DuPont Delivers Strong EPS Growth on 32% Higher Sales for Third Quarter 2011
Full-year Earnings Outlook Narrowed to Upper Half of Previous Range
WILMINGTON, Del., Oct. 25, 2011 /PRNewswire/ --
Highlights:
- Third quarter 2011 earnings were $.69 per share excluding significant items (see Schedule B) versus $.40 per share in the prior year. Reported third quarter 2011 earnings were $.48 per share versus $.40 per share in the prior year.
- Sales increased 32 percent to $9.2 billion with 15 percent higher local prices, 4 percent currency benefit, 1 percent higher volume, and a 12 percent net increase from portfolio changes. Sales in developing markets grew 38 percent.
- Growth in demand for the company's agricultural products and further expansion into food ingredient and enzyme markets offset destocking in photovoltaics and specialty polymers.
- Segment pre-tax operating income excluding significant items increased 50 percent to $1.1 billion, largely driven by improvements in the Performance Chemicals and Agriculture segments and the acquisition of Danisco.
- DuPont is on track to meet its full-year 2011 productivity targets for fixed costs and working capital. Year-to-date fixed cost productivity totals more than $250 million.
- Given the strong performance in the third quarter, the company has raised its expectations for full-year 2011 earnings to a range of $3.97 to $4.05 per share excluding significant items. This moves the range to the upper half of the company's previous guidance of $3.90 to $4.05 per share.
"The resilience and diversity of DuPont's business portfolio was evident in our strong third quarter results. Despite turbulent global economic and market conditions, we delivered solid growth through innovative products and process technologies, disciplined execution and continued productivity gains," said DuPont Chair and CEO Ellen Kullman. "Our portfolio is further strengthened by the rapid integration of Danisco, continued capacity expansions and selective growth investments across many of our businesses."
Global Consolidated Sales and Net Income
Third quarter 2011 consolidated net sales of $9.2 billion were 32 percent higher than the prior year reflecting 15 percent higher local prices, 4 percent favorable currency effect, 1 percent higher volume and a 12 percent net increase from portfolio changes. The table below shows regional sales and variances versus the third quarter 2010.
Three Months Ended | Percentage Change Due to: | ||||||||||||
(Dollars in billions) | $ | % Change | Local | Currency | Volume | Portfolio/ | |||||||
U.S. & Canada | $ 2.9 | 23 | 12 | - | (1) | 12 | |||||||
EMEA* | 2.4 | 40 | 14 | 11 | (2) | 17 | |||||||
Asia Pacific | 2.4 | 29 | 18 | 4 | (1) | 8 | |||||||
Latin America | 1.5 | 43 | 16 | 3 | 17 | 7 | |||||||
Total Consolidated Sales | $ 9.2 | 32 | 15 | 4 | 1 | 12 | |||||||
* Europe, Middle East & Africa | |||||||||||||
Third quarter 2011 net income attributable to DuPont was $452 million versus $367 million in the third quarter 2010. Excluding significant items, net income attributable to DuPont increased $288 million, or 78 percent, to $655 million. The increase principally reflects higher selling prices and currency benefit, partly offset by increased spending for selling, marketing and research and development, and increased costs for raw materials, energy, and freight.
Earnings Per Share
The table below shows year-over-year earnings per share (EPS) variances for the third quarter.
EPS ANALYSIS | |||||||
3Q | |||||||
EPS 2010 | $.40 | ||||||
Local prices | .87 | ||||||
Variable cost* | (.50) | ||||||
Volume | .07 | ||||||
Fixed cost* | (.21) | ||||||
Currency | .08 | ||||||
Exchange gains/losses | (.05) | ||||||
Higher shares outstanding | (.02) | ||||||
Income tax | .05 | ||||||
Danisco impact** | .04 | ||||||
Other*** | (.04) | ||||||
EPS 2011 – Excluding significant items | $.69 | ||||||
Significant items - (schedule B) | (.21) | ||||||
EPS 2011 | $.48 | ||||||
* Excludes volume and currency impacts | |||||||
** After interest expense and additional depreciation/amortization expense | |||||||
*** Principally lower Pharmaceuticals income | |||||||
Business Segment Performance
The table below shows third quarter 2011 segment sales and related variances versus the prior year.
