 


Reconciliation of Reported Earnings per Share to Adjusted Earnings per Share for the Three Months Ended March 31, 2020

 

In millions, except per share amounts (Unaudited)


Pretax 1


Net Income 2


EPS 3


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast


DuPont
Historical


N&B
Discontinued
Operations


DuPont
Recast

Reported results

$

(566)

$

110

$

(456)

$

(616)

$

60

$

(556)

$

(0.83)

$

0.08

$

(0.75)

Less: Significant items

(947)

90

(857)

(873)

51

(822)

(1.18)

0.07

(1.11)

Less: Merger-related amortization of intangibles

(482)

353

(129)

(368)

268

(100)

(0.50)

0.37

(0.13)

Less: Non-op pension / OPEB benefit

11

11

8

8

0.01

0.01

Adjusted results (non-GAAP)

$

852

$

(333)

$

519

$

617

$

(259)

$

358

$

0.84

$

(0.36)

$

0.48

1.  Loss from continuing operations before income taxes.

2.  Net loss from continuing operations available for DuPont common stockholders.

3.  Earnings (loss) per common share from continuing operations – diluted. Based on historical weighted-average shares as previously reported.

 

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SOURCE DuPont

ChipMOS JANUARY 2021 REVENUE INCREASES 24.9% YoY

PR Newswire

HSINCHU, Feb. 9, 2021 /PRNewswire-FirstCall/ — ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services (“OSAT”), today reported its unaudited consolidated revenue for the month of January 2021, which increased 24.9% on a year over year basis, to an all-time Company high for the month of January. All U.S. dollar figures cited in this press release are based on the exchange rate of NT$28.01 to US$1.00 as of January 29, 2021.

Revenue for the month of January 2021 was NT$2,163.3 million or US$77.2 million, an increase of 24.9% compared to January 2020 and a decrease of 1.2% compared to December 2020. The record high January revenue level reflects favorable supply and demand dynamics, which are a continuation of the trends seen through 2020 and expected to continue into 2021. The Company noted that it benefitted from strong demand in its memory and assembly businesses, with increased DDIC demand.  Utilization levels remained high across all segments.  The Company is adding additional capacity, increasing automation, and plans to maintain production levels during the upcoming Lunar holiday to meet the higher customer demand. 



Consolidated Monthly Revenues (Unaudited)

January 2021

December 2020

January 2020

MoM Change

YoY Change

Revenues

(NT$ million)

2,163.3

2,190.6

1,732.3

-1.2%

24.9%

Revenues

(US$ million)

77.2

78.2

61.8

-1.2%

24.9%

 

About ChipMOS TECHNOLOGIES INC.:

ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS) (https://www.chipmos.com) is an industry leading provider of outsourced semiconductor assembly and test services. With advanced facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan, ChipMOS provide assembly and test services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. 

Forward-Looking Statements

This press release may contain certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes,’ ‘expects,’ ‘anticipates,’ ‘projects,’ ‘intends,’ ‘should,’ ‘seeks,’ ‘estimates,’ ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors, including the potential impact of COVID-19.  Further information regarding these risks, uncertainties and other factors are included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange commission (the “SEC”) and in the Company’s other filings with the SEC.

Contacts:


In Taiwan

Jesse Huang

ChipMOS TECHNOLOGIES INC.

+886-6-5052388 ext. 7715


[email protected]


In the U.S.

David Pasquale

Global IR Partners

+1-914-337-8801


[email protected]

 

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SOURCE ChipMOS TECHNOLOGIES INC.

Pinterest to Host “Pinterest Presents” as First Global Advertiser Summit

The virtual event will provide the global advertising community an exclusive look at the company’s latest research and ad product updates to engage it’s more than 450 million monthly Pinners

PR Newswire

SAN FRANCISCO, Feb. 9, 2021 /PRNewswire/ — Pinterest (NYSE: PINS) announced today that it will host its first ever advertiser summit, Pinterest Presents, on March 3rd, 2021.

Hosted for advertisers in key markets including the US, UK, France, Germany, Canada and Australia, the virtual summit is designed to inspire and spark creativity among its audience and provide marketers with an exclusive look at the company’s latest ad product updates which offer even more opportunities for advertisers on the growing platform.

Pinterest Presents will bring together a range of compelling industry voices and inspiring speakers to create an exciting and engaging virtual experience. In addition to CEO Ben Silbermann, global Pinterest speakers will include Andréa Mallard, Chief Marketing Officer, Aya Kanai, Head of Content and Creators Partnerships, and Dan Lurie, Head of Growth and Shopping Product.

To reflect its growing global footprint, Pinterest’s summit will feature customized content and speakers for each market, to give marketers a window onto local audience trends and ad opportunities. Sessions for each country will ignite conversations around diversity and inclusion, sustainability, scaling e-commerce, designing for accessibility, and entrepreneurship. Pinterest Presents country line-up includes:

  • US:
    Jon Kaplan, Pinterest Chief Revenue Officer will host Walter Frye, Vice President of Global Brand Engagement & Design at American Express and Sarika Sangwan, Pinterest Global Strategy & Financial Services Marketing Lead, who will dive into American Express’support of small businesses. Sinéad Burke, Founder of Tilting the Lens, will be sharing her personal story on how she lives in a world not designed for her and address how accessibility needs to be better integrated in technology. Celestine Maddy, Global Head of Consumer & Brand Marketing at Pinterest will present the Future Trends.
  • UK:
    Katherine Ryan, Comedian, Actress and Writer will host the UK show and even try her hand at some Pinterest Predicts trends. Elizabeth Day, Journalist and Broadcaster and Karen Blackett OBE, UK Country Manager, WPP and CEO, Group M, will discuss personal and professional stories of positive failure through the lens of inspiration, and Steven Bartlett, Founder of Social Chain will interview Alex Loizou, Founder of Trouva about being an entrepreneur and heading up a challenger brand. Sinéad Burke, Founder of Tilting the Lens, will be sharing her personal story on how she lives in a world not designed for her and address how accessibility needs to be better integrated in technology. Milka Kramer, UK & Ireland Country Manager at Pinterest will present the Future Trends.

  • France:
    Anaïs Grangerac, TV Presenter and Pinterest creator will host. Alexandre Mars, serial entrepreneur, philanthropist fund founder will talk to Yannick Bolloré, Havas Group CEO in a fireside chat about entrepreneurship and the future of ecommerce in the advertising industry. Inès Leonarduzzi, CEO of NGO Digital and Emmanuelle Paille, Head of Comms, CSR & Public Affairs at Bel Group will explore what users are expecting from brands today and the impact of the COVID crisis. Adrien Boyer, France, Southern Europe and Benelux Country Manager at Pinterest will present the Future Trends.

  • Germany:

    Sascha Vitzthum, SVP Marketing at Home24 and Philipp Westermeyer, OMR Founder, will explore the shop window of the future. Jens Raskop, Head of Digital Marketing at MINI will be interviewed about aspects of reinvention and Maike Abel, Head of Media Communication & Content at Nestlé and Tijen Onaran, Entrepreneur and Author, will be talking about brand reputation and sustainability. Philip Missler, Head of Europe at Pinterest will present the Future Trends.

  • Canada:

    Erin Elofson, Head of Canada and Australia will host Alex Panousis, CEO, Carat Dentsu Aegis Network to discuss the death of the last click, agility in the pandemic age, and breaking through with creativity and brand safety. Sinéad Burke, Founder of Tilting the Lens, will be sharing her personal story on how she lives in a world not designed for her and address how accessibility needs to be better integrated in technology. Pascal Duffaut, Head of Partnerships, Automotive & Emerging at Pinterest will present the Future Trends.

  • Australia:

    Ryan Goldsworthy, Australia Agency Lead at Pinterest will host Megan Brownlow, industry leader, who will speak about how self-actualized brands embrace conscious commerce and align with social good. Turia Pitt, author, speaker, coach, and ironman athlete, will discuss how she has overcome hardships and truly embraces inspiration.

In addition, celebrated stars from the worlds of fashion and entertainment will be joining the line-up with exclusive advice for marketers. Pinterest will be announcing these special guests to registrants just before the event on March 3rd.

“Pinterest’s mission to help people around the world create a life they love has become more relevant than ever during the past year. Through our long-held commitment to being a positive destination globally, we have the opportunity to lead with our values and shape the future for our users and partners,” said Jim Habig, Pinterest’s Head of Global Business Marketing. “Advertisers around the world play an incredible role in building this positive environment, and we’re excited to share our new insights and ad tools to make it easier than ever to connect with our engaged audience around the world”

As a place for inspiration and positivity, Pinterest stands out in a competitive global advertising market with a unique and valuable differentiation for advertisers. Since people come to Pinterest when they are considering what to do or buy next, advertisers have the opportunity to play an authentic role in the consumer journey. In addition, Pinterest is increasingly becoming a shopping destination uniquely positioned to meet advertiser goals:

  • 89% of weekly Pinners use Pinterest for inspiration in their path to purchase. (1)
  • 64% of Pinners say Pinterest is where they go to find an idea, product or service they can trust (2)
  • 77% of weekly Pinners have discovered a new brand or product on Pinterest (3)
  • 89% of Pinners report that they leave the site feeling empowered. (4)
  • 97% of top searches on Pinterest are non-branded, giving advertisers the opportunity to reach consumers in discovery mode. (5)

With a focus on accessibility, Pinterest Presents was certified as a DICE-recommended event with the maximum score of 100%, and was created in collaboration with Sinéad Burke, the Founder of Tilting the Lens. Key priorities to ensure access for all include an event invitation with a specific prompt for attendees to confirm their accessibility accommodations, color contrast in the event branding created to give access to attendees who have low-vision, and captions and sign-language interpretation in the UK, US and Canada for those who are deaf or hard of hearing.

