Exhibit 99.1
JANUARY 26, 2010 | Media Contact: | Anthony Farina |
WILMINGTON, Del. |
| 302-773-4418 |
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| anthony.r.farina@usa.dupont.com |
|
|
|
| Investor Contact: | 302-774-4994 |
DuPont Reports Fourth Quarter 2009 EPS of $.48; Increases 2010 Guidance
Results Reflect Improving Volumes in all Regions
Highlights:
· DuPont’s fourth-quarter 2009 earnings were $.48 per share, compared to a fourth-quarter 2008 loss of $.70 per share. Excluding significant items, fourth-quarter 2009 earnings were $.44 per share versus a $.28 per share loss in the prior year (see Schedule B.)
· Sales of $6.4 billion were up 10 percent versus prior year, led by sales growth greater than 20 percent for titanium dioxide, electronic materials, performance polymers and seed products.
· Volume grew 10 percent, with increases in all regions. Asia Pacific sales exceeded pre-recession levels with volume up 34 percent versus prior year, reflecting very strong demand in China, Japan, Korea and India.
· Raw material, energy and freight costs for the fourth-quarter were about 20 percent lower after adjusting for currency and volume.
· The company exceeded its full-year goal to deliver $1 billion of fixed cost reductions and productivity actions.
· Full-year 2009 earnings were $1.92 per share versus $2.20 in 2008. Excluding significant items, 2009 earnings were $2.03 per share versus $2.78 in the prior year.
· Full-year free cash flow of $3.4 billion achieved the company’s goal, reflecting capital productivity and favorable currency impact.
· DuPont increased its full-year 2010 earnings guidance to a range of $2.15 to $2.45 per share. The previous guidance was $2.10 to $2.40 per share.
“Across the organization, DuPont delivered on its commitments in 2009,” said DuPont Chair and CEO Ellen Kullman. “We intend to emerge stronger in 2010 by building on the work we accomplished last year, with a focus on sales growth through market-driven innovation and operating leverage. We remain committed to compound annual growth targets of 10 percent for top-line and 20 percent for earnings through 2012.”
Global Consolidated Sales and Net Income
Fourth-quarter 2009 consolidated net sales of $6.4 billion were 10 percent higher than prior year, reflecting 10 percent higher volume, 3 percent lower local prices, a 4 percent positive impact from currency exchange rates and a 1 percent reduction from portfolio changes. The table below shows regional sales and variances versus fourth-quarter 2008.
(dollars in billions) |
| $ |
| % |
| Local |
| Currency |
| Volume |
| Portfolio/ |
| |
U.S. |
| $ | 1.9 |
| (2 | ) | (5 | ) | — |
| 4 |
| (1 | ) |
EMEA* |
| 1.8 |
| 6 |
| (1 | ) | 6 |
| 1 |
| — |
| |
Asia Pacific |
| 1.6 |
| 36 |
| (3 | ) | 5 |
| 34 |
| — |
| |
Canada & Lat. America |
| 1.1 |
| 12 |
| (5 | ) | 8 |
| 9 |
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Consolidated Sales |
| $ | 6.4 |
| 10 |
| (3 | ) | 4 |
| 10 |
| (1 | ) |
* Europe, Middle East & Africa
Net income attributable to DuPont for the fourth-quarter 2009 was $441 million versus a $629 million loss in the prior year. Net income excluding significant items was $402 million versus a $249 million loss in the prior year. The improvement reflects significantly higher sales volume, lower variable cost and currency benefit.
Earnings Per Share
The table below shows year-over-year earnings per share (EPS) variances for the fourth-quarter.
EPS ANALYSIS
|
| 4Q |
| |
|
|
|
| |
EPS - 2008 |
| $ | (.70 | ) |
|
|
|
| |
Less: Significant items (Schedule B) |
| (.42 | ) | |
EPS - 2008 Excluding significant items |
| $ | (.28 | ) |
|
|
|
| |
Local prices |
| (.15 | ) | |
Variable costs* |
| .51 |
| |
Volume |
| .30 |
| |
Fixed costs * |
| (.08 | ) | |
Currency |
| .04 |
| |
Tax |
| — |
| |
Exchange Gain/Loss |
| .06 |
| |
Other** |
| .04 |
| |
|
|
|
| |
EPS – 2009 Excluding significant items |
| $ | .44 |
|
Significant Items (see Schedule B) |
| .04 |
| |
|
|
|
| |
EPS - 2009 |
| $ | .48 |
|
*Excluding volume and currency impacts.