SEGMENT SALES* | Three Months Ended | Percentage Change | ||||||||
(Dollars in billions) | September 30, 2011 | Due to: | ||||||||
$ | % Change | USD Price | Volume | Portfolio and Other | ||||||
Agriculture | $ 1.4 | 41 | 15 | 26 | - | |||||
Electronics & Communications | 0.8 | 20 | 28 | (8) | - | |||||
Industrial Biosciences | 0.3 | nm | nm | nm | nm | |||||
Nutrition & Health | 0.8 | 178 | 6 | 4 | 168 | |||||
Performance Chemicals | 2.1 | 28 | 29 | (1) | - | |||||
Performance Coatings | 1.1 | 17 | 13 | 4 | - | |||||
Performance Materials | 1.7 | 11 | 18 | (7) | - | |||||
Safety & Protection | 1.0 | 15 | 8 | - | 7 | |||||
* Segment sales include transfers | ||||||||||
Segment pre-tax operating income (PTOI), excluding significant items, increased 50 percent to $1.1 billion largely driven by improvements in Performance Chemicals and Agriculture, and acquisition benefits in Nutrition & Health and Industrial Biosciences, as shown in the table below.
SEGMENT PTOI excluding Significant Items* | Change versus 2010 | |||||||||||
(Dollars in millions) | 3Q 2011 | 3Q 2010 | $ | % | ||||||||
Agriculture | $ (69) | $ (191) | $ 122 | nm | ||||||||
Electronics & Communications | 99 | 126 | (27) | -21% | ||||||||
Industrial Biosciences | 34 | - | 34 | nm | ||||||||
Nutrition & Health | 55 | 10 | 45 | 450% | ||||||||
Performance Chemicals | 593 | 292 | 301 | 103% | ||||||||
Performance Coatings | 72 | 64 | 8 | 13% | ||||||||
Performance Materials | 231 | 281 | (50) | -18% | ||||||||
Safety & Protection | 118 | 134 | (16) | -12% | ||||||||
Other | (60) | (64) | 4 | nm | ||||||||
$ 1,073 | $ 652 | $ 421 | 65% | |||||||||
Pharmaceuticals | 70 | 111 | (41) | -37% | ||||||||
Total Segment PTOI | $ 1,143 | $ 763 | $ 380 | 50% | ||||||||
* See Schedules B and C for listing of significant items and their impact by segment. | ||||||||||||
The following is a summary of business results for each of the company's reportable segments, comparing third quarter 2011 with third quarter 2010, for sales and PTOI (loss) excluding significant items. References to selling price are on a U.S. dollar basis, including the impact of currency.
Agriculture - Sales of $1.4 billion were up $0.4 billion, or 41 percent, from 26 percent higher volume and 15 percent higher selling prices principally reflecting a strong, early start to the Latin American season. For Pioneer seed, volume and price growth was delivered in both corn and soybeans. Crop Protection sales increased across all regions and market segments, led by continued strong demand for Rynaxypyr® insecticide. PTOI of $(69) million improved from $(191) million due to higher sales, partially offset by growth investments and portfolio changes.
Electronics & Communications - Sales of $841 million were up 20 percent, with 28 percent higher selling prices, primarily metals pass-through, and 8 percent lower volume. Lower volume reflects destocking in photovoltaics, and softness in plasma displays and packaging graphics. PTOI of $99 million decreased $27 million on lower volume.
Industrial Biosciences - Sales of $293 million and PTOI of $34 million reflect the acquisition of Danisco's enzyme business. PTOI includes approximately $4 million of amortization expense associated with the fair value step-up of intangible assets acquired as part of the acquisition.
Nutrition & Health - Sales of $844 million were up $540 million principally due to the acquisition of Danisco's specialty food ingredients business. PTOI of $55 million increased $45 million reflecting the acquisition and includes $22 million of amortization expense associated with the fair value step-up of the acquired intangible assets.
Performance Chemicals - Sales of $2.1 billion were up 28 percent, with 29 percent higher selling prices and 1 percent lower volume. Higher selling prices were driven by strong global demand for titanium dioxide and fluoropolymers and pass-through pricing of higher raw material costs for industrial chemicals. Volume declined in refrigerants and industrial chemicals. PTOI of $593 million increased $301 million due to higher selling prices.
Performance Coatings - Sales of $1.1 billion were up 17 percent, with 13 percent higher selling prices and 4 percent higher volume. Higher selling prices reflect favorable currency and pricing actions across all market segments to offset higher raw material costs. Demand increased for OEM motor vehicle coatings and remained strong for industrial coatings, particularly in the North American heavy-duty truck market. PTOI of $72 million increased $8 million on strong sales performance led by refinish.
