2014

DuPont Reports Third Quarter 2012 Results Launches Targeted Restructuring Plan to Accelerate Productivity, Competitiveness and Growth

WILMINGTON, Del., Oct. 23, 2012 /PRNewswire/ -- 

  • Third-quarter 2012 earnings from continuing operations, excluding significant items, were $.32 per share versus $.60 per share in the prior year (see Schedule B.)  Current quarter reported earnings (losses) from continuing operations were $(.05) per share versus $.39 per share in the prior year.
  • Total company third-quarter 2012 earnings, excluding significant items, were $.44 per share versus $.69 per share in the prior year.  Total company reported earnings were $.01 per share versus $.48 per share in the prior year (see Schedule D.)
  • The company's Performance Coatings business, now pending divestiture, has been reclassified and reported as discontinued operations for all periods presented.
  • Third-quarter sales from continuing operations were $7.4 billion or 9 percent below last year, primarily reflecting volume declines in Electronics & Communications and Performance Chemicals, particularly in Asia Pacific.  Company sales reflect 5 percent lower volume, 4 percent negative currency impact and a 1 percent net reduction from portfolio changes, which were partly offset by 1 percent higher local prices.  
  • Agriculture sales increased 4 percent on higher volume and prices, inclusive of a 10 percent currency headwind.  Performance Materials and Nutrition & Health delivered strong earnings growth in the quarter.
  • The company has commenced a restructuring plan to increase productivity, enhance competitiveness and accelerate growth.  The plan will deliver pre-tax cost savings of about $450 million ($300 million in 2013) by eliminating corporate costs supporting Performance Coatings and taking additional cost-cutting actions to improve competitiveness.  The restructuring plan includes eliminating about 1,500 positions globally in the next 12-18 months.  In addition, the company remains on track to achieve its full-year 2012 productivity targets for both fixed costs and working capital. 
  • DuPont expects its full-year 2012 earnings from continuing operations, excluding significant items, to be in a range of $3.25 to $3.30 per share.  Prior-year earnings were $3.55 per share on a comparable basis.

"Today, we are taking additional actions to improve competitiveness and accelerate market-driven innovation and growth by fine-tuning the organization, eliminating costs and expanding beyond our everyday focus on productivity," said DuPont Chair and CEO Ellen Kullman. "We continue to execute well in many parts of the company, and certain segments are outperforming despite market volatility.  Weaker than expected demand in titanium dioxide and photovoltaic markets contributed to the decline from last year's record third-quarter earnings.  We are addressing these challenges now to position ourselves for improved performance."

Results from Continuing Operations

Third-quarter 2012 consolidated net sales of $7.4 billion were 9 percent lower than the prior year reflecting 5 percent lower volume, 4 percent negative currency impact and a 1 percent net reduction from portfolio changes, partly offset by 1 percent higher local prices.  The table below shows regional sales and variances versus the third quarter 2011.



Three Months Ended
September 30, 2012


Percentage Change Due to:

(Dollars in billions)


$


%
Change


Local
Price


Currency
Effect


Volume


Portfolio
/Other

U.S. & Canada


$     2.5


(4)


2


-


(2)


(4)

EMEA*


1.6


(15)


1


(11)


(6)


1

Asia Pacific


1.9


(15)


(5)


(1)


(10)


1

Latin America


1.4


(1)


5


(8)


2


-














Total Consolidated Sales


$     7.4


(9)


1


(4)


(5)


(1)



























* Europe, Middle East & Africa











Third-quarter 2012 income from continuing operations was a loss of $40 million versus income of $376 million in 2011. Excluding significant items, income from continuing operations was $302 million down $277 million, or 48 percent, from $579 million in the third quarter 2011. 

Earnings Per Share

The table below shows year-over-year earnings per share (EPS) variances for continuing operations, excluding significant items, for the third quarter.





EPS ANALYSIS-Continuing Operations







3Q






EPS 2011


$.39


Less: Significant items (schedule B)           


(.21)


EPS 2011 – Excluding significant items


$.60


 

Local prices


 

.05


Variable cost*


.17


Volume


(.15)


Fixed cost*


(.08)


Currency


(.13)


Exchange losses


(.02)


    Income tax


(.05)


    Pharmaceuticals income


(.05)


    Other                                                               


(.02)






EPS 2012 – Excluding significant items  


$.32


 Significant items - (schedule B)


(.37)


EPS 2012


$(.05)










*   Excluding volume and currency impacts


Business Segment Performance

The table below shows third quarter 2012 segment sales and related variances versus the prior year.