**Primarily higher equity affiliate income partly offset by a $.05 charge in Pharmaceuticals relating to the timing of rebates and other sales deductions.
Business Segment Performance
The table below shows fourth-quarter 2009 segment sales and related variances versus prior year.
|
| Three Months Ended |
| Percentage Change |
| |||||||
|
| December 31, 2009 |
| Due to: |
| |||||||
SEGMENT SALES* |
| $ |
| % Change |
| USD |
| Volume |
| Portfolio |
| |
Agriculture & Nutrition |
| $ | 1.4 |
| 12 |
| 3 |
| 9 |
| — |
|
Electronics & Communications |
| 0.6 |
| 22 |
| 9 |
| 13 |
| — |
| |
Performance Chemicals |
| 1.3 |
| 9 |
| (8 | ) | 17 |
| — |
| |
Performance Coatings |
| 1.0 |
| 8 |
| 10 |
| (2 | ) | — |
| |
Performance Materials |
| 1.4 |
| 20 |
| (3 | ) | 24 |
| (1 | ) | |
Safety & Protection |
| 0.8 |
| (9 | ) | — |
| (9 | ) | — |
| |
* Segment sales include transfers
Reported pre-tax operating income (PTOI) for fourth-quarter 2009 was $798 million compared to a fourth-quarter 2008 pre-tax operating loss of $595 million. Segment PTOI (loss) excluding significant items is shown below.
PRE-TAX OPERATING INCOME (LOSS) EXCLUDING SIGNIFICANT ITEMS*
|
| Three Months Ended |
| |||||||
|
|
|
|
|
| $ change |
| |||
(Dollars in millions) |
| 2009 |
| 2008 |
| vs. 2008 |
| |||
|
|
|
|
|
|
|
| |||
Agriculture & Nutrition |
| $ | (97 | ) | $ | (164 | ) | $ | 67 |
|
Electronics & Communications |
| 61 |
| 29 |
| 32 |
| |||
Performance Chemicals |
| 208 |
| 14 |
| 194 |
| |||
Performance Coatings |
| 70 |
| (81 | ) | 151 |
| |||
Performance Materials |
| 174 |
| (129 | ) | 303 |
| |||
Safety & Protection |
| 135 |
| 87 |
| 48 |
| |||
Pharmaceuticals |
| 247 | ** | 265 |
| (18 | ) | |||
Other |
| (55 | ) | (81 | ) | 26 |
| |||
|
|
|
|
|
|
|
| |||
Total Segments |
| $ | 743 |
| $ | (60 | ) | $ | 803 |
|
* See Schedules B and C for a listing of significant items and their impact by segment.
** Includes a $63 million charge in other income relating to the timing of rebates and other sales deductions.
The following is a summary of business results for each of the company’s reportable segments, comparing the fourth-quarter 2009 with fourth-quarter 2008, for sales and PTOI, excluding significant items. All references to selling price changes are on a U.S. dollar basis, including the impact of currency.
Agriculture & Nutrition
Segment sales of $1.4 billion were up $143 million or 12 percent. Volume increased 9 percent, with increases in all regions. Selling prices were up 3 percent. Segment volumes reflect 25 percent higher seed volume, with a strong start to the North America and European seasons, and successful summer plantings in Argentina, Brazil, and South Africa. Seed sales were $465 million. Crop protection product volumes increased 5 percent, reflecting increased insecticide demand in Latin America. Food and nutrition products sales were up slightly, reflecting increased sales in North America. Segment PTOI seasonal loss of $97 million, improved $67 million, principally due to higher seed volumes.
Electronics & Communications
Segment sales of $582 million were up 22 percent versus fourth-quarter 2008 and 2 percent above pre-recession fourth-quarter 2007. Sales reflect 13 percent higher volumes and 9 percent higher prices (includes metals pass-through pricing) versus fourth-quarter 2008. Seasonal demand, growth in photovoltaics and a small amount of inventory rebuilding throughout the industry contributed to a strong quarter. PTOI of $61 million was up $32 million primarily due to significantly improved volume and mix.