Performance Materials - Sales of $1.7 billion were up 11 percent, with 18 percent higher selling prices and 7 percent lower volume. Higher selling prices offset higher raw material costs. Lower volume reflects broad-based channel destocking along with softening in consumer and industrial markets, and production-related supply issues in ethylene-based polymers. PTOI of $231 million decreased $50 million on lower volume.
Safety & Protection - Sales of $1.0 billion were up 15 percent, with 8 percent higher selling prices and a 7 percent increase from the MECS acquisition. Higher selling prices primarily reflect pricing actions to offset raw material cost increases. PTOI of $118 million decreased $16 million on destocking in industrial markets and higher spending for growth initiatives including the Cooper River Kevlar® expansion, which more than offset the impact of the acquisition and favorable currency.
Additional information is available on the DuPont Investor Center website at www.dupont.com.
Outlook
Given the strong performance in the third quarter, the company has raised its expectations for full-year 2011 earnings to a range of $3.97 to $4.05 per share excluding significant items. This moves the range to the upper half of the company's previous guidance of $3.90 to $4.05 per share. Expectations for the fourth quarter include slowing global growth, some destocking, and the recognition that a portion of Agriculture sales in Latin America was shifted to the third quarter by the early start of the planting season.
Use of Non-GAAP Measures
Management believes that certain non-GAAP measurements 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 (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.
Forward-Looking Statements: This news release contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "believes," "intends," "estimates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company's intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses. 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 | Nine Months Ended | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
Net sales | $ 9,238 | $ 7,001 | $ 29,536 | $ 24,101 | ||||||||
Other income, net (a) | 161 | 66 | 415 | 890 | ||||||||
Total | 9,399 | 7,067 | 29,951 | 24,991 | ||||||||
Cost of goods sold and other operating charges (a) | 7,107 | 5,443 | 21,129 | 17,223 | ||||||||
Selling, general and administrative expenses | 1,014 | 782 | 3,177 | 2,796 | ||||||||
Research and development expense (a) | 557 | 409 | 1,418 | 1,178 | ||||||||
Interest expense | 116 | 103 | 331 | 309 | ||||||||
Employee separation / asset related charges, net (a) | 36 | - | 36 | - | ||||||||
Total | 8,830 | 6,737 | 26,091 | 21,506 | ||||||||
Income before income taxes | 569 | 330 | 3,860 | 3,485 | ||||||||
Provision for (benefit from) income taxes (a) | 109 | (39) | 727 | 811 | ||||||||
Net income | 460 | 369 | 3,133 | 2,674 | ||||||||
Less: Net income attributable to noncontrolling interests | 8 | 2 | 32 | 19 | ||||||||
Net income attributable to DuPont | $ 452 | $ 367 | $ 3,101 | $ 2,655 | ||||||||
Basic earnings per share of common stock | $ 0.48 | $ 0.40 | $ 3.33 | $ 2.92 | ||||||||
Diluted earnings per share of common stock | $ 0.48 | $ 0.40 | $ 3.28 | $ 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 | 932,356,000 | 908,366,000 | 929,369,000 | 906,991,000 | ||||||||
Diluted | 943,485,000 | 918,500,000 | 942,812,000 | 914,987,000 | ||||||||
(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) | |||||
September 30, | December 31, | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ 2,750 | $ 4,263 | |||
Marketable securities | 229 | 2,538 | |||
Accounts and notes receivable, net | 8,544 | 5,635 | |||
Inventories | 6,413 | 5,967 | |||
Prepaid expenses | 154 | 122 | |||
Deferred income taxes | 705 | 534 | |||
Total current assets | 18,795 | 19,059 | |||
