Exhibit 99.1
April 27, 2010 | Media Contact: | Anthony Farina |
WILMINGTON, Del. | | 302-773-4418 |
| | anthony.r.farina@usa.dupont.com |
| | |
| Investor Contact: | 302-774-4994 |
DuPont Reports Strong First-Quarter 2010 EPS; Raises Full-Year Guidance
All Segments and Regions Contributed to Growth
Highlights:
· DuPont’s first-quarter 2010 earnings per share were $1.24, compared to $.54 in the prior year.
· Sales were $8.5 billion, up 23 percent versus prior year. This reflects 19 percent higher volume, 2 percent higher local selling prices, a 3 percent benefit from currency and a 1 percent reduction from portfolio changes.
· Asia Pacific sales were $1.6 billion with volume up 65 percent in the quarter. Sales in Performance Polymers, Electronics & Communications, and Titanium Technologies were particularly strong. Volumes in emerging markets were also strong, up 28 percent.
· Raw material, energy and freight costs, adjusted for currency and volume, were about 2 percent lower versus prior year. The company expects these costs to trend higher as the year progresses, reflecting a full-year increase of about 5 percent.
· Spending increases for growth initiatives, primarily in Agriculture & Nutrition, and higher non-cash pension expense contributed to an increase in total fixed costs versus 2009. Continued productivity projects and restructuring savings improved fixed costs as a percentage of sales to 37 percent, which is comparable to pre-recession levels.
· Pharmaceuticals first-quarter pre-tax income was $221 million, about $60 million higher than anticipated. The company expects full-year Pharmaceuticals pre-tax income of $360-$400 million.
· DuPont increases its full-year 2010 earnings guidance to a range of $2.50 to $2.70 per share. The previous guidance was $2.15 to $2.45 per share.
“Our intense focus on customers, sustained R&D investments and productivity improvements are delivering growth,” said DuPont Chair and CEO Ellen Kullman. “Macro trends drove first-quarter demand for our science-based innovations, and DuPont was ready. The actions taken last year are benefiting the company as we emerge stronger in 2010.”
Global Consolidated Sales and Net Income
First-quarter 2010 consolidated net sales of $8.5 billion were 23 percent higher than the prior year. This reflects 19 percent higher volume, 2 percent higher local selling prices, and a 3 percent positive impact from currency exchange rates, partly offset by a 1 percent reduction from portfolio changes. The table below shows regional sales and variances versus first quarter 2009.
| | Three Months Ended
March 31, 2010 | | Percentage Change Due to: | |
(Dollars in billions) | | $ | | %
Change | | Local
Currency
Price | | Currency
Effect | | Volume | | Portfolio/
Other | |
U.S. | | $ | 3.5 | | 16 | | 4 | | — | | 13 | | (1 | ) |
EMEA* | | 2.4 | | 15 | | — | | 5 | | 10 | | — | |
Asia Pacific | | 1.6 | | 71 | | 3 | | 3 | | 65 | | — | |
Latin America | | 0.8 | | 21 | | (1 | ) | 7 | | 15 | | — | |
Canada | | 0.2 | | 16 | | 1 | | 11 | | 5 | | (1 | ) |
| | | | | | | | | | | | | |
Total Consolidated Sales | | $ | 8.5 | | 23 | | 2 | | 3 | | 19 | | (1 | ) |
* Europe, Middle East & Africa
Net income attributable to DuPont for the first quarter 2010 was $1,129 million versus $488 million in the prior year. The improvement reflects significantly higher sales volume, increased manufacturing capacity utilization, higher selling prices, currency benefit and lower raw material costs, partly offset by fixed cost increases for growth investments and higher non-cash pension expense. The company’s productivity and cost-cutting actions are essentially tracking according to plan.
2
Earnings Per Share
The table below shows year-over-year earnings per share (EPS) variances for the first quarter.