Performance Chemicals
Segment sales of $1.3 billion increased $113 million, or 9 percent. The sales increase was led by 17 percent higher volumes, partly offset by lower prices. Volume increases primarily driven by recovery in the titanium dioxide market in all regions. Pricing decreases mostly reflected the pass-through of lower chemicals raw material costs. PTOI was $208 million, an improvement of $194 million. The increase primarily reflected lower raw material costs and higher volume.
Performance Coatings
Segment sales of $975 million increased $70 million, or 8 percent, principally reflecting higher selling prices. Volumes were 2 percent lower, reflecting continued industrial market weakness in developed regions, partly offset by higher demand in automotive OEM markets. PTOI was $70 million, up $151 million, reflecting lower raw material costs and aggressive fixed cost reductions.
Performance Materials
Segment sales of $1.4 billion increased $242 million, or 20 percent, principally reflecting 24 percent higher volumes led by improvement in automotive, industrial, consumer and electrical markets, with strong volume recovery in all regions, particularly Asia Pacific. Segment PTOI for the quarter was $174 million, an improvement of $303 million, reflecting strong volume and variable margin expansion as lower selling prices were more than offset by the benefits of sharply lower raw material costs.
Safety & Protection
Segment sales of $759 million decreased $75 million, or 9 percent, essentially all volume driven. Sales into automotive and consumer markets rebounded, while industrial and law enforcement markets continued to lag. PTOI was $135 million, an improvement of $48 million. The increase primarily reflected lower raw material costs and fixed cost reductions, partly offset by lower volume.
Additional segment information is available on the DuPont Investor Center website at www.dupont.com.
Outlook
DuPont remains committed to its 20 percent compound annual earnings growth goal for the 2009-2012 time period and 2010 free cash flow target of greater than $1.5 billion as announced November 2009. DuPont today increased its full-year 2010 earnings guidance to a range of $2.15 to $2.45 per share versus the previous guidance of $2.10 to $2.40 per share. Due to strong pension fund performance, the company now expects pension expense to be about $.10 per share lower than originally anticipated. In addition, the company is estimating a first-quarter $.05 per share exchange loss resulting from devaluation of the Venezuelan currency.
“In 2010, we will continue the momentum generated from last year’s aggressive cost-cutting and cash-generating actions,” Kullman said. “We remain confident in our performance outlook for 2010, based on improving economic conditions coupled with well-positioned and streamlined businesses. Each one of our business units has clear targets, our leaders understand their accountability and our teams are poised to deliver in 2010.”
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.
# # #
E. I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)
SCHEDULE A
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Net sales |
| $ | 6,419 |
| $ | 5,820 |
| $ | 26,109 |
| $ | 30,529 |
|
Other income, net |
| 395 |
| 250 |
| 1,219 |
| 1,307 |
| ||||
Total |
| 6,814 |
| 6,070 |
| 27,328 |
| 31,836 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cost of goods sold and other operating charges (a) |
| 4,956 |
| 5,250 |
| 19,708 |
| 23,548 |
| ||||
Selling, general and administrative expenses |
| 856 |
| 799 |
| 3,440 |
| 3,593 |
| ||||
Research and development expense |
| 389 |
| 343 |
| 1,378 |
| 1,393 |
| ||||
Interest expense |
| 96 |
| 104 |
| 408 |
| 376 |
| ||||
Employee separation / asset related charges, net (a) |
| (55 | ) | 535 |
| 210 |
| 535 |
| ||||
Total |
| 6,242 |
| 7,031 |
| 25,144 |
| 29,445 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) before income taxes |
| 572 |
| (961 | ) | 2,184 |
| 2,391 |
| ||||
Provision for (benefit from) income taxes |
| 127 |
| (325 | ) | 415 |
| 381 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
| 445 |
| (636 | ) | 1,769 |
| 2,010 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Less: Net income (loss) attributable to noncontrolling interests |
| 4 |
| (7 | ) | 14 |
| 3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) attributable to DuPont |
| $ | 441 |
| $ | (629 | ) | $ | 1,755 |
| $ | 2,007 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings (loss) per share of common stock |
| $ | 0.48 |
| $ | (0.70 | ) | $ | 1.93 |
| $ | 2.21 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings (loss) per share of common stock |
| $ | 0.48 |
| $ | (0.70 | ) | $ | 1.92 |
| $ | 2.20 |
|
|
|
|
|
|
|
|
|
|
| ||||
Dividends per share of common stock |
| $ | 0.41 |
| $ | 0.41 |
| $ | 1.64 |
| $ | 1.64 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average number of shares outstanding used in earnings per share (EPS) calculation: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 904,526,000 |
| 903,265,000 |
| 904,395,000 |
| 902,415,000 |
| ||||
Diluted |
| 910,854,000 |
| 903,265,000 |
| 908,712,000 |
| 907,371,000 |
|
(a) See Schedule B for detail of significant items.