Property, plant and equipment, net of accumulated depreciation | 13,235 | 11,339 | |||
Goodwill | 5,493 | 2,617 | |||
Other intangible assets | 5,550 | 2,704 | |||
Investment in affiliates | 1,079 | 1,041 | |||
Other assets | 3,642 | 3,650 | |||
Total | $ 47,794 | $ 40,410 | |||
Liabilities and Stockholders' Equity | |||||
Current liabilities | |||||
Accounts payable | $ 3,981 | $ 4,230 | |||
Short-term borrowings and capital lease obligations | 3,301 | 133 | |||
Income taxes | 520 | 225 | |||
Other accrued liabilities | 3,568 | 4,801 | |||
Total current liabilities | 11,370 | 9,389 | |||
Long-term borrowings and capital lease obligations | 12,200 | 10,137 | |||
Other liabilities | 11,065 | 11,026 | |||
Deferred income taxes | 1,135 | 115 | |||
Total liabilities | 35,770 | 30,667 | |||
Commitments and contingent liabilities | |||||
Stockholders' equity | |||||
Preferred stock | 237 | 237 | |||
Common stock, $0.30 par value; 1,800,000,000 shares authorized; | 303 | 301 | |||
Additional paid-in capital | 9,983 | 9,227 | |||
Reinvested earnings | 13,432 | 12,030 | |||
Accumulated other comprehensive loss | (5,684) | (5,790) | |||
Common stock held in treasury, at cost (87,041,000 shares | (6,727) | (6,727) | |||
Total DuPont stockholders' equity | 11,544 | 9,278 | |||
Noncontrolling interests | 480 | 465 | |||
Total equity | 12,024 | 9,743 | |||
Total | $ 47,794 | $ 40,410 | |||
E. I. du Pont de Nemours and Company Condensed Consolidated Statement of Cash Flows (Dollars in millions ) | ||||
SCHEDULE A (continued) | ||||
Nine Months Ended | ||||
2011 | 2010 | |||
Cash provided by (used for) operating activities | $ 431 | $ 35 | ||
Investing activities | ||||
Purchases of property, plant and equipment | (1,211) | (899) | ||
Investments in affiliates | (35) | (71) | ||
Payments for businesses (net of cash acquired) | (6,459) | - | ||
Net (increase) decrease in short-term financial instruments | 2,365 | 201 | ||
Other investing activities - net | (236) | 475 | ||
Cash provided by (used for) investing activities | (5,576) | (294) | ||
Financing activities | ||||
Dividends paid to stockholders | (1,152) | (1,122) | ||
Net increase (decrease) in borrowings | 4,503 | 1,327 | ||
Repurchase of common stock | (672) | - | ||
Proceeds from exercise of stock options | 833 | 199 | ||
Other financing activities - net | 52 | (18) | ||
Cash provided by (used for) financing activities | 3,564 | 386 | ||
Effect of exchange rate changes on cash | 68 | (60) | ||
Increase (decrease) in cash and cash equivalents | (1,513) | 67 | ||
Cash and cash equivalents at beginning of period | 4,263 | 4,021 | ||
Cash and cash equivalents at end of period | $ 2,750 | $ 4,088 | ||
E. I. du Pont de Nemours and Company Schedule of Significant Items (Dollars in millions, except per share amounts ) | |||||||||||||
SCHEDULE B | |||||||||||||
SIGNIFICANT ITEMS | |||||||||||||
Pre-tax | After-tax | ($ Per Share) | |||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | ||||||||
1st Quarter - Total | $ - | $ - | $ - | $ - | $ - | $ - | |||||||
2nd Quarter | |||||||||||||
Transaction costs related to the acquisition of Danisco (a) | $ (103) | $ - | $ (81) | $ - | $ (0.08) | $ - | |||||||
Adjustment of interest and accruals related to income tax settlements (b) | - | 59 | - | 87 | - | 0.09 | |||||||
2nd Quarter - Total | $ (103) | $ 59 | $ (81) | $ 87 | $ (0.08) | $ 0.09 | |||||||
3rd Quarter | |||||||||||||
Transaction costs and restructuring charge related to the acquisition of Danisco (c) | $ (171) | $ - | $ (122) | $ - | $ (0.13) | $ - | |||||||
Customer claims charge (d) | (75) | - | (48) | - | (0.05) | - | |||||||
Charge related to milestone payment for licensing agreement (e) | (50) | - | (33) | - | (0.03) | - | |||||||
3rd Quarter - Total | $ (296) | $ - | $ (203) | $ - | $ (0.21) | $ - | |||||||
Year-to-date - Total (f) | $ (399) | $ 59 | $ (284) | $ 87 | $ (0.30) | $ 0.09 | |||||||