Advertisers interested in registering and learning more can visit pinterestpresents.com.

SOURCING
(1) GfK, US, Pinterest Path to Purchase Study among Weekly Pinners who use Pinterest in the Category, Nov 2018
(2) Talk Shoppe, US, Emotions, Attitudes & Usage study, Oct 2018
(3) GfK, US, Pinterest Path to Purchase Study among Weekly Pinners who use Pinterest in the Category, Nov 2018
(4) Talk Shoppe, US, Emotions, Attitudes, and Usage Study, Oct 2018
(5) Pinterest internal data, English Searches, April 2020

ABOUT PINTEREST
People around the world come to Pinterest for inspiration. Pinterest is a visual inspiration platform where people find inspiring creators, shop new products, and seek out ideas to take offline. People have saved nearly 300 billion Pins across a range of interests from creating a home office, cooking a new recipe to finding their next vacation destination. Headquartered in San Francisco, Pinterest launched in 2010 and has more than 450 million monthly active users. Available on iOS and Android, and at pinterest.com.

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SOURCE Pinterest

Centene Corporation Reports 2020 Results

— 2020 Full Year Diluted EPS of $3.12; Adjusted Diluted EPS of $5.00 —

PR Newswire

ST. LOUIS, Feb. 9, 2021 /PRNewswire/ — Centene Corporation (NYSE: CNC) announced today its financial results for the fourth quarter and year ended December 31, 2020, reporting diluted (loss) earnings per share (EPS) of $(0.02) and $3.12, respectively, and Adjusted diluted EPS of $0.46 and $5.00, respectively.

In summary, the 2020 fourth quarter and full year results were as follows:


2020 Results


Q4


Full Year

Total revenues (in millions)

$

28,288

$

111,115

Health benefits ratio

88.4

%

86.2

%

SG&A expense ratio

10.3

%

9.5

%

Adjusted SG&A expense ratio (1)

9.7

%

8.9

%

GAAP diluted (loss) earnings per share

$

(0.02)

$

3.12

Adjusted diluted EPS (1)

$

0.46

$

5.00

Total cash flow provided by operations (in millions)

$

2,981

$

5,503


(1) A full reconciliation of the Adjusted SG&A expense ratio and Adjusted diluted EPS are shown on page seven of this release.

“2020 was a year when Centene demonstrated the strength of our diversified enterprise and our operational excellence as we delivered strong top- and bottom line growth while supporting all our stakeholders.” said Michael F. Neidorff, Chairman, President and Chief Executive Officer of Centene.

“Building on our leadership position in government-sponsored healthcare, we are focused on delivering the next phase of growth through product and geographic expansion, advancing our technology strategy and further integrating our diverse capabilities. We are pleased to have been selected for two statewide managed care contracts in Oklahoma, and through the recently announced acquisition of Magellan, our goal is to enhance our ability to provide comprehensive care to the most vulnerable populations. Looking ahead, we have great confidence in our ability to pursue our growth strategy in 2021 and beyond.”

Fourth Quarter and Full Year Highlights

  • December 31, 2020 managed care membership of 25.5 million, an increase of 10.3 million members, or 67%, over December 31, 2019.
  • Total revenues of $28.3 billion for the fourth quarter of 2020, representing 50% growth compared to the fourth quarter of 2019, and $111.1 billion for the full year 2020, representing 49% growth year-over-year.
  • Health benefits ratio (HBR) of 88.4% for the fourth quarter of 2020, compared to 88.4% in the fourth quarter of 2019, and 86.2% for the full year 2020, compared to 87.3% for the full year 2019.
  • Selling, general and administrative (SG&A) expense ratio of 10.3% for the fourth quarter of 2020, compared to 9.6% for the fourth quarter of 2019. SG&A expense ratio of 9.5% for the full year 2020, compared to 9.3% for the full year 2019.
  • Adjusted SG&A expense ratio of 9.7% for the fourth quarter of 2020, compared to 9.5% for the fourth quarter of 2019. Adjusted SG&A expense ratio of 8.9% for the full year 2020, compared to 9.2% for the full year 2019.
  • Diluted loss per share for the fourth quarter of 2020 of $(0.02), compared to diluted EPS of $0.49 for the fourth quarter of 2019. Diluted EPS for the full year 2020 of $3.12, compared to $3.14 for the full year 2019.
  • Adjusted diluted EPS for the fourth quarter of 2020 of $0.46, compared to $0.73 for the fourth quarter of 2019. Adjusted diluted EPS for the full year 2020 of $5.00, compared to $4.42 for the full year 2019.
  • Operating cash flow of $3.0 billion and $5.5 billion for the fourth quarter and full year 2020, respectively, representing 3.1x net earnings for the full year 2020. Operating cash flow for the fourth quarter of 2020 benefited from payments received earlier than expected.

Other Events

  • In January 2021, Centene announced that its Oklahoma subsidiary, Oklahoma Complete Health, has been selected by the Oklahoma Health Care Authority (OHCA) for statewide contracts to provide managed care for the SoonerSelect and, on a sole source basis, SoonerSelect Specialty Children’s Plan (SCP) (foster care) programs. The state expects to commence the SoonerSelect and SoonerSelect SCP Programs on October 1, 2021.
  • In January 2021, Centene announced that it entered into a definitive merger agreement under which the Company will acquire Magellan Health for $95.00 per share in cash for a total enterprise value of $2.2 billion. The transaction is subject to clearance under the Hart-Scott Rodino Act, receipt of required state regulatory approvals, the approval of the definitive merger agreement by Magellan Health’s stockholders and other customary closing conditions. The transaction is expected to close in the second half of 2021.
  • In January 2021, Centene launched the Youth Impact Award for Vaping Prevention, a curriculum and contest for adolescents ages 14 through 19 to raise awareness about vaping, e-cigarette use, and encourage prevention. Winners will be announced in early summer of 2021.
  • In December 2020, Centene acquired PANTHERx, one of the largest and fastest-growing specialty pharmacies in the United States specializing in orphan drugs and treating rare diseases.
  • In December 2020, Centene acquired Apixio Inc., a healthcare analytics company offering Artificial Intelligence (AI) technology solutions, to continue to digitize the administration of healthcare and accelerate innovation and modernization across the enterprise.

Accreditations & Awards

  • In February 2021, FORTUNE magazine named Centene to its 2021 list of the World’s Most Admired Companies.
  • In November 2020, Centene’s subsidiary, Pennsylvania Health & Wellness, earned Accreditation from the National Committee for Quality Assurance.

COVID-19 Pandemic

Beginning in March 2020, Centene announced a series of actions in support of various populations impacted by the COVID-19 pandemic. A detailed list of specific actions taken by the Company in response to the pandemic is shown on page 15 of this release.

Membership

The following table sets forth our membership by line of business:


December 31,


2020


2019

Traditional Medicaid (1)

12,055,400

7,573,600

High Acuity Medicaid (2)

1,554,700

1,110,000

Total Medicaid

13,610,100

8,683,600

Commercial

2,633,600

2,331,100

Medicare (3)

955,400

359,600

Medicare PDP

4,469,400

International

597,700

599,800

Correctional

147,200

180,000

Total at-risk membership

22,413,400

12,154,100

TRICARE eligibles

2,877,900

2,860,700

Non-risk membership

231,600

227,000

Total

25,522,900

15,241,800


(1) Membership includes TANF, Medicaid Expansion, CHIP, Foster Care and Behavioral Health


(2) Membership includes ABD, IDD, LTSS and MMP Duals


(3) Membership includes Medicare Advantage and Medicare Supplement

The following table sets forth additional membership statistics, which are included in the membership information above:


December 31,


2020


2019

Dual-eligible (4)

1,066,800

639,200

Health Insurance Marketplace

2,131,600

1,805,200

Medicaid Expansion

2,181,400

1,346,700


(4) Membership that is eligible for both Medicaid and Medicare benefits

Revenues

The following table sets forth supplemental revenue information ($ in millions):


Three Months Ended December 31,


Year Ended December 31,


2020


2019


% Change


2020


2019


% Change

Medicaid

$

19,319

$

13,172

47

%

$

74,785

$

51,831

44

%

Commercial

4,178

3,560

17

%

17,071

14,747

16

%

Medicare (3)

3,084

1,044

195

%

11,976

4,248

182

%

Medicare PDP

547

n.m.

2,403

n.m.

Other

1,160

1,087

7

%

4,880

3,813

28

%

Total Revenues

$

28,288

$

18,863

50

%

$

111,115

$

74,639

49

%


 n.m.: not meaningful

Statement of Operations: Three Months Ended December 31, 2020

  • For the fourth quarter of 2020, total revenues increased 50% to $28.3 billion from $18.9 billion in the comparable period of 2019. The increase over the prior year was due to the acquisition of WellCare and growth in the Medicaid and Health Insurance Marketplace businesses, driven by expansions and new programs in many of our states. Additionally, the net effect of the pandemic increased our revenues due to the suspension of Medicaid eligibility redeterminations. The increase was partially offset by the divestiture of our Illinois health plan.
  • HBR of 88.4% for the fourth quarter of 2020 was consistent with the comparable period in 2019. The fourth quarter 2020 HBR benefited from lower medical utilization trends due to the COVID-19 pandemic and the reinstatement of the health insurer fee. This was offset by higher testing and treatment costs associated with COVID-19, particularly in the Health Insurance Marketplace business, and retroactive state premium rate adjustments and risk sharing mechanisms.
  • The SG&A expense ratio was 10.3% for the fourth quarter of 2020, compared to 9.6% in the fourth quarter of 2019. The increase was due to enhanced growth and profitability initiatives for our Medicare and Health Insurance Marketplace businesses and higher acquisition and integration related expenses primarily due to the WellCare acquisition, partially offset by the leveraging of expenses over higher revenues as a result of the WellCare acquisition. The cost associated with the enhanced growth and profitability initiatives reflect the investment of the ACA risk corridor benefit realized in the third quarter of 2020.
  • The Adjusted SG&A expense ratio was 9.7% for the fourth quarter of 2020, compared to 9.5% in the fourth quarter of 2019. The increase was due to enhanced growth and profitability initiatives for our Medicare and Health Insurance Marketplace businesses, partially offset by the leveraging of expenses over higher revenues as a result of the WellCare acquisition.
  • The effective tax rate was (74.3)% for the fourth quarter of 2020, compared to 22.3% in the fourth quarter of 2019. The effective tax rate for the fourth quarter of 2020 reflects our pre-tax loss and the non-deductibility of the health insurer fee. The effective tax rate for the fourth quarter of 2019 reflects the health insurer fee moratorium. For the fourth quarter of 2020, our effective tax rate on adjusted earnings was 10.0%.

