Exhibit 99.1
OCTOBER 20, 2009 | | Media Contact: | | Anthony Farina |
WILMINGTON, Del. | | | | 302-773-4418 |
| | | | anthony.r.farina@usa.dupont.com |
| | | | |
| | Investor Contact: | | 302-774-4994 |
DuPont Delivers Strong Results in Third Quarter
Company Reports $.45 Earnings Per Share
Highlights:
· DuPont’s third quarter 2009 earnings were $.45 per share, compared to third quarter 2008 earnings of $.40 per share which included a $.16 per share hurricane-related significant item charge (see Schedule B.)
· Total company sales for third quarter 2009 were $6.0 billion, with sales in emerging markets rebounding from significantly lower levels in the first and second quarters. Pricing discipline contributed to segment pre-tax margins returning to prior year levels.
· Companywide fixed cost reduction and productivity actions boosted third quarter pre-tax earnings by about $300 million. This brings year-to-date program cost reductions to $900 million versus the company’s full-year goal of $1 billion.
· Raw material, energy and freight costs adjusted for currency and volume were 12 percent lower versus 2008. The company expects these costs for the full year will be about 5 to 6 percent lower than 2008.
· The company revised its full year 2009 earnings outlook to a range of $1.95 to $2.05 per share, excluding significant items. This reflects a narrowing toward the upper end of the company’s previous range of $1.70 to $2.10 per share. The full-year free cash flow outlook remains $2.5 billion.
“We delivered on our commitment to shareholders, while navigating through some very difficult business conditions,” said DuPont CEO Ellen Kullman. “We see overall sequential improvement in our industrial businesses as market conditions begin to firm. With a more streamlined organization, permanent fixed cost reductions, and increased productivity, DuPont is well-positioned to capitalize as markets improve. We will continue to leverage our market-driven science across the company to deliver products customers want around the world. We are focused on growth and our rigorous operational discipline in order to deliver continued earnings improvement.”
Net Income and Global Consolidated Sales
Net income attributable to DuPont for the third quarter 2009 was $409 million versus $367 million in the prior year. The prior year included a $146 million after-tax hurricane-related charge. Net income reflects the benefit of significantly lower costs, partly offset by lower sales volume. Third quarter 2009 consolidated net sales of $6.0 billion were 18 percent lower than prior year, reflecting 12 percent lower volume, 2 percent lower local prices, a 3 percent negative impact from currency exchange rates and a net 1 percent reduction due to portfolio changes. While year-over-year volume declines have slowed, lower sales volume continued to reflect generally weaker economic conditions than prior year. The table below shows regional sales and variances versus third quarter 2008.
| | Three Months Ended
Sept 30, 2009 | | Percentage Change Due to: | |
(dollars in billions) | | $ | | %
Change | | Local
Currency
Price | | Currency
Effect | | Volume | | Portfolio/
Other | |
U.S. | | $ | 1.9 | | (21 | ) | (4 | ) | — | | (15 | ) | (2 | ) |
EMEA* | | 1.6 | | (27 | ) | (1 | ) | (8 | ) | (18 | ) | — | |
Asia Pacific | | 1.4 | | (5 | ) | (3 | ) | — | | (2 | ) | — | |
Canada & Lat. America | | 1.1 | | (14 | ) | 1 | | (5 | ) | (9 | ) | (1 | ) |
| | | | | | | | | | | | | |
Total Consolidated Sales | | $ | 6.0 | | (18 | ) | (2 | ) | (3 | ) | (12 | ) | (1 | ) |
* Europe, Middle East & Africa
2
Earnings Per Share
The table below shows year-over-year earnings per share (EPS) variances for the third quarter. Earnings principally reflect lower variable and fixed costs, lower sales volume and the impact of the stronger dollar. Capacity utilization has significantly improved versus prior quarters this year.