(a) | Second quarter and year-to-date 2011 included charges related to the Danisco acquisition of $(103) recorded in Cost of goods sold and other operating charges. These charges included $(60) of transaction costs and a $(43) charge related to the fair value step-up of inventories that were acquired from Danisco and sold in the second quarter 2011. Pre-tax charges by segment were: Industrial Biosciences - $(17), Nutrition & Health - $(33), and Corporate expenses - $(53). | ||||||||||||
(b) | Second quarter and year-to-date 2010 included benefits for the adjustment of accrued interest of $59 ($38 after-tax) recorded in Other income, net and the adjustment of income tax accruals of $49 associated with settlements of tax contingencies related to prior years. | ||||||||||||
(c) | Third quarter and year-to-date 2011 included charges related to the Danisco acquisition of $(171). These charges included $(135) recorded in Cost of goods sold and other operating charges for $(3) of transaction costs and a $(132) charge related to the fair value step-up of inventories that were acquired from Danisco and sold in the third quarter 2011. These charges also included a $(36) restructuring charge recorded in Employee separation / asset related charges, net related to severance and related benefit costs. Pre-tax charges by segment were: Industrial Biosciences - $(61), Nutrition & Health - $(89), Other - $(18), and Corporate expenses - $(3). | ||||||||||||
(d) | Third quarter and year-to-date 2011 included a $(75) charge recorded in Cost of goods sold and other operating charges associated with the company's process to fairly resolve claims associated with the use of Imprelis® herbicide. The company will continue to evaluate reported claim damage as additional information becomes available, which could result in future charges that cannot be reasonably estimated at this time; the company intends to seek recovery from its insurance carriers for costs associated with this matter in excess of $100. This matter relates to the Agriculture segment. | ||||||||||||
(e) | Third quarter and year-to-date 2011 included a $(50) charge recorded in Research and development expense in connection with a milestone payment associated with a Pioneer licensing agreement. | ||||||||||||
(f) | Earnings per share for the year may not equal the sum of quarterly earnings per share due to changes in average share calculations. | ||||||||||||
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 | Nine Months Ended | ||||||||||
SEGMENT SALES (1) | 2011 | 2010 | 2011 | 2010 | |||||||
Agriculture | $ 1,368 | $ 967 | $ 7,869 | $ 6,641 | |||||||
Electronics & Communications | 841 | 703 | 2,543 | 1,991 | |||||||
Industrial Biosciences | 293 | - | 416 | - | |||||||
Nutrition & Health | 844 | 304 | 1,654 | 902 | |||||||
Performance Chemicals | 2,142 | 1,675 | 5,934 | 4,658 | |||||||
Performance Coatings | 1,100 | 937 | 3,198 | 2,801 | |||||||
Performance Materials | 1,745 | 1,578 | 5,197 | 4,688 | |||||||
Safety & Protection | 1,001 | 871 | 2,991 | 2,505 | |||||||
Other | 2 | 49 | 39 | 154 | |||||||
Total Segment sales | 9,336 | 7,084 | 29,841 | 24,340 | |||||||
Elimination of transfers | (98) | (83) | (305) | (239) | |||||||
Consolidated net sales | $ 9,238 | $ 7,001 | $ 29,536 | $ 24,101 | |||||||
(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 | Nine Months Ended | ||||||||
PRE-TAX OPERATING INCOME/(LOSS) (PTOI) | 2011 | 2010 | 2011 | 2010 | |||||
Agriculture | $ (194) | $ (191) | $ 1,743 | $ 1,478 | |||||
Electronics & Communications | 99 | 126 | 313 | 339 | |||||
Industrial Biosciences | (27) | - | (34) | - | |||||
Nutrition & Health | (34) | 10 | (4) | 44 | |||||
Performance Chemicals | 593 | 292 | 1,490 | 756 | |||||
Performance Coatings | 72 | 64 | 210 | 184 | |||||
Performance Materials | 231 | 281 | 773 | 772 | |||||
Safety & Protection | 118 | 134 | 406 | 357 | |||||
