DuPont Reports 1Q 2013 Operating EPS of $1.56 Agriculture Segment Achieves Record Operating Earnings, Company Raises Dividend

WILMINGTON, Del., April 23, 2013 /PRNewswire/ -- DuPont (NYSE: DD) today announced first quarter 2013 operating earnings per share (EPS) of $1.56 versus prior year earnings of $1.64.  GAAP1 EPS from continuing operations was $1.47 versus $1.48 in the prior year.  Primary drivers of results for the quarter were record Agriculture operating earnings offset by an expected decline in Performance Chemicals.  DuPont reaffirmed its full year 2013 EPS outlook and today announced a 5 percent dividend increase.

1Q 2013 Highlights


- Sales of $10.4 billion were up 2 percent, reflecting volume growth.  A one percent increase in local prices
   was offset by currency impact.


- Record Agriculture operating earnings of $1.5 billion were up 13 percent.  Sales increased 14 percent
  driven by strong volume growth, particularly in North America and Latin America, and higher pricing
  from new seed and crop protection products.


- Total segment operating earnings of $2.3 billion were down 8 percent, largely due to a $320 million decline
  (about $.26 EPS) in Performance Chemicals from last year's high levels.


- The company completed the sale of the Performance Coatings segment, executed a $1 billion share 
  buyback and reduced its net debt.  


- Cost productivity gains and restructuring savings are on track to meet or exceed full year targets.


- The company reaffirms its outlook for full-year 2013 operating earnings of $3.85-$4.05 per share, an
  increase of 2-7 percent from $3.77 per share earned in 2012.

"The first quarter finished as expected, with the strong Agriculture performance and Performance Chemicals' decline from peak levels last year," said DuPont Chair and CEO Ellen Kullman. "Our strategies for growth and improved return on capital are working as we continue to focus on delivering science-powered innovation and industry-leading productivity improvement.  We remain committed to delivering value to our shareholders as demonstrated by executing our share buyback, strengthening our balance sheet and increasing our dividend."

Global Consolidated Sales – 1st Quarter
First quarter 2013 sales were $10.4 billion, up 2 percent versus last year, with 2 percent higher volume.  Negative currency impact offset higher local selling prices.  Volume was primarily driven by increases for Agriculture in North America and Latin America.  The table below shows first quarter regional sales and variances versus first quarter 2012.



Three Months Ended
March 31, 2013


Percentage Change Due to:

(Dollars in millions)


$


% Change


Local
Price


Currency
Effect


Volume

U.S. & Canada


$   4,848


8


4


-


4

EMEA*


2,727


(1)


1


(1)


(1)

Asia Pacific


1,754


(8)


(6)


(2)


-

Latin America


1,079


4


4


(4)


4























Total Consolidated Sales


$ 10,408


2


1


(1)


2























* Europe, Middle East & Africa









Segment Sales – 1st Quarter
The table below shows first quarter 2013 segment sales with related variances versus the prior year.

SEGMENT SALES

Three Months Ended


Percentage Change 

(Dollars in millions)

March 31, 2013

Due to:


$


% Change


USD
Price


Volume


Portfolio/
Other

Agriculture

$     4,669


14


6


8


-

Electronics & Communications 

616


(9)


(3)


(6)


-

Industrial Biosciences

289


-


1


(1)


-

Nutrition & Health

868


7


5


4


(2)

Performance Chemicals

1,585


(17)


(11)


(6)


-

Performance Materials

1,559


(3)


(3)


1


(1)

Safety & Protection

907


(4)


(2)


(2)


-

Other

1


 nm 







Total segment sales

10,494









Elimination of transfers

(86)









Consolidated net sales

$   10,408









 

Operating Earnings – 1st Quarter








 Change vs. 2012 

(Dollars in millions)


1Q13


1Q12


$


%

Agriculture 


$    1,516


$   1,338


$       178


13%

Electronics & Communications


49


59


(10)


-17%

Industrial Biosciences


41


39


2


5%

Nutrition & Health


76


79


(3)


-4%

Performance Chemicals


251


571


(320)


-56%

Performance Materials


292


277


15


5%

Safety & Protection


138


159


(21)


-13%

Other


(91)


(76)


(15)


nm



2,272


2,446


(174)


-7%

Pharmaceuticals 


4


27


(23)


-85%

Total segment operating earnings (1)


2,276


2,473


(197)


-8%










Corporate expenses


(214)


(251)


37


-15%

Interest expense


(117)


(114)


(3)


3%

Operating earnings before income taxes and exchange gains/losses


1,945


2,108


(163)


-8%

Provision for income taxes on operating earnings, excluding taxes
      on exchange gains/losses


(456)


(505)


49


nm

Net after-tax exchange gains (losses) (2)


(23)


(44)


21


nm

Net income attributable to noncontrolling interests


(7)


(12)


5


nm

Operating earnings  


$    1,459


$   1,547


$       (88)


-6%










Operating earnings per share


$      1.56


$     1.64


$    (0.08)


-5%










(1)  See Schedules B and C for listing of significant items and their impact by segment.  