E. I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
|
| December 31, |
| December 31, |
| ||
Assets |
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 4,021 |
| $ | 3,645 |
|
Marketable securities |
| 2,116 |
| 59 |
| ||
Accounts and notes receivable, net |
| 5,030 |
| 5,140 |
| ||
Inventories |
| 5,380 |
| 5,681 |
| ||
Prepaid expenses |
| 129 |
| 143 |
| ||
Income taxes |
| 612 |
| 643 |
| ||
Total current assets |
| 17,288 |
| 15,311 |
| ||
Property, plant and equipment, net of accumulated depreciation |
| 11,094 |
| 11,154 |
| ||
Goodwill |
| 2,137 |
| 2,135 |
| ||
Other intangible assets |
| 2,552 |
| 2,710 |
| ||
Investment in affiliates |
| 1,014 |
| 844 |
| ||
Other assets |
| 4,100 |
| 4,055 |
| ||
Total |
| $ | 38,185 |
| $ | 36,209 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Accounts payable |
| $ | 3,542 |
| $ | 3,128 |
|
Short-term borrowings and capital lease obligations |
| 1,506 |
| 2,012 |
| ||
Income taxes |
| 154 |
| 110 |
| ||
Other accrued liabilities |
| 4,188 |
| 4,460 |
| ||
Total current liabilities |
| 9,390 |
| 9,710 |
| ||
Long-term borrowings and capital lease obligations |
| 9,528 |
| 7,638 |
| ||
Other liabilities |
| 11,490 |
| 11,169 |
| ||
Deferred income taxes |
| 126 |
| 140 |
| ||
Total liabilities |
| 30,534 |
| 28,657 |
| ||
|
|
|
|
|
| ||
Commitments and contingent liabilities |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders’ equity |
|
|
|
|
| ||
Preferred stock |
| 237 |
| 237 |
| ||
Common stock, $0.30 par value; 1,800,000,000 shares authorized; |
| 297 |
| 297 |
| ||
Additional paid-in capital |
| 8,469 |
| 8,380 |
| ||
Reinvested earnings |
| 10,710 |
| 10,456 |
| ||
Accumulated other comprehensive loss |
| (5,771 | ) | (5,518 | ) | ||
Common stock held in treasury, at cost (87,041,000 shares at December 31, 2009 and 2008) |
| (6,727 | ) | (6,727 | ) | ||
Total DuPont stockholders’ equity |
| 7,215 |
| 7,125 |
| ||
Noncontrolling interests |
| 436 |
| 427 |
| ||
Total equity |
| 7,651 |
| 7,552 |
| ||
Total |
| $ | 38,185 |
| $ | 36,209 |
|
E. I. du Pont de Nemours and Company
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
SCHEDULE A (continued)
|
| Year Ended |
| ||||
|
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Cash provided by operating activities |
| $ | 4,741 |
| $ | 3,129 |
|
|
|
|
|
|
| ||
Investing activities |
|
|
|
|
| ||
Purchases of property, plant and equipment |
| (1,308 | ) | (1,978 | ) | ||
Investments in affiliates |
| (124 | ) | (55 | ) | ||
Payments for businesses (net of cash acquired) |
| (13 | ) | (144 | ) | ||
Net decrease (increase) in short-term financial instruments |
| (2,016 | ) | 40 |
| ||
Other investing activities - net |
| (837 | ) | 527 |
| ||
Cash used for investing activities |
| (4,298 | ) | (1,610 | ) | ||
|
|
|
|
|
| ||
Financing activities |
|
|
|
|
| ||
Dividends paid to stockholders |
| (1,492 | ) | (1,496 | ) | ||
Net (decrease) increase in borrowings |
| 1,391 |
| 2,089 |
| ||
Other financing activities - net |
| 4 |
| 285 |
| ||
Cash (used for) provided by financing activities |
| (97 | ) | 878 |
| ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash |
| 30 |
| (57 | ) | ||
|
|
|
|
|
| ||
Increase in cash and cash equivalents |
| 376 |
| 2,340 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
| 3,645 |
| 1,305 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
| $ | 4,021 |
| $ | 3,645 |
|
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 | ) | $ | — |
|
|
|
|
|
|
|
|
|
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|
|
|
| ||||||
3rd Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hurricane charges (d) |