EPS ANALYSIS | |
| | | |
| | 1Q | |
| | �� | |
EPS - 2009 | | $ | .54 | |
| | | |
Local prices | | .14 | |
Variable costs* | | .07 | |
Volume | | .57 | |
Fixed costs * | | (.14 | ) |
Currency | | .10 | |
Other** | | (.04 | ) |
Tax | | .00 | |
EPS – 2010 | | $ | 1.24 | |
*Excluding volume & currency impact
** Principally exchange gains/losses (.02) and Pharmaceuticals (.02)
3
Business Segment Performance
The table below shows first quarter 2010 segment sales and related variances versus the prior year.
| | Three Months Ended | | Percentage Change | |
| | March 31, 2010 | | Due to: | |
SEGMENT SALES*
(Dollars in billions) | | $ | | % Change | | USD
Price | | Volume | | Portfolio
and Other | |
Agriculture & Nutrition | | $ | 3.2 | | 6 | | 5 | | 1 | | — | |
Electronics & Communications | | 0.6 | | 73 | | 13 | | 60 | | — | |
Performance Chemicals | | 1.4 | | 32 | | 3 | | 30 | | (1 | ) |
Performance Coatings | | 0.9 | | 23 | | 6 | | 17 | | — | |
Performance Materials | | 1.5 | | 63 | | 7 | | 56 | | — | |
Safety & Protection | | 0.8 | | 10 | | 2 | | 8 | | — | |
| | | | | | | | | | | | |
* Segment sales include transfers
Pre-tax operating income (PTOI) for first quarter 2010 was $1,803 million compared to a first quarter 2009 PTOI of $913 million. Segment PTOI (loss) is shown below.
PRE-TAX OPERATING INCOME (LOSS)
| | Three Months Ended
March 31 | |
| | | | | | $ change | |
(Dollars in millions) | | 2010 | | 2009 | | vs. 2009 | |
| | | | | | | |
Agriculture & Nutrition | | $ | 941 | | $ | 852 | | $ | 89 | |
Electronics & Communications | | 105 | | (34 | ) | 139 | |
Performance Chemicals | | 190 | | 44 | | 146 | |
Performance Coatings | | 45 | | (75 | ) | 120 | |
Performance Materials | | 230 | | (146 | ) | 376 | |
Safety & Protection | | 102 | | 64 | | 38 | |
Other | | (31 | ) | (44 | ) | 13 | |
| | $ | 1,582 | | $ | 661 | | $ | 921 | |
Pharmaceuticals | | 221 | | 252 | | (31 | ) |
Total Segment PTOI | | $ | 1,803 | | $ | 913 | | $ | 890 | |
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The following is a summary of business results for each of the company’s reportable segments, comparing first quarter 2010 with first quarter 2009, for sales and PTOI. All references to selling price are on a U.S. dollar basis, including the impact of currency.
Agriculture & Nutrition — Sales of $3.2 billion increased $180 million, or 6 percent, reflecting 5 percent higher selling prices and 1 percent volume growth. Segment sales reflect higher North America seed volumes and seed price gains in each region, partially offset by delays in the European planting season. Crop protection product volumes were down slightly reflecting northern hemisphere sales pattern shifts, which were partly offset by strong global sales for Rynaxypyr®. Food and nutrition product sales were up modestly. PTOI of $941 million improved 10 percent from higher selling prices, principally due to currency, and higher volumes.
Electronics & Communications — Sales of $631 million increased $266 million, or 73 percent, reflecting 60 percent higher volumes and 13 percent higher selling prices. The higher volumes were primarily due to strong global demand led by Asia Pacific, reflecting broad-based recovery, which were strongest in photovoltaics and semi-fab materials. The higher selling prices reflect pass-through of higher metals prices. PTOI of $105 million was up $139 million primarily due to significantly higher volumes.
Performance Chemicals — Sales of $1.4 billion increased $344 million, or 32 percent, reflecting a 30 percent increase in volume and 3 percent higher selling prices. The sales increase was primarily driven by strong continued recovery in titanium dioxide and fluoropolymers, with robust demand for refrigerants including strong adoption rates for ISCEON® as a preferred retrofit for R22. PTOI was $190 million, an improvement of $146 million, primarily due to higher volumes.
Performance Coatings — Sales of $902 million increased $170 million, or 23 percent, reflecting 17 percent higher volumes and a 6 percent increase in selling prices. Volumes reflect higher demand in global automotive OEM markets, and strong demand in Asia Pacific. PTOI was $45 million, up $120 million, reflecting higher volumes, lower raw material costs, and fixed cost productivity improvements including restructuring programs.