EPS ANALYSIS
| | 3Q | |
| | | |
EPS - 2008 | | $ | .40 | |
Significant items (Schedule B) | | (.16 | ) |
EPS - 2008 Excluding Significant items | | $ | .56 | |
| | | |
Local prices | | (.14 | ) |
Variable costs* | | .44 | |
Volume | | (.32 | ) |
Low Capacity Utilization** | | (.03 | ) |
Fixed costs * | | .04 | |
Currency | | (.06 | ) |
Other*** | | (.02 | ) |
Tax | | (.02 | ) |
| | | |
EPS – 2009 | | $ | .45 | |
*Excluding volume & currency impact.
**Fixed manufacturing cost, normally reflected in inventory, expensed as a result of low production volumes.
***Includes net interest (.02), lower net exchange loss .03, and other income (.03).
3
Business Segment Performance
The table below shows third quarter 2009 segment sales and related variances versus prior year.
| | Three Months Ended | | Percentage Change | |
| | September 30, 2009 | | Due to: | |
SEGMENT SALES*
(Dollars in billions) | | $ | | % Change | | USD
Price | | Volume | | Portfolio
and Other | |
Agriculture & Nutrition | | $ | 1.2 | | (5 | ) | (1 | ) | (4 | ) | — | |
Coatings & Color Technologies | | 1.5 | | (16 | ) | (3 | ) | (13 | ) | — | |
Electronic & Communication Technologies | | 0.9 | | (13 | ) | (3 | ) | (10 | ) | — | |
Performance Materials | | 1.3 | | (24 | ) | (8 | ) | (14 | ) | (2 | ) |
Safety & Protection | | 1.0 | | (32 | ) | (10 | ) | (22 | ) | — | |
| | | | | | | | | | | | |
* Segment sales include transfers
Pre-tax operating income (PTOI) of $757 million compares to prior year $682 million, which includes a $227 million hurricane-related significant item charge.
PRE-TAX OPERATING INCOME (LOSS)
| | Three Months Ended
September 30 | |
| | | | | | % change | |
(Dollars in millions) | | 2009 | | 2008 | | vs. 2008 | |
| | | | | | | |
Agriculture & Nutrition | | $ | (113 | ) | $ | (21 | ) | nm | |
Coatings & Color Technologies | | 182 | | 190 | | (4 | ) |
Electronic & Communication Technologies | | 125 | | 137 | | (9 | ) |
Performance Materials | | 230 | | (91 | )* | nm | |
Safety & Protection | | 93 | | 251 | | (63 | ) |
Total Growth Platforms | | 517 | | 466 | | 11 | |
Pharmaceuticals | | 266 | | 260 | | 2 | |
Other | | (26 | ) | (44 | ) | nm | |
Total Segments | | $ | 757 | | $ | 682 | | 11 | |
*Includes a $216 million hurricane charge; see Schedule C for detail by segment
4
The following is a summary of business results for each of the company’s operating segments, comparing the third quarter 2009 with third quarter 2008, for sales and PTOI. All references to selling price changes are on a U.S. dollar basis, including the impact of currency.
Agriculture & Nutrition
· Sales of $1.2 billion were down 5 percent, reflecting unfavorable currency impact, partly offset by agriculture market share gains and strong seed pricing.
· Seasonal third quarter pre-tax loss was $113 million versus a loss of $21 million in the prior year, which included a $49 million gain on the settlement of soybean contracts. Current quarter earnings reflected continued spending for growth initiatives and higher input costs.
Coatings & Color Technologies
· Sales of $1.5 billion were down 16 percent, primarily reflecting continued weakness in motor vehicle markets.
· PTOI of $182 million was 4 percent lower, reflecting lower sales volumes and unfavorable currency, partly offset by lower variable costs, fixed cost reductions and pricing gains.
Electronic & Communication Technologies
· Sales of $919 million were down 13 percent, reflecting 10 percent lower volume and 3 percent lower selling prices. Weak demand in consumer and general industrial markets offset increased demand in photovoltaics and packaging graphics.
· PTOI of $125 million was down 9 percent, reflecting lower volumes and lower costs.