| $ | — |
| $ | (227 | ) | $ | — |
| $ | (146 | ) | $ | — |
| $ | (0.16 | ) |
3rd Quarter - Total |
| $ | — |
| $ | (227 | ) | $ | — |
| $ | (146 | ) | $ | — |
| $ | (0.16 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
4th Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
2008 and 2009 Restructuring adjustments (b) |
| $ | 55 |
| $ | — |
| $ | 39 |
| $ | — |
| $ | 0.04 |
| $ | — |
|
2008 Restructuring charges (e) |
| — |
| (535 | ) | — |
| (380 | ) | — |
| (0.42 | ) | ||||||
4th Quarter - Total |
| $ | 55 |
| $ | (535 | ) | $ | 39 |
| $ | (380 | ) | $ | 0.04 |
| $ | (0.42 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Full Year - Total |
| $ | (160 | ) | $ | (762 | ) | $ | (102 | ) | $ | (526 | ) | $ | (0.11 | ) | $ | (0.58 | ) |
(a) | Second quarter and full year 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: Electronics & Communications - $(43); Performance Chemicals - $(66); Performance Coatings - $(65); Performance Materials - $(110); Safety & Protection - $(55); and Other - $(1). |
(b) | Second quarter and fourth quarter 2009 included a net reduction of $75 and $55, respectively for estimated costs recorded in Employee separation / asset related charges, net related to the 2008 and 2009 restructuring programs primarily due to the achievement of work force reductions through non-severance programs. Total full year pre-tax amounts by segment were: Agriculture & Nutrition - $1; Electronics and Communications - $6; Performance Chemicals - $12; Performance Coatings - $50; Performance Materials - $52; Safety & Protection - $10; and Other - $(1). |
(c) | Second quarter and full year 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 full year 2008 included a pre-tax charge of $(227) for costs associated with clean up, restoration of manufacturing operations, and lost inventory resulting from hurricanes damages. Pre-tax hurricane charges by segment were: Agriculture & Nutrition - $(4); Performance Chemicals - $(6); Performance Materials - $(216); and Safety & Protection - $(1). |
(e) | Fourth quarter and full year 2008 includes a $(535) restructuring charge in Employee separation / asset related charges, net comprised of severance and related benefit costs, asset write-offs, impairment charges, and other non-personnel costs. Pre-tax amounts by segment were: Agriculture & Nutrition - $(18); Electronics & Communications - $(37); Performance Chemicals - $(50); Performance Coatings - $(209); Performance Materials - $(94); Safety & Protection — $(96); and Other - $(31). |
See Schedule C for detail by segment.
E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C
|
| Three Months Ended |
| Year Ended |
| ||||||||
SEGMENT SALES (1) |
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Agriculture & Nutrition |
| $ | 1,368 |
| $ | 1,225 |
| $ | 8,287 |
| $ | 7,952 |
|
Electronics & Communications |
| 582 |
| 477 |
| 1,918 |
| 2,194 |
| ||||
Performance Chemicals |
| 1,320 |
| 1,207 |
| 4,964 |
| 6,035 |
| ||||
Performance Coatings |
| 975 |
| 905 |
| 3,429 |
| 4,361 |
| ||||
Performance Materials |
| 1,436 |
| 1,194 |
| 4,768 |
| 6,425 |
| ||||
Safety & Protection |
| 759 |
| 834 |
| 2,811 |
| 3,733 |
| ||||
Other |
| 45 |
| 31 |
| 158 |
| 160 |
| ||||
Total Segment sales |
| $ | 6,485 |
| $ | 5,873 |
| $ | 26,335 |
| $ | 30,860 |
|
|
|
|
|
|
|
|
|
|
| ||||
Elimination of transfers |
| (66 | ) | (53 | ) | (226 | ) | (331 | ) | ||||
Consolidated net sales |
| $ | 6,419 |
| $ | 5,820 |
| $ | 26,109 |
| $ | 30,529 |
|
(1) Sales for the reporting segments include transfers.