SEGMENT SALES*

Three Months Ended


Percentage Change 

(Dollars in billions)

September 30, 2012

Due to:


$


% Change


USD Price


Volume


Portfolio and Other

Agriculture

$      1.4


4


(3)


7


0

Electronics & Communications 

0.6


(28)


(8)


(20)


0

Industrial Biosciences

0.3


0


(7)


7


0

Nutrition & Health

0.9


4


0


4


0

Performance Chemicals

1.7


(19)


(1)


(18)


0

Performance Materials

1.6


(8)


(7)


2


(3)

Safety & Protection

0.9


(7)


(4)


(3)


0

Segment pre-tax operating income (PTOI) from continuing operations for third quarter 2012 was $356 million compared to third quarter 2011 PTOI of $778 million.   Excluding significant items, PTOI was $816 million, down 24 percent from $1,071 million in the prior year, as shown in the table below.

SEGMENT PTOI excluding Significant Items*




Change versus 2011

(Dollars in millions)


3Q 2012


3Q 2011


$


%










Agriculture


$     (85)


$     (69)


$     (16)


-23%

Electronics & Communications


40


99


(59)


-60%

Industrial Biosciences


42


34


8


24%

Nutrition & Health


87


55


32


58%

Performance Chemicals


372


593


(221)


-37%

Performance Materials


306


231


75


32%

Safety & Protection


103


118


(15)


-13%

Other


(59)


(60)


1


2%



$     806


$  1,001


$   (195)


-19%

Pharmaceuticals


10


70


(60)


-86%

Total Segment PTOI


$     816


$  1,071


$   (255)


-24%

* 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 2012 with third quarter 2011, for sales and PTOI (loss), excluding significant items.  References to price are on a U.S. dollar basis, including the impact of currency.

Agriculture – Sales of $1.4 billion were up 4 percent on 7 percent higher volume partially offset by 3 percent lower prices inclusive of a 10 percent currency headwind.  For Pioneer seed, volume growth reflects a strong start to the Southern Hemisphere planting season.  Higher local prices for both corn and soybeans were partially offset by the impact of unfavorable currency.  Crop Protection sales growth was underpinned by strong demand for insect control products and fungicides; while higher local prices across all market segments were more than offset by unfavorable currency.  PTOI seasonal loss was ($85) million versus ($69) million in the prior year as strong sales were more than offset by unfavorable currency, higher input costs in seeds and higher investments in commercial and R&D activities to support growth.

Electronics & Communications – Sales of $607 million were down 28 percent on 20 percent lower volume and 8 percent lower prices, primarily pass-through of lower metals prices.  Volume declined in photovoltaic materials, partially offset by continued strong demand for materials in smart phones and tablets.  PTOI of $40 million declined $59 million from lower volume.   

Industrial Biosciences – Sales of $292 million were flat compared to prior year as higher volume was offset by lower prices, primarily related to unfavorable currency.  Volume growth reflects strong biomaterial sales into carpeting, as well as continued growth in animal nutrition and food enzymes.  PTOI of $42 million was up $8 million on higher volume and the realization of cost synergies related to the integration of the Danisco enzyme business.

Nutrition & Health Sales of $876 million were up 4 percent on higher volume, reflecting strong demand for specialty food ingredients and Solae soy specialties.  Higher local prices were offset by unfavorable currency.  PTOI of $87 million was up $32 million on higher local selling prices, higher volume and the realization of cost synergies related to the integration of the Danisco specialty food ingredients business.

Performance Chemicals – Sales of $1.7 billion were down 19 percent, with 18 percent lower volume and 1 percent lower prices against a quarter with record titanium dioxide volume.  Sales declined on lower demand for titanium dioxide and fluoropolymers.  Volumes were pressured by softness in Europe and Asia Pacific primarily due to lower infrastructure spend and weak construction markets.  PTOI of $372 million decreased $221 million on lower volume.

Performance Materials – Sales of $1.6 billion were down 8 percent, with 7 percent lower prices and a 3 percent reduction from a portfolio change, partially offset by 2 percent higher volume.  Lower prices reflect unfavorable currency and mix.  Stable packaging markets and continued strong demand in automotive were partially offset by softness in the industrial and electronics markets.  PTOI of $306 million increased $75 million due to lower feedstock costs and higher volume, partially offset by unfavorable currency. 