Performance Materials — Sales of $1.5 billion increased $592 million, or 63 percent, reflecting 56 percent higher volumes and a 7 percent increase in selling prices. The higher volumes were led by improvement in automotive, industrial, consumer and electronic markets, with strong volume recovery in all regions, led by Asia Pacific and Europe. PTOI was $230 million, an improvement of $376 million, primarily driven by higher volumes, lower raw material costs, and fixed cost productivity improvements including restructuring programs.
Safety & Protection — Sales of $789 million increased $71 million, or 10 percent, principally reflecting an 8 percent increase in volumes and 2 percent higher selling prices. The increase in volumes was primarily due to recovery in the automotive and industrial markets, coupled with moderate strengthening in construction markets. PTOI was $102 million, an improvement of $38 million. The increase primarily reflects higher volumes and lower raw material costs.
Additional information is available on the DuPont Investor Center website at www.dupont.com.
5
Outlook
DuPont increased its full-year earnings guidance to a range of $2.50-$2.70 per share from its previous range of $2.15-$2.45 per share. The new outlook reflects expected stronger sales growth and improved pre-tax operating margins, supported by continuing global economic expansion with particularly strong demand in Asia Pacific. The company expects free cash flow to be about $200 million higher than originally anticipated, and has increased its outlook from greater than $1.5 billion to more than $1.7 billion.
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.
# # #
4/27/10
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E. I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)
SCHEDULE A
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
Net sales | | $ | 8,484 | | $ | 6,871 | |
Other income, net | | 360 | | 399 | |
Total | | 8,844 | | 7,270 | |
| | | | | |
Cost of goods sold and other operating charges | | 5,796 | | 5,185 | |
Selling, general and administrative expenses | | 993 | | 907 | |
Research and development expense | | 365 | | 323 | |
Interest expense | | 103 | | 106 | |
Total | | 7,257 | | 6,521 | |
| | | | | |
Income before income taxes | | 1,587 | | 749 | |
Provision for income taxes | | 450 | | 260 | |
| | | | | |
Net income | | 1,137 | | 489 | |
| | | | | |
Less: Net income attributable to noncontrolling interests | | 8 | | 1 | |
| | | | | |
Net income attributable to DuPont | | $ | 1,129 | | $ | 488 | |
| | | | | |
Basic earnings per share of common stock | | $ | 1.24 | | $ | 0.54 | |
| | | | | |
Diluted earnings per share of common stock | | $ | 1.24 | | $ | 0.54 | |
| | | | | |
Dividends per share of common stock | | $ | 0.41 | | $ | 0.41 | |
| | | | | |
Average number of shares outstanding used in earnings per share (EPS) calculation: | | | | | |
Basic | | 905,486,000 | | 903,893,000 | |
Diluted | | 911,891,000 | | 905,665,000 | |
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E. I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
| | March 31,
2010 | | December 31,
2009 | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 2,911 | | $ | 4,021 | |
Marketable securities | | 1,599 | | 2,116 | |
Accounts and notes receivable, net | | 7,064 | | 5,030 | |
Inventories | | 5,062 | | 5,380 | |
Prepaid expenses | | 222 | | 129 | |
Income taxes | | 578 | | 612 | |
Total current assets | | 17,436 | | 17,288 | |
Property, plant and equipment, net of accumulated depreciation (March 31, 2010 - $18,052; December 31, 2009 - $17,821) | | 10,960 | | 11,094 | |
Goodwill | | 2,137 | | 2,137 | |
Other intangible assets | | 2,499 | | 2,552 | |
Investment in affiliates | | 1,050 | | 1,014 | |
Other assets | | 3,904 | | 4,100 | |
Total | | $ | 37,986 | | $ | 38,185 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 3,179 | | $ | 3,542 | |
Short-term borrowings and capital lease obligations | | 1,484 | | 1,506 | |