Statement of Operations: Year Ended December 31, 2020

  • For the full year 2020, total revenues increased 49% to $111.1 billion from $74.6 billion in the comparable period of 2019. The increase over the prior year was primarily due to the acquisition of WellCare, growth in the Medicaid and Health Insurance Marketplace businesses, and the reinstatement of the health insurer fee in 2020. Additionally, the net effect of the pandemic increased our revenues due to the suspension of Medicaid eligibility redeterminations. The increase was partially offset by the divestiture of our Illinois health plan.
  • HBR of 86.2% for the full year 2020 represents a decrease from 87.3% in the comparable period in 2019. The HBR decrease compared to last year was driven by lower medical utilization trends due to the COVID-19 pandemic, the ACA risk corridor receivable settlement and the reinstatement of the health insurer fee. The decrease was partially offset by performance in the Health Insurance Marketplace business, the implementation of retroactive state premium rate adjustments and risk sharing mechanisms, and higher testing and treatment costs associated with COVID-19.
  • The SG&A expense ratio was 9.5% for the full year 2020, compared to 9.3% for the full year 2019. The 2020 SG&A expense ratio increased due to higher acquisition and integration related expenses primarily due to the WellCare acquisition, the $275 million charitable contribution to our foundation and enhanced growth and profitability initiatives for our Medicare and Health Insurance Marketplace businesses (both as a result of the one-time ACA risk corridor settlement). These items were partially offset by leveraging of expenses over higher revenues as a result of the WellCare acquisition.
  • The Adjusted SG&A expense ratio was 8.9% for the full year 2020, compared to 9.2% for the full year 2019. The Adjusted SG&A expense ratio benefited from leveraging of expenses over higher revenues as a result of the WellCare acquisition, partially offset by the $275 million charitable contribution to our foundation and enhanced growth and profitability initiatives for our Medicare and Health Insurance Marketplace businesses.
  • The effective tax rate was 35.3% for 2020, compared to 26.5% for 2019. The effective tax rate for 2020 reflects the reinstatement of the health insurer fee, partially offset by a favorable tax settlement. The effective tax rate for the full year of 2019 reflects the non-deductibility of a portion of our non-cash goodwill and intangible impairment, offset by the health insurer fee moratorium. For 2020, our effective tax rate on adjusted earnings was 30.1%.

Balance Sheet

At December 31, 2020, the Company had cash, investments and restricted deposits of $26.3 billion and maintained $1.0 billion of cash and cash equivalents in our unregulated entities. Medical claims liabilities totaled $12.4 billion. The Company’s days in claims payable was 51 days, which is a decrease of one day over the third quarter of 2020 due to the timing of state directed payments. Total debt was $16.8 billion, which included $97 million of borrowings on our $2.0 billion revolving credit facility at quarter end. The debt to capitalization ratio was 39.0% at December 31, 2020, excluding $230 million of non-recourse debt. Our debt to capital ratio would have been 37.5% at December 31, 2020, when netting unregulated cash and cash equivalents with debt, and excluding non-recourse debt.

Outlook

The Company’s annual guidance for 2021 has been adjusted to include PANTHERx, which was acquired in December 2020 and is expected to be break-even in the initial year, in line with our previous comments. In addition, our GAAP diluted EPS has decreased from our investor day guidance due to incremental amortization expense related to PANTHERx and a one-time charge related to a corporate restructuring creating additional capacity for investment in our continued growth. These items will be discussed further on our conference call.


Full Year 2021


Low


High 

Total revenues (in billions)

$

116.1

$

118.1

GAAP diluted EPS

$

3.69

$

3.91

Adjusted diluted EPS (1)

$

5.00

$

5.30

HBR

86.6

%

87.2

%

SG&A expense ratio

8.6

%

9.1

%

Adjusted SG&A expense ratio (2)

8.3

%

8.8

%

Effective tax rate

24.7

%

26.7

%

Diluted shares outstanding (in millions)

590.1

593.1


(1)    A full reconciliation of Adjusted diluted EPS is shown on page seven of this release.


(2)    Adjusted SG&A expense ratio excludes acquisition related expenses of $189 million to $220 million.

Conference Call

As previously announced, the Company will host a conference call Tuesday, February 9, 2021, at approximately 8:30 AM (Eastern Time) to review the financial results for the fourth quarter and year ended December 31, 2020. Michael Neidorff and Jeffrey Schwaneke will host the conference call. 

Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and Canada; +1-412-902-6506 from abroad, including the following Elite Entry Number: 0630851 to expedite caller registration; or via a live, audio webcast on the Company’s website at www.centene.com, under the Investors section.

A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until 11:59 PM (Eastern Time) on Tuesday, February 8, 2022, at the aforementioned URL. In addition, a digital audio playback will be available until 9:00 AM (Eastern Time) on Tuesday, February 16, 2021, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10151498.

Non-GAAP Financial Presentation

The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company’s operations and measure the Company’s performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company’s core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. 

Specifically, the Company believes the presentation of non-GAAP financial information that excludes amortization of acquired intangible assets and acquisition related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company’s performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):


Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

GAAP net (loss) earnings attributable to Centene

$

(12)

$

209

$

1,808

$

1,321

Amortization of acquired intangible assets

192

64

719

258

Acquisition related expenses

156

38

602

104

Other adjustments (1)

17

30

29

301

Income tax effects of adjustments (2)

(84)

(32)

(262)

(127)

  Adjusted net earnings

$

269

$

309

$

2,896

$

1,857


(1)    Other adjustments include the following items: 
            


(a)  divestiture gain of $104 million, or $0.10 per diluted share for the year ended December 31, 2020;


               (b)  non-cash impairment of $72 million, or $0.10 per diluted share for the year ended December 31, 2020;


               (c)  debt extinguishment costs of $17 million and $30 million, or $0.02 and $0.05 per diluted share for the three months ended December 31, 
                  2020 and 2019, respectively, and $61 million and $30 million, or $0.07 and $0.05 per diluted share for the year ended December 31, 
                  2020 and 2019, respectively; and


               (d)  non-cash goodwill and intangible asset impairment of $271 million, or $0.57 per diluted share, for the year ended December 31, 2019


(2)      The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment.


Three Months Ended
December 31,


Year Ended
December 31,


Annual Guidance
December 31, 2021


2020


2019


2020


2019

GAAP diluted (loss) earnings per
share attributable to Centene

$

(0.02)

$

0.49

$

3.12

$

3.14

$3.69 – $3.91

Amortization of acquired
intangible assets (3)

0.25

0.12

0.95

0.47

$0.99 – $1.01

Acquisition related expenses (4)

0.21

0.07

0.86

0.19

$0.24 – $0.28

Other adjustments (5)

0.02

0.05

0.07

0.62

$0.08 – $0.10

  Adjusted diluted EPS

$

0.46

$

0.73

$

5.00

$

4.42

$5.00 – $5.30


(3)      The amortization of acquired intangible assets per diluted share presented above is net of an income tax benefit of $0.08 and $0.04 for the 
         three months ended December 31, 2020 and 2019, respectively, and $0.29 and $0.14 for the year ended December 31, 2020 and 2019, 
         respectively; and an estimated $0.31 for the year ended December 31, 2021.


(4)      The acquisition related expenses per diluted share presented above are net of an income tax benefit of $0.05 and $0.02 for the three months 
         ended December 31, 2020 and 2019, respectively, and $0.18 and $0.06 for the year ended December 31, 2020 and 2019, respectively; and 
         an estimated $0.08 to $0.10 for the year ended December 31, 2021.


(5)      Other adjustments include the following items:
               


(a)  gain related to the divestiture of certain products of the Company’s Illinois health plan of $0.10 per diluted share, net of income tax 
                     expense of $0.08 for the year ended December 31, 2020;


                  (b)  non-cash impairment of our third party-care management software system of $0.10 per diluted share, net of an income tax benefit of 
                     $0.02 for the year ended December 31, 2020;


                  (c)  debt extinguishment costs of $0.02 and $0.05 per diluted share, net of an income tax benefit of $0.01 and $0.02 for the three months 
                     ended December 31, 2020 and 2019, respectively, and $0.07 and $0.05 per diluted share, net of an income tax benefit of $0.04 and 
                     $0.02 for the year ended December 31, 2020 and 2019, respectively;


                  (d)  non-cash impairment of $0.57 per diluted share, net of an income tax benefit of $0.08 for the year ended December 31, 2019; and


                  (e)  restructuring costs of an estimated $0.08 to $0.10 per diluted share, net of an estimated income tax benefit of $0.03 for the year ended 
                     December 31, 2021.


Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

GAAP SG&A expenses

$

2,721

$

1,733

$

9,867

$

6,533

Acquisition related expenses

154

24

580

85

Adjusted SG&A expenses

$

2,567

$

1,709

$

9,287

$

6,448

To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows:

  • Health Benefits Ratio (HBR) (GAAP) = Medical costs divided by premium revenues.
  • SG&A Expense Ratio (GAAP) = Selling, general and administrative expenses divided by premium and service revenues.
  • Adjusted SG&A Expenses (non-GAAP) = Selling, general and administrative expenses, less acquisition related expenses.
  • Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted selling, general and administrative expenses divided by premium and service revenues.
  • Adjusted Net Earnings (non-GAAP) = Net earnings less amortization of acquired intangible assets, less acquisition related expenses, as well as adjustments for other items, net of the income tax effect of the adjustments.
  • Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis.
  • Debt to Capitalization Ratio (GAAP) = Total debt, divided by total debt plus total stockholder’s equity.
  • Debt to Capitalization Ratio Excluding Non-Recourse Debt (non-GAAP) = Total debt less non-recourse debt, divided by total debt less non-recourse debt plus total stockholder’s equity.
  • Average Medical Claims Expense (GAAP) = Medical costs for the period, divided by number of days in such period. Average Medical Claims Expense is most often calculated for the quarterly reporting period.
  • Days in Claims Payable (GAAP) = Medical claims liabilities, divided by average medical claims expense. Days in Claims Payable is most often calculated for the quarterly reporting period.

In addition, the following terms are defined as follows:

  • State Directed Payments: Payments directed by a state that have minimal risk, but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a 100% HBR. The Company has little visibility to the timing of these payments until they are paid by a state.
  • Pass Through Payments: Non-risk supplemental payments from a state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense.

About Centene Corporation

Centene Corporation, a Fortune 50 company, is a leading multi-national healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach – with local brands and local teams – to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to nearly 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace, the TRICARE program, and individuals in correctional facilities. The Company also serves several international markets, and contracts with other healthcare and commercial organizations to provide a variety of specialty services focused on treating the whole person. Centene focuses on long-term growth and the development of its people, systems and capabilities so that it can better serve its members, providers, local communities, and government partners.

Centene uses its investor relations website to publish important information about the company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene’s investor relations website, http://investors.centene.com/.

Forward-Looking Statements

All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “seek,” “target,” “goal,” “may,” “will,” “would,” “could,” “should,” “can,” “continue” and other similar words or expressions (and the negative thereof).  Centene (the Company, our, or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our future operating or financial performance, market opportunity, growth strategy, competition, expected activities in completed and future acquisitions, including statements about the impact of our proposed acquisition of Magellan Health (the Magellan Acquisition), our recently completed acquisition of WellCare Health Plans, Inc. (WellCare and such acquisition, the WellCare Acquisition), other recent and future acquisitions, investments and the adequacy of our available cash resources. These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions. All forward-looking statements included in this press release are based on information available to us on the date hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this press release, whether as a result of new information, future events or otherwise, after the date hereof. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to: the impact of COVID-19 on global markets, economic conditions, the healthcare industry and our results of operations and the response by governments and other third parties; the risk that regulatory or other approvals required for the Magellan Acquisition may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and our resources or otherwise have an adverse effect on us; the risk that Magellan Health’s stockholders do not approve the definitive merger agreement;the possibility that certain conditions to the consummation of the Magellan Acquisition will not be satisfied or completed on a timely basis and accordingly the Magellan Acquisition may not be consummated on a timely basis or at all; uncertainty as to the expected financial performance of the combined company following completion of the Magellan Acquisition;the possibility that the expected synergies and value creation from the Magellan Acquisition or the WellCare Acquisition will not be realized, or will not be realized within the applicable expected time periods; the exertion of management’s time and our resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for the Magellan Acquisition;the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Magellan Acquisition or that the integration of Magellan Health will be more difficult or time consuming than expected;the risk that potential litigation in connection with the Magellan Acquisition may affect the timing or occurrence of the Magellan Acquisition or result in significant costs of defense, indemnification and liability;a downgrade of the credit rating of our indebtedness, which could give rise to an obligation to redeem existing indebtedness;the possibility that competing offers will be made to acquire Magellan Health;the inability to retain key personnel; disruption from the announcement, pendency and/or completion and/or integration of the Magellan Acquisition or the integration of the WellCare Acquisition, or similar risks from other acquisitions we may announce or complete from time to time, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical utilization rates due to the impact of COVID-19;competition; membership and revenue declines or unexpected trends; changes in healthcare practices, new technologies, and advances in medicine; increased healthcare costs; changes in economic, political or market conditions; changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act (ACA) and the Health Care and Education Affordability Reconciliation Act, collectively referred to as the ACA and any regulations enacted thereunder that may result from changing political conditions, the new administration or judicial actions, including the ultimate outcome in “Texas v. United States of America” regarding the constitutionality of the ACA; rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting our government businesses; our ability to adequately price products; tax matters; disasters or major epidemics; changes in expected contract start dates; provider, state, federal, foreign and other contract changes and timing of regulatory approval of contracts; the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare, TRICARE or other customers); the difficulty of predicting the timing or outcome of pending or future legal and regulatory proceedings or government investigations; challenges to our contract awards; cyber-attacks or other privacy or data security incidents; the possibility that the expected synergies and value creation from acquired businesses, including businesses we may acquire in the future, will not be realized, or will not be realized within the expected time period; the exertion of management’s time and our resources, and other expenses incurred and business changes required in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for acquisitions; disruption caused by significant completed and pending acquisitions making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred in connection with the completion and/or integration of acquisition transactions; changes in expected closing dates, estimated purchase price and accretion for acquisitions; the risk that acquired businesses will not be integrated successfully; restrictions and limitations in connection with our indebtedness; our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth; availability of debt and equity financing, on terms that are favorable to us; inflation; foreign currency fluctuations; and risks and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission. This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition and results of operations, in our filings with the Securities and Exchange Commission (SEC), including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative costs.

 [Tables Follow]


CENTENE CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(In millions, except shares in thousands and per share data in dollars)


December 31,
2020


December 31,
2019


ASSETS


(Unaudited)

Current assets:

Cash and cash equivalents

$

10,800

$

12,123

Premium and trade receivables

9,696

6,247

Short-term investments

1,580

863

Other current assets

1,317

1,090

Total current assets

23,393

20,323

Long-term investments

12,853

7,717

Restricted deposits

1,060

658

Property, software and equipment, net

2,774

2,121

Goodwill

18,652

6,863

Intangible assets, net

8,388

2,063

Other long-term assets

1,599

1,249

Total assets

$

68,719

$

40,994


LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND 
     STOCKHOLDERS’ EQUITY

Current liabilities:

Medical claims liability

$

12,438

$

7,473

Accounts payable and accrued expenses

7,069

4,164

Return of premium payable

1,458

824

Unearned revenue

523

383

Current portion of long-term debt

97

88

Total current liabilities

21,585

12,932

Long-term debt

16,682

13,638

Deferred tax liability

1,534

189

Other long-term liabilities

2,956

1,543

Total liabilities

42,757

28,302

Commitments and contingencies

Redeemable noncontrolling interests

77

33

Stockholders’ equity:

Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or
outstanding at December 31, 2020 and December 31, 2019

Common stock, $0.001 par value; authorized 800,000 shares; 598,249 issued and
581,479 outstanding at December 31, 2020, and 421,508 issued and 415,048
outstanding at December 31, 2019

1

Additional paid-in capital

19,459

7,647

Accumulated other comprehensive earnings

337

134

Retained earnings

6,792

4,984

Treasury stock, at cost (16,770 and 6,460 shares, respectively)

(816)

(214)

Total Centene stockholders’ equity

25,773

12,551

Noncontrolling interest

112

108

Total stockholders’ equity

25,885

12,659

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

$

68,719

$

40,994

 


CENTENE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


(In millions, except shares in thousands and per share data in dollars)


(Unaudited)


Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019


Revenues:

Premium

$

25,559

$

17,210

$

100,055

$

67,439

Service

886

802

3,745

2,925

Premium and service revenues

26,445

18,012

103,800

70,364

Premium tax and health insurer fee

1,843

851

7,315

4,275

Total revenues

28,288

18,863

111,115

74,639


Expenses:

Medical costs

22,605

15,220

86,264

58,862

Cost of services

784

687

3,303

2,465

Selling, general and administrative expenses

2,721

1,733

9,867

6,533

Amortization of acquired intangible assets

192

64

719

258

Premium tax expense

1,595

882

6,332

4,469

Health insurer fee expense

376

1,476

Impairment

72

271

Total operating expenses

28,273

18,586

108,033

72,858

Earnings from operations

15

277

3,082

1,781


Other income (expense):

Investment and other income

105

126

480

443

Debt extinguishment costs

(17)

(30)

(61)

(30)

Interest expense

(177)

(113)

(728)

(412)

Earnings (loss) before income tax expense

(74)

260

2,773

1,782

Income tax expense (benefit)

(55)

58

979

473

Net earnings (loss)

(19)

202

1,794

1,309


Loss attributable to noncontrolling interests

7

7

14

12


Net earnings (loss) attributable to Centene Corporation

$

(12)

$

209

$

1,808

$

1,321


Net earnings per common share attributable to Centene Corporation:

Basic earnings (loss) per common share

$

(0.02)

$

0.50

$

3.17

$

3.19

Diluted earnings (loss) per common share

$

(0.02)

$

0.49

$

3.12

$

3.14


Weighted average number of common shares outstanding:

Basic

580,129

414,044

570,722

413,487

Diluted

580,129

422,262

579,135

420,409

 


CENTENE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions, unaudited)


Year Ended December 31,


2020


2019


Cash flows from operating activities:

Net earnings

$

1,794

$

1,309

Adjustments to reconcile net earnings to net cash provided by operating activities

Depreciation and amortization

1,259

643

Stock compensation expense

281

177

Impairment

72

271

Loss on debt extinguishment

57

30

Deferred income taxes

(51)

55

Gain on divestiture

(104)