Pharmaceuticals | 70 | 111 | 200 | 402 | |||||
Other | (78) | (64) | (179) | (111) | |||||
Total Segment PTOI | 850 | 763 | 4,918 | 4,221 | |||||
Net exchange gains (losses) (1) | (6) | (160) | (145) | (25) | |||||
Corporate expenses & net interest | (275) | (273) | (913) | (711) | |||||
Income before income taxes | $ 569 | $ 330 | $ 3,860 | $ 3,485 | |||||
Three Months Ended | Nine Months Ended | ||||||||
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2) | 2011 | 2010 | 2011 | 2010 | |||||
Agriculture | $ (125) | $ - | $ (125) | $ - | |||||
Electronics & Communications | - | - | - | - | |||||
Industrial Biosciences | (61) | - | (78) | - | |||||
Nutrition & Health | (89) | - | (122) | - | |||||
Performance Chemicals | - | - | - | - | |||||
Performance Coatings | - | - | - | - | |||||
Performance Materials | - | - | - | - | |||||
Safety & Protection | - | - | - | - | |||||
Pharmaceuticals | - | - | - | - | |||||
Other | (18) | - | (18) | - | |||||
Total significant items by segment | $ (293) | $ - | $ (343) | $ - | |||||
Three Months Ended | Nine Months Ended | ||||||||
PTOI EXCLUDING SIGNIFICANT ITEMS | 2011 | 2010 | 2011 | 2010 | |||||
Agriculture | $ (69) | $ (191) | $ 1,868 | $ 1,478 | |||||
Electronics & Communications | 99 | 126 | 313 | 339 | |||||
Industrial Biosciences | 34 | - | 44 | - | |||||
Nutrition & Health | 55 | 10 | 118 | 44 | |||||
Performance Chemicals | 593 | 292 | 1,490 | 756 | |||||
Performance Coatings | 72 | 64 | 210 | 184 | |||||
Performance Materials | 231 | 281 | 773 | 772 | |||||
Safety & Protection | 118 | 134 | 406 | 357 | |||||
Pharmaceuticals | 70 | 111 | 200 | 402 | |||||
Other | (60) | (64) | (161) | (111) | |||||
Total Segment PTOI excluding significant items | $ 1,143 | $ 763 | $ 5,261 | $ 4,221 | |||||
(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 | Nine Months Ended | ||||||||||||||||||
2011 | 2010 | % | 2011 | 2010 | % | ||||||||||||||
Segment PTOI | $ 850 | $ 763 | 11% | $ 4,918 | $ 4,221 | 17% | |||||||||||||
Significant items (benefit) charge included in PTOI (per Schedule C) | 293 | - | 343 | - | |||||||||||||||
Segment PTOI excluding significant items | $ 1,143 | $ 763 | 50% | $ 5,261 | $ 4,221 | 25% | |||||||||||||
Net income attributable to DuPont | $ 452 | $ 367 | 23% | $ 3,101 | $ 2,655 | 17% | |||||||||||||
Significant items (benefit) charge included in net income attributable to DuPont (per Schedule B) | 203 | - | 284 | (87) | |||||||||||||||
Net income attributable to DuPont excluding significant items | $ 655 | $ 367 | 78% | $ 3,385 | $ 2,568 | 32% | |||||||||||||
EPS | $ 0.48 | $ 0.40 | 20% | $ 3.28 | $ 2.89 | 13% | |||||||||||||
Significant items (benefit) charge included in EPS (per Schedule B) | 0.21 | - | 0.30 | (0.09) | |||||||||||||||
EPS excluding significant items | $ 0.69 | $ 0.40 | 73% | $ 3.58 | $ 2.80 | 28% | |||||||||||||
Average number of diluted shares outstanding | 943,485,000 | 918,500,000 | 2.7% | 942,812,000 | 914,987,000 | 3.0% | |||||||||||||
Reconciliation of Earnings Per Share (EPS) Outlook | |||||||||||||||||||
Year Ended | |||||||||||||||||||
December 31, | |||||||||||||||||||
2011 | 2010 | ||||||||||||||||||
Earnings per share - excluding significant items | $3.97 to $4.05 | $ 3.28 | |||||||||||||||||
Danisco acquisition related costs | (0.23) to (0.25) | - | |||||||||||||||||
Customer claims charge | (0.05) | - | |||||||||||||||||
Charge related to a licensing agreement | (0.03) | (0.03) | |||||||||||||||||
Adjustments of interest and accruals related to income tax settlements and tax valuation allowances | - | 0.14 | |||||||||||||||||
Loss on early extinguishment of debt | - | (0.13) | |||||||||||||||||
Reversal of accruals related to the 2008 and 2009 restructuring reserves | - | 0.02 | |||||||||||||||||
Reported EPS | $3.64 to $3.74 | $ 3.28 | |||||||||||||||||