Performance Materials
· Sales of $1.3 billion were down 24 percent, reflecting weak demand in major markets in all regions, particularly in general industrial and motor vehicle markets.
· PTOI of $230 million was up versus a prior year loss of $91 million, which included hurricane-related charges of $216 million. The improvement also reflected lower cost partly offset by lower sales volume, unfavorable product mix and currency. Current quarter included $24 million of insurance recoveries related to the hurricane.
Safety & Protection
· Sales of $1.0 billion were down 32 percent, reflecting a 22 percent volume decline primarily in industrial and construction markets. Pricing decreases reflected the pass-through of lower chemicals raw material costs.
· PTOI of $93 million principally reflected lower market demand, partly offset by lower raw material costs, fixed cost reductions and pricing actions. Current quarter included a $26 million asset impairment charge.
Additional information on segment performance is available on the DuPont Investor Center website at www.dupont.com.
5
Outlook
DuPont revised its full-year 2009 earnings outlook to a range of $1.95 to $2.05 per share, excluding significant items. The full-year free cash flow target remains $2.5 billion. The outlook anticipates improving demand across key markets. The company expects lower raw material costs and currency exchange rates will be a benefit to earnings in the fourth quarter versus the prior year. Aggressive actions to reduce costs and capital expenditures will continue as the company maintains an appropriate level of investment for high-growth, high-margin businesses including seed products and photovoltaics.
Use of Non-GAAP Measures
Management believes that certain non-GAAP measurements, such as free cash flow, are meaningful to investors because they provide insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules C and D.
DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
Forward-Looking Statements: This news release contains forward-looking statements based on management’s current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company’s strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like “expects,” “anticipates,” “plans,” “intends,” “projects,” “indicates,” and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; seasonality of sales of agricultural products; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
# # #
10/20/09
6
E. I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)
SCHEDULE A
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
Net sales | | $ | 5,961 | | $ | 7,297 | | $ | 19,690 | | $ | 24,709 | |
Other income, net | | 195 | | 420 | | 824 | | 1,057 | |
| | | | | | | | | |
Total | | 6,156 | | 7,717 | | 20,514 | | 25,766 | |
| | | | | | | | | |
Cost of goods sold and other operating charges (a) | | 4,560 | | 5,916 | | 14,752 | | 18,298 | |
Selling, general and administrative expenses | | 770 | | 873 | | 2,584 | | 2,794 | |
Research and development expense | | 335 | | 360 | | 989 | | 1,050 | |
Interest expense | | 100 | | 98 | | 312 | | 272 | |
Employee separation / asset related charges, net (a) | | — | | — | | 265 | | — | |
| | | | | | | | | |
Total | | 5,765 | | 7,247 | | 18,902 | | 22,414 | |
| | | | | | | | | |
Income before income taxes | | 391 | | 470 | | 1,612 | | 3,352 | |
Provision for (benefit from) income taxes | | (23 | ) | 98 | | 288 | | 706 | |
| | | | | | | | | |
Net income | | 414 | | 372 | | 1,324 | | 2,646 | |
| | | | | | | | | |
Less: Net income attributable to noncontrolling interests | | 5 | | 5 | | 10 | | 10 | |
| | | | | | | | | |
Net income attributable to DuPont | | $ | 409 | | $ | 367 | | $ | 1,314 | | $ | 2,636 | |
| | | | | | | | | |
Basic earnings per share of common stock | | $ | 0.45 | | $ | 0.40 | | $ | 1.44 | | $ | 2.91 | |
| | | | | | | | | |
Diluted earnings per share of common stock | | $ | 0.45 | | $ | 0.40 | | $ | 1.44 | | $ | 2.89 | |
| | | | | | | | | |
Dividends per share of common stock | | $ | 0.41 | | $ | 0.41 | | $ | 1.23 | | $ | 1.23 | |
| | | | | | | | | |
Average number of shares outstanding used in earnings per share (EPS) calculation: | | | | | | | | | |
Basic | | 904,615,000 | | 903,134,000 | | 904,350,000 | | 902,131,000 | |
Diluted | | 910,291,000 | | 907,950,000 | | 907,996,000 | | 908,073,000 | |
(a) See Schedule B for detail of significant items.