E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C (continued)
|
| Three Months Ended |
| Year Ended |
| ||||||||
PRE-TAX OPERATING INCOME/(LOSS) (PTOI) |
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Agriculture & Nutrition |
| $ | (95 | ) | $ | (182 | ) | $ | 1,224 |
| $ | 1,087 |
|
Electronics & Communications |
| 67 |
| (8 | ) | 87 |
| 251 |
| ||||
Performance Chemicals |
| 217 |
| (36 | ) | 547 |
| 687 |
| ||||
Performance Coatings |
| 78 |
| (290 | ) | 69 |
| (8 | ) | ||||
Performance Materials |
| 198 |
| (223 | ) | 287 |
| 128 |
| ||||
Safety & Protection |
| 144 |
| (9 | ) | 260 |
| 661 |
| ||||
Pharmaceuticals |
| 247 |
| 265 |
| 1,037 |
| 1,025 |
| ||||
Other |
| (58 | ) | (112 | ) | (171 | ) | (181 | ) | ||||
Total Segment PTOI |
| $ | 798 |
| $ | (595 | ) | $ | 3,340 |
| $ | 3,650 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net exchange gains (losses) (1) |
| (3 | ) | (116 | ) | (205 | ) | (255 | ) | ||||
Corporate expenses & net interest |
| (223 | ) | (250 | ) | (951 | ) | (1,004 | ) | ||||
Income (loss) before income taxes |
| $ | 572 |
| $ | (961 | ) | $ | 2,184 |
| $ | 2,391 |
|
|
| Three Months Ended |
| Year Ended |
| ||||||||
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2) |
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Agriculture & Nutrition |
| $ | 2 |
| $ | (18 | ) | $ | 1 |
| $ | (22 | ) |
Electronics & Communications |
| 6 |
| (37 | ) | (37 | ) | (37 | ) | ||||
Performance Chemicals |
| 9 |
| (50 | ) | (54 | ) | (56 | ) | ||||
Performance Coatings |
| 8 |
| (209 | ) | (15 | ) | (209 | ) | ||||
Performance Materials |
| 24 |
| (94 | ) | (8 | ) | (310 | ) | ||||
Safety & Protection |
| 9 |
| (96 | ) | (45 | ) | (97 | ) | ||||
Pharmaceuticals |
| — |
| — |
| — |
| — |
| ||||
Other |
| (3 | ) | (31 | ) | (2 | ) | (31 | ) | ||||
Total significant items by segment |
| $ | 55 |
| $ | (535 | ) | $ | (160 | ) | $ | (762 | ) |
|
| Three Months Ended |
| Year Ended |
| ||||||||
PTOI EXCLUDING SIGNIFICANT ITEMS |
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Agriculture & Nutrition |
| $ | (97 | ) | $ | (164 | ) | $ | 1,223 |
| $ | 1,109 |
|
Electronics & Communications |
| 61 |
| 29 |
| 124 |
| 288 |
| ||||
Performance Chemicals |
| 208 |
| 14 |
| 601 |
| 743 |
| ||||
Performance Coatings |
| 70 |
| (81 | ) | 84 |
| 201 |
| ||||
Performance Materials |
| 174 |
| (129 | ) | 295 |
| 438 |
| ||||
Safety & Protection |
| 135 |
| 87 |
| 305 |
| 758 |
| ||||
Pharmaceuticals |
| 247 |
| 265 |
| 1,037 |
| 1,025 |
| ||||
Other |
| (55 | ) | (81 | ) | (169 | ) | (150 | ) | ||||
Total Segment PTOI excluding significant items |
| $ | 743 |
| $ | (60 | ) | $ | 3,500 |
| $ | 4,412 |
|
(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.