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 | Nine Months Ended | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Income before income taxes | $ 569 | $ 330 | $ 3,860 | $ 3,485 | |||||||||||
Less: Net income attributable to noncontrolling interests | 8 | 2 | 32 | 19 | |||||||||||
Add: Interest expense | 116 | 103 | 331 | 309 | |||||||||||
Adjusted EBIT | 677 | 431 | 4,159 | 3,775 | |||||||||||
Add: Depreciation and amortization | 395 | 325 | 1,139 | 1,046 | |||||||||||
Adjusted EBITDA | $ 1,072 | $ 756 | $ 5,298 | $ 4,821 | |||||||||||
Calculation of Free Cash Flow | |||||||||||||||
Nine Months Ended | |||||||||||||||
2011 | 2010 | ||||||||||||||
Cash provided by (used for) operating activities | $ 431 | $ 35 | |||||||||||||
Less: Purchases of property, plant and equipment | 1,211 | 899 | |||||||||||||
Free cash flow | $ (780) | $ (864) | |||||||||||||
Reconciliations of Fixed Costs as a Percent of Sales | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Total charges and expenses - consolidated income statements | $ 8,830 | $ 6,737 | $ 26,091 | $ 21,506 | |||||||||||
Remove: | |||||||||||||||
Interest expense | (116) | (103) | (331) | (309) | |||||||||||
Variable costs (1) | (4,547) | (3,491) | (14,205) | (11,595) | |||||||||||
Significant items - benefit (charge) (2) | (296) | - | (399) | - | |||||||||||
Fixed costs | $ 3,871 | $ 3,143 | $ 11,156 | $ 9,602 | |||||||||||
Consolidated net sales | $ 9,238 | $ 7,001 | $ 29,536 | $ 24,101 | |||||||||||
Fixed costs as a percent of consolidated net sales | 41.9% | 44.9% | 37.8% | 39.8% | |||||||||||
(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 | Nine Months Ended | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Subsidiary/Affiliate Monetary Position Gain (Loss) | |||||||||||||
Pre-tax exchange gains (losses) (includes equity affiliates) | $ (228) | $ 283 | $ 57 | $ (125) | |||||||||
Local tax benefits (expenses) | 35 | 3 | 31 | (19) | |||||||||
Net after-tax impact from subsidiary exchange gains (losses) | $ (193) | $ 286 | $ 88 | $ (144) | |||||||||
Hedging Program Gain (Loss) | |||||||||||||
Pre-tax exchange gains (losses) | $ 222 | $ (443) | $ (202) | $ 100 | |||||||||
Tax benefits (expenses) | (76) | 154 | 70 | (35) | |||||||||
Net after-tax impact from hedging program exchange gains (losses) | $ 146 | $ (289) | $ (132) | $ 65 | |||||||||
Total Exchange Gain (Loss) | |||||||||||||
Pre-tax exchange gains (losses) | $ (6) | $ (160) | $ (145) | $ (25) | |||||||||
Tax benefits (expenses) | (41) | 157 | 101 | (54) | |||||||||
Net after-tax exchange gains (losses) | $ (47) | $ (3) | $ (44) | $ (79) | |||||||||
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 | Nine Months Ended | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Income before income taxes | $ 569 | $ 330 | $ 3,860 | $ 3,485 | |||||||||
Add: Significant items - (benefit) charge (1) | 296 | - | 399 | (59) | |||||||||
Less: Net exchange gains (losses) | (6) | (160) | (145) | (25) | |||||||||
Income before income taxes, significant items and exchange gains/losses | $ 871 | $ 490 | $ 4,404 | $ 3,451 | |||||||||
Provision for (benefit from) income taxes | $ 109 | $ (39) | $ 727 | $ 811 | |||||||||
Add: Tax benefit (expenses) on significant items | 93 | - | 115 | 28 | |||||||||
Tax benefits (expenses) on exchange gains/losses | (41) | 157 | 101 | (54) | |||||||||
Provision for income taxes, excluding taxes on significant items | $ 161 | $ 118 | $ 943 | $ 785 | |||||||||
Effective income tax rate | 19.2% | (11.8)% | 18.8% | 23.3% | |||||||||
Significant items effect | 4.2% | - | 1.0% | 1.2% | |||||||||
Tax rate before significant items | 23.4% | (11.8)% | 19.8% | 24.5% | |||||||||
Exchange gains (losses) effect | (4.9)% | 35.9% | 1.6% | (1.8)% | |||||||||
Base income tax rate | 18.5% | 24.1% | 21.4% | 22.7% | |||||||||
(1) See Schedule B for detail of significant items. | |||||||||||||
SOURCE DuPont
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