7
E. I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
| | September 30,
2009 | | December 31,
2008 | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 2,249 | | $ | 3,645 | |
Marketable securities | | 906 | | 59 | |
Accounts and notes receivable, net | | 7,126 | | 5,140 | |
Inventories | | 4,392 | | 5,681 | |
Prepaid expenses | | 125 | | 143 | |
Income taxes | | 558 | | 643 | |
Total current assets | | 15,356 | | 15,311 | |
Property, plant and equipment, net of accumulated depreciation (September 30, 2009 - $17,590; December 31, 2008 - $16,800) | | 11,080 | | 11,154 | |
Goodwill | | 2,138 | | 2,135 | |
Other intangible assets | | 2,582 | | 2,710 | |
Investment in affiliates | | 991 | | 844 | |
Other assets | | 4,021 | | 4,055 | |
Total | | $ | 36,168 | | $ | 36,209 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 2,554 | | $ | 3,128 | |
Short-term borrowings and capital lease obligations | | 3,525 | | 2,012 | |
Income taxes | | 138 | | 110 | |
Other accrued liabilities | | 3,345 | | 4,460 | |
Total current liabilities | | 9,562 | | 9,710 | |
| | | | | |
Long-term borrowings and capital lease obligations | | 7,545 | | 7,638 | |
Other liabilities | | 10,830 | | 11,169 | |
Deferred income taxes | | 148 | | 140 | |
Total liabilities | | 28,085 | | 28,657 | |
| | | | | |
Commitments and contingent liabilities | | | | | |
| | | | | |
Stockholders’ equity | | | | | |
Preferred stock | | 237 | | 237 | |
Common stock, $0.30 par value; 1,800,000,000 shares authorized; issued at September 30, 2009 - 990,770,000; December 31, 2008 - 989,415,000 | | 297 | | 297 | |
Additional paid-in capital | | 8,463 | | 8,380 | |
Reinvested earnings | | 10,644 | | 10,456 | |
Accumulated other comprehensive loss | | (5,267 | ) | (5,518 | ) |
Common stock held in treasury, at cost (87,041,000 shares at September 30, 2009 and December 31, 2008) | | (6,727 | ) | (6,727 | ) |
Total DuPont stockholders’ equity | | 7,647 | | 7,125 | |
Noncontrolling interests | | 436 | | 427 | |
Total equity | | 8,083 | | 7,552 | |
Total | | $ | 36,168 | | $ | 36,209 | |
8
E. I. du Pont de Nemours and Company
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
SCHEDULE A (continued)
| | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | |
| | | | | |
Cash provided by operating activities | | $ | 923 | | $ | 494 | |
| | | | | |
Investing activities | | | | | |
Purchases of property, plant and equipment | | (990 | ) | (1,406 | ) |
Investments in affiliates | | (105 | ) | (53 | ) |
Payments for businesses (net of cash acquired) | | (12 | ) | (72 | ) |
Other investing activities - net | | (1,518 | ) | (151 | ) |
Cash used for investing activities | | (2,625 | ) | (1,682 | ) |
| | | | | |
Financing activities | | | | | |
Dividends paid to stockholders | | (1,119 | ) | (1,123 | ) |
Net increase in borrowings | | 1,408 | | 2,974 | |
Other financing activities - net | | (14 | ) | 57 | |
Cash provided by financing activities | | 275 | | 1,908 | |
| | | | | |
Effect of exchange rate changes on cash | | 31 | | (32 | ) |
| | | | | |
(Decrease) increase in cash and cash equivalents | | (1,396 | ) | 688 | |
| | | | | |
Cash and cash equivalents at beginning of period | | 3,645 | | 1,305 | |
| | | | | |
Cash and cash equivalents at end of period | | $ | 2,249 | | $ | 1,993 | |
9
E. I. du Pont de Nemours and Company
Schedules of Significant Items
(Dollars in millions, except per share amounts)
SCHEDULE B
SIGNIFICANT ITEMS
| | Pre-tax | | After-tax | | ($ Per Share) | |
| | 2009 | | 2008 | | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | | | | | |