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 |
| Year Ended |
| ||||||||||||
|
| 2009 |
| 2008 |
| % |
| 2009 |
| 2008 |
| % |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Segment PTOI |
| $ | 798 |
| $ | (595 | ) | n/m |
| $ | 3,340 |
| $ | 3,650 |
| -8 | % |
Significant items charge (benefit) included in PTOI (per Schedule B) |
| (55 | ) | 535 |
|
|
| 160 |
| 762 |
|
|
| ||||
Segment PTOI excluding significant items |
| $ | 743 |
| $ | (60 | ) | n/m |
| $ | 3,500 |
| $ | 4,412 |
| -21 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) attributable to DuPont |
| $ | 441 |
| $ | (629 | ) | n/m |
| $ | 1,755 |
| $ | 2,007 |
| -13 | % |
Significant items charge (benefit) included in net income (loss) attributable to DuPont (per Schedule B) |
| (39 | ) | 380 |
|
|
| 102 |
| 526 |
|
|
| ||||
Net income (loss) attributable to DuPont excluding significant items |
| $ | 402 |
| $ | (249 | ) | n/m |
| $ | 1,857 |
| $ | 2,533 |
| -27 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
EPS |
| $ | 0.48 |
| $ | (0.70 | ) | n/m |
| $ | 1.92 |
| $ | 2.20 |
| -13 | % |
Significant items charge (benefit) included in EPS (per Schedule B) |
| (0.04 | ) | 0.42 |
|
|
| 0.11 |
| 0.58 |
|
|
| ||||
EPS excluding significant items |
| $ | 0.44 |
| $ | (0.28 | ) | n/m |
| $ | 2.03 |
| $ | 2.78 |
| -27 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average number of diluted shares outstanding |
| 910,854,000 |
| 903,265,000 |
| 0.8 | % | 908,712,000 |
| 907,371,000 |
| 0.1 | % |
Reconciliation of Earnings Per Share (EPS)
|
| Year Ended |
|
|
|
|
|
|
|
|
| ||||
|
| December 31, |
|
|
|
|
|
|
|
|
| ||||
|
| 2009 |
| 2008 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Earnings per share - excluding significant items |
| $ | 2.03 |
| $ | 2.78 |
|
|
|
|
|
|
|
|
|
Significant items included in EPS(1): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2009 Restructuring charge |
| (0.25 | ) | — |
|
|
|
|
|
|
|
|
| ||
2009 Restructuring credit |
| 0.02 |
| — |
|
|
|
|
|
|
|
|
| ||
2008 Restructuring credit (charge) |
| 0.08 |
| (0.42 | ) |
|
|
|
|
|
|
|
| ||
Hurricane proceeds and adjustments |
| 0.04 |
| — |
|
|
|
|
|
|
|
|
| ||
Hurricane charge |
| — |
| (0.16 | ) |
|
|
|
|
|
|
|
| ||
Net charge for significant items |
| (0.11 | ) | (0.58 | ) |
|
|
|
|
|
|
|
| ||
Reported EPS |
| $ | 1.92 |
| $ | 2.20 |
|
|
|
|
|
|
|
|
|
(1) See Schedule B for detail of significant items.
Calculation of Free Cash Flow
|
| Year Ended |
|
|
|
|
|
|
|
|
| ||||
|
| December 31, |
|
|
|
|
|
|
|
|
| ||||
|
| 2009 |
| 2008 |
|
|
|
|
|
|
|
|
| ||
Cash provided by operating activities |
| $ | 4,741 |
| $ | 3,129 |
|
|
|
|
|
|
|
|
|
Less: Purchases of property, plant and equipment |
| 1,308 |
| 1,978 |
|
|
|
|
|
|
|
|
| ||
Free cash flow |
| $ | 3,433 |
| $ | 1,151 |
|
|
|
|
|
|
|
|
|
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 Adjusted EBIT / EBITDA to Consolidated Income Statements
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) before income taxes |
| $ | 572 |
| $ | (961 | ) | $ | 2,184 |
| $ | 2,391 |
|
Less: Net income (loss) attributable to noncontrolling interests |
| 4 |
| (7 | ) | 14 |
| 3 |
| ||||
Add: Interest expense |
| 96 |
| 104 |
| 408 |
| 376 |
| ||||
Adjusted EBIT |
| 664 |
| (850 | ) | 2,578 |
| 2,764 |
| ||||
Add: Depreciation and amortization |
| 346 |
| 348 |
| 1,503 |
| 1,444 |
| ||||
Adjusted EBITDA |
| $ | 1,010 |
| $ | (502 | ) | $ | 4,081 |
| $ | 4,208 |
|
Reconciliations of Fixed Costs as a Percent of Sales
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total charges and expenses - consolidated income statements |
| $ | 6,242 |
| $ | 7,031 |
| $ | 25,144 |
| $ | 29,445 |
|
Remove: |
|
|
|
|
|
|
|
|
| ||||
Interest expense |
| (96 | ) | (104 | ) | (408 | ) | (376 | ) | ||||
Variable costs (1) |
| (2,979 | ) | (3,245 | ) | (12,507 | ) | (15,736 | ) | ||||
Significant items (2) |
| 55 |
| (535 | ) | (160 | ) | (762 | ) | ||||
Fixed costs |
| $ | 3,222 |
| $ | 3,147 |
| $ | 12,069 |
| $ | 12,571 |
|
|
|
|
|
|
|
|
|
|
| ||||
Consolidated net sales |
| $ | 6,419 |
| $ | 5,820 |
| $ | 26,109 |
| $ | 30,529 |
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed costs as a percent of consolidated net sales |
| 50.2 | % | 54.1 | % | 46.2 | % | 41.2 | % |
(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.