Income taxes | | 432 | | 154 | |
Other accrued liabilities | | 3,501 | | 4,188 | |
Total current liabilities | | 8,596 | | 9,390 | |
Long-term borrowings and capital lease obligations | | 9,543 | | 9,528 | |
Other liabilities | | 11,295 | | 11,490 | |
Deferred income taxes | | 129 | | 126 | |
Total liabilities | | 29,563 | | 30,534 | |
| | | | | |
Commitments and contingent liabilities | | | | | |
| | | | | |
Stockholders’ equity | | | | | |
Preferred stock | | 237 | | 237 | |
Common stock, $0.30 par value; 1,800,000,000 shares authorized; issued at March 31, 2010 - 992,976,000; December 31, 2009 - 990,855,000 | | 298 | | 297 | |
Additional paid-in capital | | 8,514 | | 8,469 | |
Reinvested earnings | | 11,463 | | 10,710 | |
Accumulated other comprehensive loss | | (5,804 | ) | (5,771 | ) |
Common stock held in treasury, at cost (87,041,000 shares at March 31, 2010 and December 31, 2009) | | (6,727 | ) | (6,727 | ) |
Total DuPont stockholders’ equity | | 7,981 | | 7,215 | |
Noncontrolling interests | | 442 | | 436 | |
Total equity | | 8,423 | | 7,651 | |
Total | | $ | 37,986 | | $ | 38,185 | |
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E. I. du Pont de Nemours and Company
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
SCHEDULE A (continued)
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
| | | | | |
Cash used for operating activities | | $ | (1,065 | ) | $ | (832 | ) |
| | | | | |
Investing activities | | | | | |
Purchases of property, plant and equipment | | (185 | ) | (358 | ) |
Investments in affiliates | | (12 | ) | (8 | ) |
Other investing activities - net | | 581 | | (27 | ) |
Cash provided by (used for) investing activities | | 384 | | (393 | ) |
| | | | | |
Financing activities | | | | | |
Dividends paid to stockholders | | (374 | ) | (375 | ) |
Net (decrease) increase in borrowings | | (9 | ) | 433 | |
Other financing activities - net | | 13 | | (38 | ) |
Cash (used for) provided by financing activities | | (370 | ) | 20 | |
| | | | | |
Effect of exchange rate changes on cash | | (59 | ) | (54 | ) |
| | | | | |
Decrease in cash and cash equivalents | | (1,110 | ) | (1,259 | ) |
| | | | | |
Cash and cash equivalents at beginning of period | | 4,021 | | 3,645 | |
| | | | | |
Cash and cash equivalents at end of period | | $ | 2,911 | | $ | 2,386 | |
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E. I. du Pont de Nemours and Company
Schedules of Significant Items
(Dollars in millions, except per share amounts)
SCHEDULE B
SIGNIFICANT ITEMS
There were no significant items for the three months ended March 31, 2010 and 2009, respectively.
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E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE C
| | Three Months Ended
March 31, | |
SEGMENT SALES (1) | | 2010 | | 2009 | |
Agriculture & Nutrition | | $ | 3,242 | | $ | 3,062 | |
Electronics & Communications | | 631 | | 365 | |
Performance Chemicals | | 1,414 | | 1,070 | |
Performance Coatings | | 902 | | 732 | |
Performance Materials | | 1,534 | | 942 | |
Safety & Protection | | 789 | | 718 | |
Other | | 48 | | 28 | |
Total Segment sales | | $ | 8,560 | | $ | 6,917 | |
| | | | | |
Elimination of transfers | | (76 | ) | (46 | ) |
Consolidated net sales | | $ | 8,484 | | $ | 6,871 | |
| | Three Months Ended
March 31, | |
PRETAX OPERATING INCOME/(LOSS) (PTOI) | | 2010 | | 2009 | |
Agriculture & Nutrition | | $ | 941 | | $ | 852 | |
Electronics & Communications | | 105 | | (34 | ) |
Performance Chemicals | | 190 | | 44 | |
Performance Coatings | | 45 | | (75 | ) |
Performance Materials | | 230 | | (146 | ) |
Safety & Protection | | 102 | | 64 | |
Other | | (31 | ) | (44 | ) |
| | 1,582 | | 661 | |
Pharmaceuticals | | 221 | | 252 | |
Total Segment PTOI | | 1,803 | | 913 | |
| | | | | |
Net exchange gains (losses) (2) | | 30 | | 70 | |
Corporate expenses & net interest | | (246 | ) | (234 | ) |
Income before income taxes | | $ | 1,587 | | $ | 749 | |
(1) Sales for the reporting segments include transfers.