1st Quarter - Total | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
| | | | | | | | | | | | | |
2nd Quarter | | | | | | | | | | | | | |
2009 Restructuring charge (a) | | $ | (340 | ) | $ | — | | $ | (227 | ) | $ | — | | $ | (0.25 | ) | $ | — | |
2008 Restructuring adjustment (b) | | 75 | | — | | 53 | | — | | 0.06 | | — | |
Hurricane proceeds and adjustments (c) | | 50 | | — | | 33 | | — | | 0.04 | | — | |
2nd Quarter - Total | | $ | (215 | ) | $ | — | | $ | (141 | ) | $ | — | | $ | (0.15 | ) | $ | — | |
| | | | | | | | | | | | | |
3rd Quarter | | | | | | | | | | | | | |
Hurricane charges (d) | | — | | (227 | ) | — | | (146 | ) | — | | (0.16 | ) |
| | | | | | | | | | | | | |
3rd Quarter - Total | | $ | — | | $ | (227 | ) | $ | — | | $ | (146 | ) | $ | — | | $ | (0.16 | ) |
| | | | | | | | | | | | | |
Year-to-date - Total | | $ | (215 | ) | $ | (227 | ) | $ | (141 | ) | $ | (146 | ) | $ | (0.15 | ) | $ | (0.16 | ) |
(a) | Second quarter and year-to-date 2009 included a $340 restructuring charge recorded in Employee separation / asset related charges, net related to severance and related benefit costs, asset related charges, and other non-personnel costs. Pre-tax amounts by segment were: $(70) Coatings & Color Technologies, $(73) Electronic & Communication Technologies, $(110) Performance Materials, $(86) Safety & Protection, and $(1) Other. |
(b) | Second quarter and year-to-date 2009 included a $75 reduction in estimated costs recorded in Employee separation / asset related charges, net related to the 2008 restructuring program primarily due to the achievement of work force reductions through non-severance programs and redeployments. Pre-tax amounts by segment were: $(1) Agriculture & Nutrition,$43 Coatings & Color Technologies, $1 Electronic & Communication Technologies, $28 Performance Materials, $2 Safety & Protection, and $2 Other. |
(c) | Second quarter and year-to-date 2009 included a $50 benefit in Cost of goods sold and other operating charges resulting from a reduction of $26 from lower than estimated inventory and permanent investment write-offs, and $24 in insurance recoveries relating to the damage from Hurricane Ike in 2008. Total pre-tax amount relates to the Performance Materials segment. |
(d) | Third quarter and year-to-date 2008 included a one-time pre-tax charge of $227 million for costs associated with clean up, restoration of manufacturing operations, and lost inventory resulting from hurricanes damages. Pretax hurricane charges by segment were $4 Agriculture & Nutrition, $2 Electronic & Communication Technologies, $216 Performance Materials and $5 Safety & Protection. These amounts do not include the estimated impact of hurricane-related business interruptions. |
See Schedule C for detail by segment.
10
E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
SEGMENT SALES (1) | | | | | | | | | |
Agriculture & Nutrition | | $ | 1,244 | | $ | 1,303 | | $ | 6,919 | | $ | 6,727 | |
Coatings & Color Technologies | | 1,470 | | 1,757 | | 4,009 | | 5,269 | |
Electronic & Communication Technologies | | 919 | | 1,054 | | 2,410 | | 3,154 | |
Performance Materials | | 1,303 | | 1,708 | | 3,332 | | 5,231 | |
Safety & Protection | | 1,036 | | 1,529 | | 3,067 | | 4,477 | |
Other | | 54 | | 45 | | 113 | | 129 | |
Total Segment sales | | $ | 6,026 | | $ | 7,396 | | $ | 19,850 | | $ | 24,987 | |
| | | | | | | | | |
Elimination of transfers | | (65 | ) | (99 | ) | (160 | ) | (278 | ) |
Consolidated net sales | | $ | 5,961 | | $ | 7,297 | | $ | 19,690 | | $ | 24,709 | |
(1) Sales for the reporting segments include transfers.