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 pre-tax 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 |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
Subsidiary/Affiliate Monetary Position Gain/(Loss) |
|
|
|
|
|
|
|
|
| ||||
Pre-tax exchange gains (losses) (includes equity affiliates) |
| $ | (8 | ) | $ | (286 | ) | $ | 280 |
| $ | (396 | ) |
Local tax benefits (expenses) |
| (24 | ) | 93 |
| (75 | ) | 130 |
| ||||
Net after-tax impact from subsidiary exchange gains (losses) |
| $ | (32 | ) | $ | (193 | ) | $ | 205 |
| $ | (266 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Hedging Program Gain/(Loss) |
|
|
|
|
|
|
|
|
| ||||
Pre-tax exchange gains (losses) |
| $ | 5 |
| $ | 170 |
| $ | (485 | ) | $ | 141 |
|
Tax benefits (expenses) |
| (2 | ) | (58 | ) | 166 |
| (47 | ) | ||||
Net after-tax impact from hedging program exchange gains (losses) |
| $ | 3 |
| $ | 112 |
| $ | (319 | ) | $ | 94 |
|
|
|
|
|
|
|
|
|
|
| ||||
Total Exchange Gain/(Loss) |
|
|
|
|
|
|
|
|
| ||||
Pretax exchange gains (losses) |
| $ | (3 | ) | $ | (116 | ) | $ | (205 | ) | $ | (255 | ) |
Tax benefits (expenses) |
| (26 | ) | 35 |
| 91 |
| 83 |
| ||||
Net after-tax exchange gains (losses) |
| $ | (29 | ) | $ | (81 | ) | $ | (114 | ) | $ | (172 | ) |
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 |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) before income taxes |
| $ | 572 |
| $ | (961 | ) | $ | 2,184 |
| $ | 2,391 |
|
Add: Significant items(1) |
| (55 | ) | 535 |
| 160 |
| 762 |
| ||||
Less: Net exchange gains (losses) |
| (3 | ) | (116 | ) | (205 | ) | (255 | ) | ||||
Income (loss) before income taxes, significant items and exchange gains/losses |
| $ | 520 |
| $ | (310 | ) | $ | 2,549 |
| $ | 3,408 |
|
|
|
|
|
|
|
|
|
|
| ||||
Provision for (benefit from) income taxes |
| $ | 127 |
| $ | (325 | ) | $ | 415 |
| $ | 381 |
|
Add: Tax benefit (expense) on significant items |
| (16 | ) | 150 |
| 58 |
| 231 |
| ||||
Tax benefits (expenses) on exchange gains/losses |
| (26 | ) | 35 |
| 91 |
| 83 |
| ||||
Provision for (benefit from) income taxes, excluding taxes on significant items and exchange gains/losses |
| $ | 85 |
| $ | (140 | ) | $ | 564 |
| $ | 695 |
|
|
|
|
|
|
|
|
|
|
| ||||
Effective income tax rate |
| 22.2 | % | 33.8 | % | 19.0 | % | 15.9 | % | ||||
Significant items effect |
| (0.7 | )% | 7.3 | % | 1.2 | % | 3.5 | % | ||||
Tax rate before significant items |
| 21.5 | % | 41.1 | % | 20.2 | % | 19.4 | % | ||||
Exchange gains (losses) effect |
| (5.2 | )% | 4.1 | % | 1.9 | % | 1.0 | % | ||||
Base income tax rate |
| 16.3 | % | 45.2 | % | 22.1 | % | 20.4 | % |
(1) See Schedule B for detail of significant items.