(2)  See Schedule D for additional information on exchange gains and losses.



 

The following is a summary of business results for each of the company's reportable segments in the first quarter comparing current period with the prior year.  References to selling price are on a U.S. dollar basis, including the impact of currency.

Agriculture – Operating earnings of $1.5 billion improved 13 percent on higher volume and price, partially offset by higher seed input costs which pressured margin slightly.  Earnings improvement was driven by a 14 percent increase in sales reflecting strong corn seed sales in North America and Brazil and strong Crop Protection volumes in North America and Latin America.

Electronics & Communications – Operating earnings of $49 million declined $10 million driven largely by lower sales in photovoltaic markets, as share gains were more than offset by lower usage of materials per photovoltaic module.

Industrial Biosciences – Operating earnings of $41 million were up 5 percent on higher demand and lower input costs for Sorona® polymer for carpeting and growth in food enzymes, partially offset by lower enzyme demand for ethanol production.   

Nutrition & Health Operating earnings of $76 million decreased $3 million.  Pricing gains, strong demand for probiotics and specialty protein solution and the realization of integration synergies were offset by higher raw material costs, primarily in enablers.

Performance Chemicals – Operating earnings of $251 million were $320 million lower, due primarily to substantial price declines in the titanium dioxide market and weak demand for fluoropolymers, particularly in North America and Asia Pacific.  Titanium dioxide volume was essentially flat year-over-year, but increased 8 percent from fourth quarter 2012.

Performance Materials – Operating earnings of $292 million increased 5 percent due primarily to lower feedstock costs and higher sales volume in packaging markets, partially offset by weak demand in the European automotive market and continued softness in the industrial and electronics markets.

Safety & Protection – Operating earnings of $138 million decreased $21 million reflecting a weaker sales mix, as well as lower plant utilization.  Lower sales primarily reflect significantly reduced demand for military protection products and continued softness in certain industrial markets.    

Additional information is available on the DuPont Investor Center website at http://www.investors.dupont.com.

Outlook 
The company reaffirms its outlook for full-year 2013 operating earnings of $3.85-$4.05 per share, an increase of 2-7 percent from $3.77 per share earned in 2012, based on continued strong growth in Agriculture and anticipated overall improvement in global industrial market demand.  For first-half 2013, the company expects operating earnings per share to be about 7-9 percent lower than the first half of 2012, primarily reflecting, as in the first quarter, lower Performance Chemicals earnings from peak levels in the prior year. 

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 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 A, 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," "anticipates" 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.

4/23/13 

1Generally Accepted Accounting Principles (GAAP)

 

 

 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,





2013


2012



Net sales


$         10,408


$          10,180



Other income, net 


92


14



Total


10,500


10,194










Cost of goods sold and other operating charges (a)


7,105


6,816



Selling, general and administrative expenses


983


955



Research and development expense 


521


508



Interest expense 


117


114



Total


8,726


8,393










Income from continuing operations before income taxes


1,774


1,801



Provision for income taxes on continuing operations (a)


387


392



Income from continuing operations after income taxes


1,387


1,409



Net income from discontinued operations after taxes


1,968


95










Net income 


3,355


1,504










Less:  Net income attributable to noncontrolling interests


7


12










Net income attributable to DuPont   


$           3,348


$            1,492










Basic earnings per share of common stock (b):







Basic earnings per share of common stock from continuing operations


$             1.48


$              1.49



Basic earnings per share of common stock from discontinued operations


2.12


0.10



Basic earnings per share of common stock


$             3.60


$              1.60










Diluted earnings per share of common stock (b):







Diluted earnings per share of common stock from continuing operations


$             1.47


$              1.48



Diluted earnings per share of common stock from discontinued operations


2.10


0.10



Diluted earnings per share of common stock


$             3.58


$              1.58

















Dividends per share of common stock   


$             0.43


$              0.41










 Average number of shares outstanding used in earnings per share (EPS) calculation:







  Basic


928,348,000


933,910,000



  Diluted


935,390,000


944,238,000










(a) See Schedule B for detail of significant items.







(b) The sum of the individual earnings per share amounts may not equal the total due to rounding.