11
E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C (continued)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
PRETAX OPERATING INCOME/(LOSS) (PTOI) | | | | | | | | | |
Agriculture & Nutrition | | $ | (113 | ) | $ | (21 | ) | $ | 1,319 | | $ | 1,269 | |
Coatings & Color Technologies | | 182 | | 190 | | 269 | | 627 | |
Electronic & Communication Technologies | | 125 | | 137 | | 36 | | 482 | |
Performance Materials | | 230 | | (91 | ) | 89 | | 351 | |
Safety & Protection | | 93 | | 251 | | 152 | | 825 | |
Total Growth Platforms | | 517 | | 466 | | 1,865 | | 3,554 | |
| | | | | | | | | |
Pharmaceuticals | | 266 | | 260 | | 790 | | 760 | |
Other | | (26 | ) | (44 | ) | (113 | ) | (69 | ) |
Total Segment PTOI | | $ | 757 | | $ | 682 | | $ | 2,542 | | $ | 4,245 | |
| | | | | | | | | |
Net exchange gains (losses) (1) | | (128 | ) | 45 | | (202 | ) | (139 | ) |
Corporate expenses & net interest | | (238 | ) | (257 | ) | (728 | ) | (754 | ) |
Income before income taxes | | $ | 391 | | $ | 470 | | $ | 1,612 | | $ | 3,352 | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2) | | | | | | | | | |
Agriculture & Nutrition | | $ | — | | $ | (4 | ) | $ | (1 | ) | $ | (4 | ) |
Coatings & Color Technologies | | — | | — | | (27 | ) | — | |
Electronic & Communication Technologies | | — | | (2 | ) | (72 | ) | (2 | ) |
Performance Materials | | — | | (216 | ) | (32 | ) | (216 | ) |
Safety & Protection | | — | | (5 | ) | (84 | ) | (5 | ) |
Other | | — | | — | | 1 | | — | |
Total significant items by segment | | $ | — | | $ | (227 | ) | $ | (215 | ) | $ | (227 | ) |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
PTOI EXCLUDING SIGNIFICANT ITEMS | | | | | | | | | |
Agriculture & Nutrition | | $ | (113 | ) | $ | (17 | ) | $ | 1,320 | | $ | 1,273 | |
Coatings & Color Technologies | | 182 | | 190 | | 296 | | 627 | |
Electronic & Communication Technologies | | 125 | | 139 | | 108 | | 484 | |
Performance Materials | | 230 | | 125 | | 121 | | 567 | |
Safety & Protection | | 93 | | 256 | | 236 | | 830 | |
Total Growth Platforms | | 517 | | 693 | | 2,081 | | 3,781 | |
| | | | | | | | | |
Pharmaceuticals | | 266 | | 260 | | 790 | | 760 | |
Other | | (26 | ) | (44 | ) | (114 | ) | (69 | ) |
Total Segment PTOI excluding significant items | | $ | 757 | | $ | 909 | | $ | 2,757 | | $ | 4,472 | |
(1) | Gains and losses resulting from the company’s hedging program are largely offset by associated tax effects. See Schedule D for additional information. |
(2) | See Schedule B for detail of significant items. |
12
E. I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D
Summary of Earnings Comparisons
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | %
Change | | 2009 | | 2008 | | %
Change | |
| | | | | | | | | | | | | |
Segment PTOI | | $ | 757 | | $ | 682 | | 11 | % | $ | 2,542 | | $ | 4,245 | | -40 | % |
Significant items charge included in PTOI (per Schedule B) | | — | | 227 | | | | 215 | | 227 | | | |
Segment PTOI excluding significant items | | $ | 757 | | $ | 909 | | -17 | % | $ | 2,757 | | $ | 4,472 | | -38 | % |
| | | | | | | | | | | | | |
Net income attributable to DuPont | | $ | 409 | | $ | 367 | | 11 | % | $ | 1,314 | | $ | 2,636 | | -50 | % |