(2) Gains and losses resulting from the company’s hedging program are largely offset by associated tax effects. See Schedule D for additional information.
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E. I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D
Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
| | | | | |
Income before income taxes | | $ | 1,587 | | $ | 749 | |
Less: Net income attributable to noncontrolling interests | | 8 | | 1 | |
Add: Interest expense | | 103 | | 106 | |
Adjusted EBIT | | 1,682 | | 854 | |
Add: Depreciation and amortization | | 366 | | 399 | |
Adjusted EBITDA | | $ | 2,048 | | $ | 1,253 | |
Calculation of Free Cash Flow
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
Cash used for operating activities | | $ | (1,065 | ) | $ | (832 | ) |
Less: Purchases of property, plant and equipment | | 185 | | 358 | |
Free cash flow | | $ | (1,250 | ) | $ | (1,190 | ) |
Reconciliations of Fixed Costs as a Percent of Sales
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
| | | | | |
Total charges and expenses - consolidated income statements | | $ | 7,257 | | $ | 6,521 | |
Remove: | | | | | |
Interest expense | | (103 | ) | (106 | ) |
Variable costs (1) | | (3,985 | ) | (3,434 | ) |
Fixed costs | | $ | 3,169 | | $ | 2,981 | |
| | | | | |
Consolidated net sales | | 8,484 | | 6,871 | |
| | | | | |
Fixed costs as a percent of consolidated net sales | | 37.4 | % | 43.4 | % |
(1) Includes variable manufacturing costs, freight, commissions and other selling expenses which vary with the volume of sales.
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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
March 31, | |
| | 2010 | | 2009 | |
Subsidiary/Affiliate Monetary Position Gain/(Loss) | | | | | |
Pre-tax exchange gains (losses) (includes equity affiliates) (1) | | $ | (184 | ) | $ | (125 | ) |
Local tax benefits (expenses) | | (10 | ) | (32 | ) |
Net after-tax impact from subsidiary exchange gains (losses) (1) | | $ | (194 | ) | $ | (157 | ) |
| | | | | |
Hedging Program Gain/(Loss) | | | | | |
Pre-tax exchange gains (losses) | | $ | 214 | | $ | 195 | |
Tax benefits (expenses) | | (75 | ) | (71 | ) |
Net after-tax impact from hedging program exchange gains (losses) | | $ | 139 | | $ | 124 | |
| | | | | |
Total Exchange Gain/(Loss) | | | | | |
Pre-tax exchange gains (losses) | | $ | 30 | | $ | 70 | |
Tax benefits (expenses) | | (85 | ) | (103 | ) |
Net after-tax exchange gains (losses) | | $ | (55 | ) | $ | (33 | ) |
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).”
(1) The net exchange loss for the three months ended March 31, 2010 includes a $36 pre-tax ($35 after-tax) exchange loss associated with the devaluation of the Venezuelan bolivar.
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.
| | Three Months Ended
March 31, | |
| | 2010 | | 2009 | |
| | | | | |
Income before income taxes | | $ | 1,587 | | $ | 749 | |
Less: Net exchange gains (losses) | | 30 | | 70 | |
Income before income taxes and exchange gains/losses | | $ | 1,557 | | $ | 679 | |
| | | | | |
Provision for income taxes | | $ | 450 | | $ | 260 | |
Tax benefits (expenses) on exchange gains/losses | | (85 | ) | (103 | ) |
Provision for income taxes, excluding taxes on exchange gains/losses | | $ | 365 | | $ | 157 | |
| | | | | |
Effective income tax rate | | 28.4 | % | 34.7 | % |
Exchange gains (losses) effect | | (5 | )% | (11.6 | )% |
Base income tax rate | | 23.4 | % | 23.1 | % |
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E. I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)
SCHEDULE D (continued)
Reconciliation of Earnings Per Share (EPS) Outlook
| | Year Ended | |
| | December 31, | |
| | 2010
Outlook | | 2009
Actual | |
| | | | | |
Earnings per share - excluding significant items | | $ | 2.50 - 2.70 | | $ | 2.03 | |
Net restructuring and hurricane related items | | — | | (0.11 | ) |
Reported EPS | | $ | 2.50 - $2.70 | | $ | 1.92 | |
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