Reconciliation of Non-GAAP Measures














Summary of Earnings Comparison









Three Months Ended
March 31,



2013


2012


%
Change

Income from continuing operations after income taxes (GAAP)


$           1,387


$            1,409


-2%

Less:  Significant items benefit (charge) included in income from







continuing operations after income taxes (per Schedule B)


20


(32)



Non-operating pension/OPEB costs included in income from 







continuing operations after income taxes 


(99)


(118)



Net income attributable to noncontrolling interest


7


12



Operating earnings 


$           1,459


$            1,547


-6%








EPS from continuing operations (GAAP)


$             1.47


$              1.48


-1%

Significant items benefit (charge) included in EPS (per Schedule B)


0.02


(0.04)



Non-operating pension/OPEB costs included in EPS


(0.11)


(0.12)



Operating EPS

$             1.56


$              1.64


-5%

 

 

 

 E. I. du Pont de Nemours and Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share amounts)


SCHEDULE A (continued)





March 31,
2013


December 31,
2012

Assets





Current assets





Cash and cash equivalents


$           6,555


$           4,284

Marketable securities


26


123

Accounts and notes receivable, net 


7,950


5,452

Inventories 


6,916


7,565

Prepaid expenses


268


204

Deferred income taxes 


699


613

Assets held for sale


-


3,076

Total current assets


22,414


21,317

Property, plant and equipment, net of accumulated depreciation
   (March 31, 2013 - $19,233; December 31, 2012 - $19,085)


12,590


12,741

Goodwill


4,543


4,616

Other intangible assets 


4,970


5,126

Investment in affiliates


1,169


1,163

Deferred income taxes 


3,957


3,936

Other assets


921


960

Total


$         50,564


$         49,859






Liabilities and Equity





Current liabilities





Accounts payable


$           3,957


$           4,853

Short-term borrowings and capital lease obligations 


2,006


1,275

Income taxes 


945


343

Other accrued liabilities


4,615


5,997

Liabilities related to assets held for sale


-


1,084

Total current liabilities


11,523


13,552

Long-term borrowings and capital lease obligations 


11,279


10,465

Other liabilities


14,526


14,687

Deferred income taxes


921


856

Total liabilities


38,249


39,560






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, 2013 - 1,007,234,000; December 31, 2012 - 1,020,057,000


302


306

Additional paid-in capital


10,394


10,655

Reinvested earnings


16,709


14,383

Accumulated other comprehensive loss 


(8,662)


(8,646)

Common stock held in treasury, at cost (87,041,000 shares
   at March 31, 2013 and December 31, 2012)


(6,727)


(6,727)

Total DuPont stockholders' equity


12,253


10,208

Noncontrolling interests


62


91

Total equity


12,315


10,299

Total


$         50,564


$         49,859

 

 

 

E. I. du Pont de Nemours and Company

Condensed Consolidated Statement of Cash Flows

(Dollars in millions)


SCHEDULE A (continued)



Three Months Ended
March 31,

Total Company

2013


2012





Net income

$          3,355


$          1,504

Adjustments to reconcile net income to cash used for operating activities:




Depreciation

327


349

Amortization

106


106

Other noncash charges and credits - net

(23)


311

Gain on sale of business

(2,683)


-

Contributions to pension plans

(110)


(614)

Change in operating assets and liabilities - net

(3,639)


(3,533)

Cash provided by (used for) operating activities

$        (2,667)


$        (1,877)





Investing activities




Purchases of property, plant and equipment

(321)


(301)

Proceeds from sale of business

4,815


-

Net (increase) decrease in short-term financial instruments

99


248

Forward exchange contract settlements

(47)


(87)

Other investing activities - net

62


(16)

Cash provided by (used for) investing activities

4,608


(156)





Financing activities




Dividends paid to stockholders

(405)


(386)

Net increase (decrease) in borrowings

1,558


2,278

Prepayment for the repurchase of common stock

(1,000)


(400)

Proceeds from exercise of stock options

117


389

Other financing activities - net

61


(36)

Cash provided by (used for) financing activities

331


1,845





Effect of exchange rate changes on cash

(96)


12





Increase (decrease) in cash and cash equivalents

2,176


(176)





Cash and cash equivalents at beginning of period

4,379


3,586





Cash and cash equivalents at end of period

$          6,555


$          3,410









Reconciliation of Non-GAAP Measure








Calculation of Free Cash Flow - Total Company





Three Months Ended
March 31,



2013


2012

Cash provided by (used for) operating activities

$        (2,667)


$        (1,877)

Purchases of property, plant and equipment

(321)


(301)

Free cash flow

$        (2,988)


$        (2,178)