Significant items charge included in net income attributable to DuPont (per Schedule B) | | — | | 146 | | | | 141 | | 146 | | | |
Net income attributable to DuPont excluding significant items | | $ | 409 | | $ | 513 | | -20 | % | $ | 1,455 | | $ | 2,782 | | -48 | % |
| | | | | | | | | | | | | |
EPS | | $ | 0.45 | | $ | 0.40 | | 13 | % | $ | 1.44 | | $ | 2.89 | | -50 | % |
Significant items charge included in EPS (per Schedule B) | | — | | 0.16 | | | | 0.15 | | 0.16 | | | |
EPS excluding significant items | | $ | 0.45 | | $ | 0.56 | | -20 | % | $ | 1.59 | | $ | 3.05 | | -48 | % |
| | | | | | | | | | | | | |
Average number of diluted shares outstanding | | 910,291,000 | | 907,950,000 | | 0.3 | % | 907,996,000 | | 908,073,000 | | 0.0 | % |
Reconciliation of Earnings Per Share (EPS) Outlooks
| | Year Ended
December 31, | |
| | 2009
Outlook | | 2008
Actual | |
| | | | | |
Earnings per share - excluding significant items | | $ | 1.95 - 2.05 | | $ | 2.78 | |
Significant items included in EPS(1): | | | | | |
2009 Restructuring charge | | (0.25 | ) | — | |
2008 Restructuring credit (charge) | | 0.06 | | (0.42 | ) |
Hurricane proceeds and adjustments | | 0.04 | | (0.16 | ) |
Net charge for significant items | | (0.15 | ) | (0.58 | ) |
Reported EPS | | $ | 1.80 - 1.90 | | $ | 2.20 | |
(1) See Schedule B for detail of significant items.
Calculation of Free Cash Flow
| | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | |
Cash provided by operating activities | | $ | 923 | | $ | 494 | |
Less: Purchases of property, plant and equipment | | 990 | | 1,406 | |
Free cash flow | | $ | (67 | ) | $ | (912 | ) |
13
E. I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D (continued)
Reconciliations of EBIT / EBITDA to Consolidated Income Statements
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | |
Income before income taxes | | $ | 391 | | $ | 470 | | $ | 1,612 | | $ | 3,352 | |
Less: Net income attributable to noncontrolling interests | | 5 | | 5 | | 10 | | 10 | |
Add: Interest expense | | 100 | | 98 | | 312 | | 272 | |
Adjusted EBIT | | 486 | | 563 | | 1,914 | | 3,614 | |
Add: Depreciation and amortization | | 369 | | 346 | | 1,157 | | 1,096 | |
Adjusted EBITDA | | $ | 855 | | $ | 909 | | $ | 3,071 | | $ | 4,710 | |
Reconciliations of Fixed Costs as a Percent of Sales
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | |
Total charges and expenses - consolidated income statements | | $ | 5,765 | | $ | 7,247 | | $ | 18,902 | | $ | 22,414 | |
Remove: | | | | | | | | | |
Interest expense | | (100 | ) | (98 | ) | (312 | ) | (272 | ) |
Variable costs (1) | | (2,758 | ) | (3,809 | ) | (9,528 | ) | (12,491 | ) |
Significant items - charge (2) | | — | | (227 | ) | (215 | ) | (227 | ) |
Fixed costs | | $ | 2,907 | | $ | 3,113 | | $ | 8,847 | | $ | 9,424 | |
| | | | | | | | | |
Consolidated net sales | | $ | 5,961 | | $ | 7,297 | | $ | 19,690 | | $ | 24,709 | |
| | | | | | | | | |
Fixed costs as a percent of consolidated net sales | | 48.8 | % | 42.7 | % | 44.9 | % | 38.1 | % |
(1) Includes variable manufacturing costs, freight, commissions and other selling expenses which vary with the volume of sales.