Changes in assets and liabilities

Premium and trade receivables

(52)

(1,076)

Other assets

(30)

(234)

Medical claims liabilities

1,117

578

Unearned revenue

(528)

(9)

Accounts payable and accrued expenses

585

(421)

Other long-term liabilities

1,078

185

Other operating activities, net

25

(25)

Net cash provided by operating activities

5,503

1,483


Cash flows from investing activities:

Capital expenditures

(869)

(730)

Purchases of investments

(7,402)

(2,575)

Sales and maturities of investments

4,921

1,809

Acquisitions, net of cash acquired

(4,049)

(36)

Divestiture proceeds, net of divested cash

466

Other investing activities, net

(22)

Net cash used in investing activities

(6,955)

(1,532)


Cash flows from financing activities:

Proceeds from long-term debt

5,107

24,721

Payments of long-term debt

(4,067)

(17,803)

Common stock repurchases

(626)

(75)

Payments for debt extinguishment

(81)

(23)

Debt issuance costs

(120)

(25)

Other financing activities, net

47

37

Net cash provided by financing activities

260

6,832

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

18

(2)

Net increase (decrease) in cash, cash equivalents and restricted cash and cash 
     equivalents

(1,174)

6,781


Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period

12,131

5,350


Cash, cash equivalents, and restricted cash and cash equivalents, end of period

$

10,957

$

12,131

Supplemental disclosures of cash flow information:

Interest paid

$

725

$

374

Income taxes paid

$

1,191

$

612

Equity issued in connection with acquisitions

$

11,526

$

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the Consolidated
Balance Sheets to the totals above:


2020


2019

Cash and cash equivalents

$

10,800

$

12,123

Restricted cash and cash equivalents, included in restricted deposits

157

8

Total cash, cash equivalents, and restricted cash and cash equivalents

$

10,957

$

12,131

 


CENTENE CORPORATION


SUPPLEMENTAL FINANCIAL DATA


Q4


Q3


Q2


Q1


Q4


2020


2020


2020


2020


2019

Traditional Medicaid (1)

12,055,400

11,662,100

11,124,800

10,397,900

7,573,600

High Acuity Medicaid (2)

1,554,700

1,521,700

1,498,900

1,488,200

1,110,000

Total Medicaid

13,610,100

13,183,800

12,623,700

11,886,100

8,683,600

Commercial

2,633,600

2,719,500

2,763,300

2,728,200

2,331,100

Medicare (3)

955,400

953,800

936,500

918,400

359,600

Medicare PDP

4,469,400

4,436,400

4,443,100

4,416,500

International

597,700

599,900

600,400

599,900

599,800

Correctional

147,200

167,200

166,000

172,000

180,000

Total at-risk membership

22,413,400

22,060,600

21,533,000

20,721,100

12,154,100

TRICARE eligibles

2,877,900

2,877,900

2,864,700

2,864,800

2,860,700

Non-risk membership

231,600

227,200

223,300

216,200

227,000

Total

25,522,900

25,165,700

24,621,000

23,802,100

15,241,800


(1) Membership includes TANF, Medicaid Expansion, CHIP, Foster Care and Behavioral Health


(2) Membership includes ABD, IDD, LTSS and MMP Duals


(3) Membership includes Medicare Advantage and Medicare Supplement


NUMBER OF EMPLOYEES

71,300

71,100

71,800

69,700

56,600


DAYS IN CLAIMS PAYABLE (4)

51

52

51

51

45


(4)  On a pro-forma basis, DCP for Q1 2020 was 47, reflecting adjusted medical costs to include a full quarter of WellCare operations.


CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions)

Regulated

$

24,361

$

22,623

$

23,655

$

19,358

$

14,204

Unregulated

1,932

1,986

1,982

2,871

7,157

Total

$

26,293

$

24,609

$

25,637

$

22,229

$

21,361


DEBT TO CAPITALIZATION

39.3

%

39.4

%

40.0

%

42.2

%

52.0

%


DEBT TO CAPITALIZATION EXCLUDING 
     NON-RECOURSE DEBT (5)

39.0

%

39.1

%

39.7

%

41.9

%

51.7

%


(5) Excluding non-recourse debt of $230 million and $194 million at December 31, 2020 and December 31, 2019, respectively. As of December 31, 2019, 
     excluding non-recourse debt and the senior debt issued to fund the WellCare acquisition in advance of closing, our debt to capital was 34.3%. The 
     WellCare related senior notes represent $6,921 million of long-term debt as of December 31, 2019.

 


OPERATING RATIOS


Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

HBR

88.4

%

88.4

%

86.2

%

87.3

%

SG&A expense ratio

10.3

%

9.6

%

9.5

%

9.3

%

Adjusted SG&A expense ratio

9.7

%

9.5

%

8.9

%

9.2

%

 


MEDICAL CLAIMS LIABILITY

The changes in medical claims liability are summarized as follows (in millions):


Balance, December 31, 2019

$

7,473

Less: Reinsurance recoverable

20

Balance, December 31, 2019, net

7,453

Acquisitions and divestitures

3,856

Incurred related to:

Current period

86,765

Prior period

(501)

Total incurred

86,264

Paid related to:

Current period

78,838

Prior period

6,320

Total paid

85,158

Balance, December 31, 2020, net

12,415

Plus: Reinsurance recoverable

23


Balance, December 31, 2020

$

12,438

Centene’s claims reserving process utilizes a consistent actuarial methodology to estimate Centene’s ultimate liability. Any
reduction in the “Incurred related to: Prior period” amount may be offset as Centene actuarially determines “Incurred related to:
Current period.” As such, only in the absence of a consistent reserving methodology would favorable development of prior period
claims liability estimates reduce medical costs. Centene believes it has consistently applied its claims reserving methodology.
Additionally, approximately $107 million was recorded as a reduction from premium revenues resulting from development within
“Incurred related to: Prior period” due to minimum HBR and other return of premium programs.

The amount of the “Incurred related to: Prior period” above represents favorable development and includes the effects of reserving
under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial
periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and
cost trends for dates of service December 31, 2019, and prior.

 



Our Response to COVID-19


Demonstrating our commitment to our members and the communities we serve, employees, and providers and government partners.


Members and Communities

Waiving COVID-19 related prior authorizations and member cost sharing

for related screening, testing and treatment for all Medicare, Medicaid and Marketplace members.

Delivering 50,000 gift cards, with $35 of value each, to be used to purchase essential

healthcare and educational items including diapers, over-the-counter medicines, cleaning supplies and books.

Donating 1 million meals a month for 12 months to feed our neighbors in communities all over the country.

Providing grants to Area Agencies on Aging to enable grocery and

meal deliveries for members with disabilities who are unable to access nutritious food.

Matching funds in partnership with workforce development boards and other safety net organizations

to prepare them for a career in healthcare to support the direct care workforce and newly unemployed individuals.

Investment in new technology and supplies to improve access to quality healthcare for the incarcerated population, including expanding PPE supplies in prisons and expanding the partnership with the Concordance Academy and other charitable agencies to enhance long-term outcomes for incarcerated individuals.

Creation of Health Disparities Task Force, focused on studying the causes of healthcare disparities, recommending improvements in policies and practices and performing outreach to key leaders in impacted areas to increase education.

Waiving all cost sharing for in-network primary care, behavioral health and telehealth costs for Medicare Advantage members starting in May of 2020.  In addition, offering our Community Connections Help Line, available to anyone in need of help beyond medical care, as well as expanded benefits including extended meal program benefits, over-the-counter (OTC) allowances, and annual wellness visit incentives to help members in need of extra support.

Formed partnership with the National Minority Quality Forum (NMQF) to study the impact of COVID on racial minorities and underserved communities.

Expanded partnership with Quartet Health to help members quickly and easily access behavioral health care.

Partnered with Samsung Electronics America to expand access to telehealth for individuals living in rural and underserved communities.


Employees

Providing 10 additional working days of paid leave to support employees.

Waiving prior authorizations and employee cost sharing for COVID-19 related screening, testing and treatment.

Encouraging employees to work from home, with approximately 90% working remotely.

Providing essential workers with a one-time payment of $750

in appreciation and recognition of their willingness to serve in their important office roles.

Scheduling essential workers to preserve social distancing,

and enhancing health and safety protocols such as daily cleaning and disinfecting for essential workers.

Establishing a Medical Reserve Leave policy to support clinical staff

paid leave and benefits for up to three months of volunteer COVID pandemic service.


Providers and Government Partners

Expediting the rollout of FirstNet that will streamline access to affordable,

high-speed wireless broadband services for primary care providers in rural and underserved communities.

Dedicating funds to the Medicaid Telehealth Partnership’s efforts,

which will be used to purchase equipment and provide training and technical assistance to FQHCs.

Expediting the distribution of approximately 2 million pieces of PPE

including safety goggles, facemasks, hand sanitizers and disaster kits.

Extending grants to providers to assist with the upfront investment costs of new devices and equipment.

Developing a new Provider Accessibility Initiative (PAI) COVID-19 Web Series to provide timely recommendations on how

providers and organizations can deliver disability-competent care during the pandemic and beyond.

In partnership with Quest Diagnostics, distributing 25,000 COVID test kits each week to FQHCs in ten states or districts across the country.

Investments in Mental Health Resources, including training and support to thousands of front-line providers, donations to local organizations with increased demand for ‘warmline’ call centers, and an investment in the National Council for Behavioral Health for a virtual training program.

Donated $500,000 to the National Domestic Violence Hotline.

 

Cision View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-2020-results-301224417.html

SOURCE Centene Corporation

Theravance Biopharma to Report Fourth Quarter and Full Year 2020 Financial Results on February 23, 2021

PR Newswire

DUBLIN, Feb. 9, 2021 /PRNewswire/ — Theravance Biopharma, Inc. (NASDAQ: TBPH), a diversified biopharmaceutical company primarily focused on the discovery, development and commercialization of organ-selective medicines, will report its fourth quarter and full year 2020 financial results and provide a business update after market close on Tuesday, February 23, 2021. An accompanying conference call and simultaneous webcast will be hosted at 5:00 p.m. ET (2:00 p.m. PT/10:00 p.m. GMT) that day.

Conference Call Information

To participate in the live call by telephone, please dial (855) 296-9648 from the US or (920) 663-6266 for international callers, using the confirmation code 9469708. Those interested in listening to the conference call live via the internet may do so by visiting Theravance Biopharma’s website at www.theravance.com, under the Investor Relations section, Events and Presentations.

A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through March 25, 2021. An audio replay will also be available through 8:00 p.m. ET on March 2, 2021 by dialing (855) 859-2056 from the US, or (404) 537-3406 for international callers, and then entering confirmation code 9469708.

About Theravance Biopharma

Theravance Biopharma, Inc. is a diversified biopharmaceutical company primarily focused on the discovery, development and commercialization of organ-selective medicines. Our purpose is to create transformational medicines to improve the lives of patients suffering from serious illnesses. Our research is focused in the areas of inflammation and immunology.

In pursuit of our purpose, we apply insights and innovation at each stage of our business and utilize our internal capabilities and those of partners around the world. We apply organ-selective expertise to biologically compelling targets to discover and develop medicines designed to treat underserved localized diseases and to limit systemic exposure, in order to maximize patient benefit and minimize risk. These efforts leverage years of experience in developing lung-selective medicines to treat respiratory disease, including FDA approved YUPELRI® (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD). Our pipeline of internally discovered programs is targeted to address significant patient needs.

We have an economic interest in potential future payments from Glaxo Group Limited or one of its affiliates (GSK) pursuant to its agreements with Innoviva, Inc. relating to certain programs, including TRELEGY ELLIPTA. 

For more information, please visit www.theravance.com.

THERAVANCE BIOPHARMA®, THERAVANCE®, and the Cross/Star logo are registered trademarks of the Theravance Biopharma group of companies (in the U.S. and certain other countries).

YUPELRI® is a United States registered trademark of Mylan Specialty L.P. Trademarks, trade names or service marks of other companies appearing on this press release are the property of their respective owners.


Contact Information:

Gail Cohen

Corporate Communications
917-214-6603
[email protected]

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/theravance-biopharma-to-report-fourth-quarter-and-full-year-2020-financial-results-on-february-23-2021-301224371.html

SOURCE Theravance Biopharma, Inc.

Edgewell Personal Care Announces First Quarter Fiscal 2021 Results

Net Sales Flat with the Prior Year; Gross Margin Expansion

Company Maintains its Previously Provided Financial Outlook for Fiscal 2021

PR Newswire

SHELTON, Conn., Feb. 9, 2021 /PRNewswire/ — Edgewell Personal Care Company (NYSE: EPC) today announced results for its first fiscal quarter 2021 ended December 31, 2020. 


Executive Summary

  • Net sales were $451.1 million, a decrease of 0.6%, when compared to the prior year period.
  • Organic net sales were flat when compared to the prior year period. (Organic basis excludes the impact of the Cremo acquisition, the sale of the Infant and Pet Care business, and the translational impact from currency.)
  • GAAP Diluted Earnings Per Share (“EPS”) were $0.32 for the first quarter compared to $0.41 in the prior year period.
  • Adjusted EPS were $0.43 for the first quarter, compared to $0.55 in the prior year period.
  • The Company ended the fiscal first quarter with $281 million in cash on hand, access to an undrawn $425 million credit facility and a net debt leverage ratio of 2.9 times. The Company returned $9.2 million to shareholders through share repurchase.
  • The Board of Directors declared a cash dividend of $0.15 per common share for the first fiscal quarter.

The Company reports and forecasts results on a GAAP and Non-GAAP basis and has reconciled Non-GAAP results and outlook to the most directly comparable GAAP measures later in this release.  See Non-GAAP Financial Measures for a more detailed explanation, including definitions of various Non-GAAP terms used in this release.  All comparisons used in this release are with the same period in the prior fiscal year unless otherwise stated.

“Fiscal 2021 is off to a good start with our results reflective of strong execution against our key strategic priorities.  We delivered flat organic net sales, expanded gross margin, invested in our strategic initiatives, announced a new $0.15 per share dividend, and repurchased shares.  From a portfolio perspective, Wet Ones, Men’s Grooming and Women’s Wet Shave were notable out-performers and our e-commerce channel continued to deliver accelerated sales growth,”  said Rod Little, Edgewell’s President and Chief Executive Officer.

Mr. Little continued, “Despite the ongoing pandemic, and likely increasing headwinds in the near-term our teams continue to execute with excellence.  We remain focused on delivering on our financial outlook for 2021 and advancing our long-term strategy to transform Edgewell into a growing, sustainable and consumer centric company delivering stable top line growth and predictable profit and cash generation.”


Fiscal 1Q 2021 Operating Results (Unaudited)

Net sales were $451.1 million in the quarter, a decrease of 0.6%, as compared to the prior year period.  Excluding a $16.6 million positive impact from the Cremo acquisition, $26.8 million negative impact from the sale of the Infant and Pet Care business, and a $7.3 million favorable impact from currency translation, organic net sales was flat, driven by growth in Wet Ones, Men’s Grooming, Women’s Systems and Private Label, offset by declines in Sun Care and Feminine Care.  While COVID-19 continued to negatively impact the Wet Shave and Sun Care categories, the impact was partly mitigated by unanticipated higher demand in several International markets ahead of new, more stringent COVID-19 related lockdowns.

Gross profit was $193.3 million during the first quarter of fiscal 2021, as compared to $193.1 million in the prior year quarter.

Gross margin as a percent of net sales for the first quarter of fiscal 2021 was 42.9%, representing a 40-basis point increase over the prior year quarter gross margin percentage of 42.5%. Adjusted gross margin percentage increased 70-basis points driven primarily by Project Fuel savings, the positive impact of acquisitions and divestitures and lower cost of materials, partially offset by unfavorable product mix and pricing.

Advertising and sales promotion expense (“A&P”) was $41.2 million, or 9.1% of net sales, as compared to $41.1 million, or 9.1% of net sales in the prior year period.  Increased spending in Men’s Grooming, Wet Ones and Wet Shave was more than offset by lower spending in Sun Care, due to COVID-19.  Both Advertising and Digital spending increased significantly compared to the prior year.

Selling, general and administrative expense (“SG&A”) was $93.1 million, or 20.6% of net sales, as compared to $95.0 million, or 20.9% of net sales in the prior year period.  Adjusted SG&A, as a percent of net sales, increased 100-basis points, driven principally by $3.3 million of operating costs associated with the Cremo business. Increased investments in strategic initiatives, higher equity compensation costs and the unfavorable impact from foreign exchange was offset by Project Fuel savings and lower discretionary spend.

The Company recorded pre-tax restructuring and other non-recurring expenses of $4.4 million in the quarter in support of Project Fuel, consisting largely of severance and outplacement, IT enablement and consulting costs, as well as $3.0 million in acquisition and integration costs related to the Cremo acquisition.

Operating income was $41.6 million during the quarter compared to $37.1 million in the prior year quarter.  Adjusted operating income was $49.0 million in the quarter, compared to $51.6 million in the prior year period. 

The effective tax rate for the first three months of fiscal 2021 was 29.7% as compared to 24.4% in the prior year period.  The adjusted effective tax rate for the first three months of fiscal 2021 was 28.4%, up from the prior year period adjusted tax rate of 23.2%.  The effective tax rate reflects the unfavorable impact of U.S. versus foreign earnings and the impact of the permanent adjustments related to limitations associated with Section 162(m) of the Internal Revenue Code.

GAAP net earnings for the quarter were $17.7 million or $0.32 per share compared to $22.4 million or $0.41 per share in the first quarter of fiscal 2020. Adjusted net earnings in the quarter were $23.3 million or $0.43 per share, as compared to $29.9 million or $0.55 per share in the prior year period. Adjusted net earnings were negatively impacted by the combined $3.7 million in higher interest expense and lower other income, and a $2.2 million net impact from acquisitions and divestitures, as compared to the prior year period. Adjusted EBITDA was $72.2 million compared to $76.1 million in the prior year.

Net cash used by operating activities was $82.5 million for the first three months of fiscal 2021 compared to $46.9 million used in operating activities in the prior year period.

Project Fuel

Project Fuel is an enterprise-wide transformational initiative that was launched in the second fiscal quarter of 2018, to address all aspects of Edgewell’s business and cost structure, simplifying and transforming the organization, structure and key processes. Project Fuel is facilitating further re-investment in the Company’s growth strategy while enabling Edgewell to achieve its desired future state operations.

The Company expects Project Fuel will generate $265 to $275 million in total annual gross savings by the end of the 2021 fiscal year. The savings generated will be used to fuel investments and brand building in strategic growth initiatives, offset anticipated operational cost headwinds from inflation and other rising input costs and improve the overall profitability and cash flow of the Company.

To implement the restructuring element of Project Fuel, the Company expects to incur one-time pre-tax charges of approximately $160 to $165 million through the end of the 2021 fiscal year.

Fiscal first quarter 2021 Project Fuel related gross savings were approximately $16 million, bringing cumulative gross savings to approximately $228 million.


Fiscal 1Q 2021 Operating Segment Results (Unaudited)

Wet Shave (Men’s Systems, Women’s Systems, Disposables, and Shave Preps)

Wet Shave net sales increased $2.1 million, or 0.8%, as compared to the prior year period. Excluding the impact of currency movements, organic net sales decreased $4.2 million or 1.5%, a significant sequential improvement, reflecting further stabilization of the business.  Although COVID-19 continued to impact the category, and pricing and mix were unfavorable, volumes increased, largely driven by sales and market share gains in Women’s Systems, growth in Private Label across Men’s and Women’s, and improving trends in Men’s Systems.  By region, North America organic net sales decreased 2.8% while International markets decreased 0.4%. Wet Shave segment profit decreased $0.3 million, or 0.6%, as slightly higher gross margin was offset by increased A&P.