(2) See Schedule B for detail of significant items.
14
E. I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D (continued)
Exchange Gains/Losses
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pretax exchange gains and losses are recorded in Other income, net on the Consolidated Income Statements and are largely offset by the associated tax impact.
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
Subsidiary/Affiliate Monetary Position Gain/(Loss) | | | | | | | | | |
Pretax exchange gains (losses) (includes equity affiliates) | | $ | 190 | | $ | (318 | ) | $ | 288 | | $ | (110 | ) |
Local tax benefits (expenses) | | 7 | | 40 | | (51 | ) | 37 | |
Net after-tax impact from subsidiary exchange gains (losses) | | $ | 197 | | $ | (278 | ) | $ | 237 | | $ | (73 | ) |
| | | | | | | | | |
Hedging Program Gain/(Loss) | | | | | | | | | |
Pretax exchange gains (losses) | | $ | (318 | ) | $ | 363 | | $ | (490 | ) | $ | (29 | ) |
Tax benefits (expenses) | | 110 | | (125 | ) | 168 | | 11 | |
Net after-tax impact from hedging program exchange gains (losses) | | $ | (208 | ) | $ | 238 | | $ | (322 | ) | $ | (18 | ) |
| | | | | | | | | |
Total Exchange Gain/(Loss) | | | | | | | | | |
Pretax exchange gains (losses) | | $ | (128 | ) | $ | 45 | | $ | (202 | ) | $ | (139 | ) |
Tax benefits (expenses) | | 117 | | (85 | ) | 117 | | 48 | |
Net after-tax exchange gains (losses) | | $ | (11 | ) | $ | (40 | ) | $ | (85 | ) | $ | (91 | ) |
As shown above, the “Total Exchange Gain/(Loss)” is the sum of the “Subsidiary/Affiliate Monetary Position Gain/(Loss)” and the “Hedging Program Gain/(Loss).”
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains/losses, as defined above, and significant items.
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2009 | | 2008 | | 2009 | | 2008 | |
| | | | | | | | | |
Income before income taxes | | $ | 391 | | $ | 470 | | $ | 1,612 | | $ | 3,352 | |
Add: Significant items | | — | | 227 | | 215 | | 227 | |
Less: Net exchange gains (losses) | | (128 | ) | 45 | | (202 | ) | (139 | ) |
Income before income taxes, significant items and exchange gains/losses | | $ | 519 | | $ | 652 | | $ | 2,029 | | $ | 3,718 | |
| | | | | | | | | |
Provision for (benefit from) income taxes | | $ | (23 | ) | $ | 98 | | $ | 288 | | $ | 706 | |
Add: Tax benefit on significant items | | — | | 81 | | 74 | | 81 | |
Tax benefits (expenses) on exchange gains/losses | | 117 | | (85 | ) | 117 | | 48 | |
Provision for income taxes, excluding taxes on significant items and exchange gains/losses | | $ | 94 | | $ | 94 | | $ | 479 | | $ | 835 | |
| | | | | | | | | |
Effective income tax rate | | (5.9 | )% | 20.9 | % | 17.9 | % | 21.1 | % |
Significant items effect | | — | | 4.8 | % | 1.9 | % | 0.9 | % |
Tax rate before significant items | | (5.9 | )% | 25.7 | % | 19.8 | % | 22.0 | % |
Exchange gains (losses) effect | | 24.0 | % | (11.3 | )% | 3.8 | % | 0.5 | % |
Base income tax rate | | 18.1 | % | 14.4 | % | 23.6 | % | 22.5 | % |
15