Sun and Skin Care (Sun Care, Wipes, Bulldog, Jack Black and Cremo)

Sun and Skin Care net sales increased $27.9 million, or 37.2%, as compared to the prior year period.  Excluding the impact of the Cremo acquisition and currency movements, organic net sales increased $10.5 million, or 14.0%.  Organic growth was driven by Wet Ones, increasing over 100%, and Men’s Grooming, which increased 12%.  Sun Care continued to be heavily impacted by COVID-19, declining 23% in the quarter.  Sun and Skin Care segment profit increased $5.1 million, driven by higher gross margin, reflecting higher volumes and favorable pricing, as well as reduced A&P spending in International Sun Care markets due to COVID-19.

Feminine Care (Tampons, Pads, and Liners)

Feminine Care net sales decreased $6.1 million, or 8.1%, as compared to the prior year period.  The decline in net sales was largely driven by overall category declines, on-going competitive pressure and the negative effect of distribution losses, most notably at Walmart.  Feminine Care segment profit decreased $4.3 million, or 32.8% as compared to the prior year period, driven by lower gross margin, reflecting lower volumes. 

In the first quarter of fiscal 2020, the Company completed the sale of the Infant and Pet Care business that made up the majority of the All Other segment. 


Dividend and Share Repurchase

On February 9, 2021, the Board of Directors declared a quarterly cash dividend of $0.15 per common share for the first fiscal quarter. The dividend is payable April 6, 2021 to stockholders of record as of the close of business on March 5, 2021.

In the quarter, the Company completed share repurchases of 250 thousand shares for a cost of $9.2 million.  The Company has 9.75 million shares of common stock available for repurchase in the future under the Boards previous authorization. 


Full Fiscal Year 2021 Financial Outlook

The Company is maintaining its previously provided outlook assumptions for fiscal 2021:

  • Reported net sales to increase mid-single digits
    • Includes: 160 basis-point net benefit from the Cremo acquisition and the Infant and Pet Care divestiture and a 160 basis-point benefit from currency translation
  • Organic sales to increase low-single digits
  • Adjusted operating profit margin to be consistent with fiscal 2020
    • Project Fuel costs of $25 to $30 million
    • Project Fuel Gross Savings of $50 to $60 million
  • GAAP EPS in the range of $2.18 to $2.38
    • Includes: Project Fuel restructuring charges, IT enablement costs, acquisition and integration costs
  • Adjusted EPS in the range of $2.62 to $2.82
  • Adjusted EBITDA in the range of $345 to $360 million
  • Adjusted effective tax rate in the range of 22.5% to 23.5%
  • Capital expenditures of approximately 3.0% of net sales
  • Free cash flow expected to be approximately 100% of non-GAAP net earnings

Webcast Information

In conjunction with this announcement, the Company will hold an investor conference call beginning at 8:00 a.m. Eastern Time today.  All interested parties may access a live webcast of this conference call at www.edgewell.com, under the “Investors,” and “News and Events” tabs or by using the following link:  http://ir.edgewell.com/news-and-events/events

For those unable to participate during the live webcast, a replay will be available on www.edgewell.com, under the “Investors,” “Financial Reports,” and “Quarterly Earnings” tabs. 

About Edgewell

Edgewell is a leading pure-play consumer products company with an attractive, diversified portfolio of established brand names such as Schick® and Wilkinson Sword® men’s and women’s shaving systems and disposable razors; Edge® and Skintimate® shave preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine care products; Banana Boat®, Hawaiian Tropic®, Bulldog®,  Jack Black®, and CREMO® sun and skin care products; and Wet Ones® moist wipes.  The Company has a broad global footprint and operates in more than 50 markets, including the U.S., Canada, Mexico, Germany, Japan, the U.K. and Australia, with approximately 5,800 employees worldwide.

Forward-Looking Statements.  This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  You should not place undue reliance on these statements.  Forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “expectation,” “anticipate,” “may,” “could,” “intend,” “belief,” “estimate,” “plan,” “target,” “predict,” “likely,” “will,” “should,” “forecast,” “outlook,” or other similar words or phrases.  These statements are not based on historical facts, but instead reflect the Company’s expectations, estimates or projections concerning future results or events, including, without limitation, the future earnings and performance of Edgewell or any of its businesses.  Many factors outside our control (including the ongoing COVID-19 pandemic), could affect the realization of these estimates.  These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause the Company’s actual results to differ materially from those indicated by those statements.  The Company cannot assure you that any of its expectations, estimates or projections will be achieved.  The forward-looking statements included in this document are only made as of the date of this document and the Company disclaims any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

In addition, other risks and uncertainties not presently known to the Company or that it presently considers immaterial could significantly affect the accuracy of any such forward-looking statements.  Risks and uncertainties include those detailed from time to time in the Company’s publicly filed documents, including in Item 1A. Risk Factors of Part I of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on November 20, 2020.

Non-GAAP Financial Measures.  While the Company reports financial results in accordance with generally accepted accounting principles (“GAAP”) in the U.S., this discussion also includes non-GAAP measures.  These non-GAAP measures are referred to as “adjusted” or “organic” and exclude items such as restructuring and related costs, acquisition and integration costs, the gain on sale of the Infant and Pet Care business, and advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses.  Reconciliations of non-GAAP measures, including reconciliations of measures related to the Company’s fiscal 2021 financial outlook, are included within the Notes to Condensed Consolidated Financial Statements included with this release.

This non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.  The Company uses this non-GAAP information internally to make operating decisions and believes it is helpful to investors because it allows more meaningful period-to-period comparisons of ongoing operating results.  The information can also be used to perform analysis and to better identify operating trends that may otherwise be masked or distorted by the types of items that are excluded.  This non-GAAP information is a component in determining management’s incentive compensation.  Finally, the Company believes this information provides a higher degree of transparency.  The following provides additional detail on the Company’s non-GAAP measures.

  • The Company analyzes its net sales and segment profit on an organic basis to better measure the comparability of results between periods. Organic net sales exclude the impact of changes in foreign currency, acquisitions and dispositions. This information is provided because these fluctuations can distort the underlying change in net sales either positively or negatively. For the quarter ended December 31, 2020, the impact of dispositions includes net sales and segment profit activity for the Infant and Pet Care business, which was sold in December 2019. For the quarter December 31, 2020, the impact of acquisitions includes net sales and segment profit activity for the Cremo acquisition, which was acquired on September 2, 2020.
  • The Company utilizes “adjusted” non-GAAP measures including gross profit, SG&A, operating income, income taxes, net earnings, diluted earnings per share, and EBITDA to internally make operating decisions. The following items are excluded when analyzing non-GAAP measures: restructuring and related costs, acquisition and integration costs, the gain on sale of the Infant and Pet Care business, and advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses.
  • Free cash flow is defined as net cash from operating activities less capital expenditures plus collections of deferred purchase price of accounts receivable sold and proceeds from sales of fixed assets. Free cash flow conversion is defined as free cash flow as a percentage of net earnings adjusted for the net impact of non-cash impairments.
  • Net debt leverage ratio is defined as total debt less cash divided by adjusted EBITDA.

 


EDGEWELL PERSONAL CARE COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited, in millions, except per share data)


Three Months Ended

December 31,


2020


2019

Net sales

$

451.1

$

454.0

Cost of products sold

257.8

260.9


Gross profit

193.3

193.1

Selling, general and administrative expense

93.1

95.0

Advertising and sales promotion expense

41.2

41.1

Research and development expense

13.7

13.8

Restructuring charges

3.7

6.1


Operating income

41.6

37.1

Gain on sale of Infant and Pet Care business

(5.2)

Interest expense associated with debt

17.4

14.3

Other income, net

(1.0)

(1.6)


Earnings before income taxes

25.2

29.6

Income tax provision

7.5

7.2


Net earnings

$

17.7

$

22.4


Earnings per share:

    Basic net earnings per share

0.33

0.41

    Diluted net earnings per diluted share

0.32

0.41


Weighted-average shares outstanding:

     Basic

54.4

54.3

     Diluted

54.8

54.4

See Accompanying Notes.

 


EDGEWELL PERSONAL CARE COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)


December 31,

2020


September 30,

2020


Assets

Current assets

Cash and cash equivalents

$

280.8

$

364.7

Trade receivables, less allowance for doubtful accounts

167.0

158.8

Inventories

337.0

314.1

Other current assets

148.6

146.0

Total current assets

933.4

983.6

Property, plant and equipment, net

368.9

370.9

Goodwill

1,167.7

1,159.7

Other intangible assets, net

927.5

928.1

Other assets

98.6

98.6


Total assets

$

3,496.1

$

3,540.9


Liabilities and Shareholders’ Equity

Current liabilities

Notes payable

24.1

21.1

Accounts payable

182.7

181.9

Other current liabilities

222.1

307.5

Total current liabilities

428.9

510.5

Long-term debt

1,238.4

1,237.9

Deferred income tax liabilities

103.9

102.5

Other liabilities

259.7

257.1


Total liabilities

2,030.9

2,108.0

Shareholders’ equity

Common shares

0.7

0.7

Additional paid-in capital

1,618.8

1,631.8

Retained earnings

791.6

782.4

Common shares in treasury at cost

(784.2)

(790.4)

Accumulated other comprehensive loss

(161.7)

(191.6)


Total shareholders’ equity

1,465.2

1,432.9


Total liabilities and shareholders’ equity

$

3,496.1

$

3,540.9

See Accompanying Notes.

  


EDGEWELL PERSONAL CARE COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


Three Months Ended

December 31,


2020


2019


Cash Flow from Operating Activities

Net earnings

$

17.7

$

22.4

Depreciation and amortization

22.2

22.5

Share-based compensation expense

5.3

4.9

Loss on sale of assets

0.2

0.2

Gain on sale of Infant and Pet Care business

(5.2)

Deferred compensation payments

(0.2)

(1.9)

Deferred income taxes

(16.7)

Other, net

1.0

5.4

Changes in operating assets and liabilities

(128.7)

(78.5)

Net cash used by operating activities

(82.5)

(46.9)


Cash Flow from Investing Activities

Capital expenditures

(10.2)

(7.6)

Proceeds from sale of Infant and Pet Care business

7.5

95.8

Acquisition of Cremo

(0.3)

Collection of deferred purchase price on accounts receivable sold

1.5

2.8

Other, net

(0.8)

(1.3)

Net cash (used by) from investing activities

(2.3)

89.7


Cash Flow from Financing Activities

Cash proceeds from debt with original maturities greater than 90 days

50.0

Cash payments on debt with original maturities greater than 90 days

(167.0)

Net increase (decrease) in debt with original maturities of 90 days or less

2.5

(0.1)

Repurchase of shares

(9.2)

Net financing inflow (outflow) from the Accounts Receivable Facility

4.2

(14.9)

Employee shares withheld for taxes

(3.0)

(1.5)

Other, net

(2.4)

Net cash used by financing activities

(5.5)

(135.9)

Effect of exchange rate changes on cash

6.4

3.3

Net decrease in cash and cash equivalents

(83.9)

(89.8)

Cash and cash equivalents, beginning of period

364.7

341.6

Cash and cash equivalents, end of period

$

280.8

$

251.8

See Accompanying Notes.

EDGEWELL PERSONAL CARE COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except per share data)

Note 1 —  Segments

The Company conducts its business in the following three segments: Wet Shave, Sun and Skin Care, and Feminine Care (collectively, the “Segments”, and each individually, a “Segment”).  Segment performance is evaluated based on segment profit, exclusive of general corporate expenses, share-based compensation costs, other charges such as restructuring and integration costs, and the amortization of intangible assets.  Financial items, such as interest income and expense, are managed on a global basis at the corporate level.  The exclusion of such charges from segment results reflects management’s view on how it evaluates segment performance.

The Company completed the sale of its Infant and Pet Care business in December 2019.  As a result, no additional Net Sales or Segment Profit will be reported for the All Other segment in subsequent periods. 

Segment net sales and profitability are presented below:


Three Months Ended

December 31,


2020


2019


Net Sales

Wet Shave

$

279.1

$

277.0

Sun and Skin Care

103.0

75.1

Feminine Care

69.0

75.1

All Other

26.8


Total net sales

$

451.1

$

454.0


Segment Profit

Wet Shave

$

52.6

$

52.9

Sun and Skin Care

5.2

0.1

Feminine Care

8.8

13.1

All Other

3.1


Total segment profit

66.6

69.2

General corporate and other expenses

(12.1)

(13.3)

Restructuring and related costs

(4.4)

(8.0)

Acquisition and integration costs

(3.0)

(6.2)

Gain on sale of Infant and Pet Care business

5.2

Feminine and Infant Care evaluation costs

(0.3)

Amortization of intangibles

(5.5)

(4.3)

Interest and other expenses, net

(16.4)

(12.7)


Total earnings before income taxes

$

25.2

$

29.6

Refer to Note 2 GAAP to Non-GAAP Reconciliations for the income statement location of non-GAAP adjustments to earnings before income taxes.

Note 2 — GAAP to Non-GAAP Reconciliations

The following tables provide a GAAP to Non-GAAP reconciliation of certain line items from the Condensed Consolidated Statement of Earnings:


Three Months Ended December 31, 2020


Gross Profit


SG&A


Operating
Income


EBIT


Income
taxes


Net
Earnings


Diluted
EPS


GAAP — Reported

$

193.3

$

93.1

$

41.6

$

25.2

$

7.5

$

17.7

$

0.32

Restructuring and related costs

0.1

0.6

4.4

4.4

1.1

3.3

0.07

Acquisition and integration costs

1.3

1.7

3.0

3.0

0.7

2.3

0.04


Total Adjusted Non-GAAP

$

194.7

$

90.8

$

49.0

$

32.6

$

9.3

$

23.3

$

0.43

GAAP as a percent of net sales

42.9

%

20.6

%

9.2

%

GAAP effective tax rate

29.7

%

Adjusted as a percent of net sales

43.2

%

20.1

%

10.9

%

Adjusted effective tax rate

28.4

%


Three Months Ended December 31, 2019


Gross Profit


SG&A


Operating
Income


EBIT


Income
taxes


Net
Earnings


Diluted
EPS


GAAP — Reported

$

193.1

$

95.0

$

37.1

$

29.6

$

7.2

$

22.4

$

0.41

Restructuring and related costs

1.9

8.0

8.0

1.7

6.3

0.13

Acquisition and integration costs

6.2

6.2

6.2

1.6

4.6

0.08

Gain on sale of Infant and Pet Care business

(5.2)

(1.6)

(3.6)

(0.07)

Feminine and Infant Care evaluation costs

0.3

0.3

0.3

0.1

0.2


Total Adjusted Non-GAAP

$

193.1

$

86.6

$

51.6

$

38.9

$

9.0

$

29.9

$

0.55

GAAP as a percent of net sales

42.5

%

20.9

%

8.2

%

GAAP effective tax rate

24.4

%

Adjusted as a percent of net sales

42.5

%

19.1

%

11.4

%

Adjusted effective tax rate

23.2

%

Note 3 – Net Sales and Profit by Segment

Operations for the Company are reported via three Segments with impact of the sale of the Infant and Pet Care business included in All Other.  The impact of acquisitions includes the operations of Cremo which was acquired in September 2020. The following tables present changes in net sales and segment profit for the quarter ended December 31, 2020, as compared to the corresponding period in the prior year, and provide a reconciliation of organic net sales to reported amounts.


Net Sales (In millions – Unaudited)


Three Months Ended December 31, 2020


Wet

Shave


Sun and Skin

Care


Feminine

Care


All

Other


Total

Net Sales – Q1 FY20

$

277.0

$

75.1

$

75.1

$

26.8

$

454.0

Organic

(4.2)

(1.5)

%

10.5

14.0

%

(6.3)

(8.4)

%

%

%

Impact of acquisitions

%

16.6

22.1

%

%

%

16.6

3.7

%

Impact of disposition

%

%

%

(26.8)

(100.0)

%

(26.8)

(5.9)

%

Impact of currency

6.3

2.3

%

0.8

1.1

%

0.2

0.3

%

%

7.3

1.6

%

Net Sales – Q1 FY21

$

279.1

0.8

%

$

103.0

37.2

%

$

69.0

(8.1)

%

$

(100.0)

%

$

451.1

(0.6)

%


Segment Profit (In millions – Unaudited)


Three Months Ended December 31, 2020


Wet

Shave


Sun and Skin

Care


Feminine

Care


All

Other


Total

Segment Profit – Q1 FY20

$

52.9

$

0.1

$

13.1

$

3.1

$

69.2

Organic

(1.6)

(3.0)

%

2.9

2,900.0

%

(4.3)

(32.8)

%

%

(3.0)

(4.3)

%

Impact of acquisitions

%

2.4

2,400.0

%

%

%

2.4

3.5

%

Impact of disposition

%

%

%

(3.1)

(100.0)

%

(3.1)

(4.5)

%

Impact of currency

1.3

2.4

%

(0.2)

(200.0)

%

%

%

1.1

1.6

%

Segment Profit – Q1 FY21

$

52.6

(0.6)

%

$

5.2

5,100.0

%

$

8.8

(32.8)

%

$

(100.0)

%

$

66.6

(3.7)

%

Note 4 – EBITDA

The Company reports financial results on a GAAP and adjusted basis.  The table below is used to reconcile Net earnings to EBITDA and Adjusted EBITDA, which are Non-GAAP measures, to improve comparability of results between periods.   


Three Months Ended

December 31,


2020


2019


Net earnings

$

17.7

$

22.4

Income tax provision

7.5

7.2

Interest expense, net

17.4

14.7

Depreciation and amortization

22.2

22.5


EBITDA

$

64.8

$

66.8

Restructuring and related costs

4.4

8.0

Acquisition and integration costs

3.0

6.2

Gain on sale of Infant and Pet Care business

(5.2)

Feminine and Infant Care evaluation costs

0.3


Adjusted EBITDA

$

72.2

$

76.1

Note 5 – Outlook

The following tables provide reconciliations of Adjusted EPS and Adjusted EBITDA, Non-GAAP measures, included within the Company’s outlook for projected fiscal 2021 results:


Adjusted EPS Outlook

Fiscal 2021 GAAP EPS

$2.18 – $2.38

Restructuring and related costs

approx.

0.52

Acquisition and integration costs

approx.

0.06

Income taxes(1)

approx.

(0.14)

Fiscal 2021 Adjusted EPS Outlook (Non-GAAP)

$2.62 – $2.82

(1)    Income tax effect of the adjustments to Fiscal 2021 GAAP EPS noted above.


Adjusted EBITDA Outlook

Fiscal 2021 GAAP Net Income

approx.

$120 – $135

Income tax provision

approx.

35

Interest expense, net

approx.

70

Depreciation and amortization

approx.

90

EBITDA

approx.

$315 – $330

Restructuring and related costs

approx.

27

Acquisition and integration costs

approx.

3

Fiscal 2021 Adjusted EBITDA

approx.

$345 – $360

 

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SOURCE Edgewell Personal Care Company