Safety & Protection – Sales of $934 million were down 7 percent, with 4 percent lower prices, primarily due to unfavorable currency, and 3 percent lower volume.  Volume declined due to stalled infrastructure projects in China, weaker industrial conditions in Europe and lower US public sector demand.  Trends in US housing are encouraging.  PTOI of $103 million decreased $15 million on weaker mix and unfavorable currency. 

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

Outlook 

DuPont expects its full-year 2012 earnings from continuing operations, excluding significant items, to be in a range of $3.25 to $3.30 per share.  Prior-year earnings were $3.55 per share on a comparable basis.

Update on Performance Coatings Sale

On August 30, 2012, DuPont announced that it signed a definitive agreement to sell its Performance Coatings business for $4.9 billion in cash and the assumption of $250 million of unfunded pension liabilities.  DuPont estimates that the after-tax cash proceeds will be about $4 billion.  Beginning with the third quarter results, the Performance Coatings segment has been classified as discontinued operations and is excluded from the company's continuing operations results, on a retroactive basis.  Current quarter earnings from discontinued operations were $.06 per share, which included a $.06 charge related to additional deferred tax liabilities.  Prior year earnings were $.09 per share.  Excluding the $.06 charge related to additional deferred tax liabilities, the company expects earnings from discontinued operations to be about $.41 per share for full year 2012.  The sale is expected to close in the first quarter of 2013.

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," "anticipates," "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
September 30,


Nine Months Ended
September 30,






2012


2011


2012


2011

Net sales





$            7,390


$           8,138


$         27,487


$         26,338

Other (loss) income, net(a)





(54)


165


251


404

Total





7,336


8,303


27,738


26,742













Cost of goods sold and other operating charges (a)





5,722


6,345


19,621


18,947

Selling, general and administrative expenses





772


809


2,725


2,567

Research and development expense (a)





506


546


1,520


1,383

Interest expense 





116


116


347


331

Employee separation / asset related charges, net (a)





394


36


394


36

Total





7,510


7,852


24,607


23,264













(Loss) income from continuing operations before income taxes





(174)


451


3,131


3,478

(Benefit from) provision for income taxes on continuing operations 





(134)


75


657


616

(Loss) income from continuing operations after income taxes





(40)


376


2,474


2,862

Net income from discontinued operations after taxes





53


84


227


271













Net income 





13


460


2,701


3,133













Less:  Net income attributable to noncontrolling interests





3


8


24


32













Net income attributable to DuPont   





$                 10


$              452


$           2,677


$           3,101













Basic (loss) earnings per share of common stock:












Basic (loss) earnings per share of common stock from continuing operations





$            (0.05)


$             0.39


$             2.62


$             3.04

Basic earnings per share of common stock from discontinued operations





0.06


0.09


0.24


0.29

Basic earnings per share of common stock





$              0.01


$             0.48


$             2.86


$             3.33













Diluted (loss) earnings per share of common stock:












Diluted (loss) earnings per share of common stock from continuing operations





$            (0.05)


$             0.39


$             2.59


$             2.99

Diluted earnings per share of common stock from discontinued operations





0.06


0.09


0.24


0.29

Diluted earnings per share of common stock





$              0.01


$             0.48


$             2.83


$             3.28

























Dividends per share of common stock   





$              0.43


$             0.41


$             1.27


$             1.23













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











  Basic





931,737,000


932,356,000


933,227,000


929,369,000

  Diluted





940,526,000


943,485,000


942,524,000


942,812,000

























(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,
2012


December 31,
2011


Assets






Current assets






Cash and cash equivalents


$         3,418


$         3,586


Marketable securities


105


433


Accounts and notes receivable, net 


7,879


6,022


Inventories 


6,752


7,195


Prepaid expenses


135


151


Deferred income taxes 


971


671


Assets held for sale


3,157


-


Total current assets


22,417


18,058


Property, plant and equipment, net of accumulated depreciation
   (September 30, 2012 - $18,892; December 31, 2011 - $19,349)


12,528


13,412


Goodwill


4,579


5,413


Other intangible assets 


5,145


5,413


Investment in affiliates


1,098


1,117


Deferred income taxes 


3,825


4,067


Other assets


1,015


1,012


Total


$       50,607


$       48,492








Liabilities and Equity






Current liabilities






Accounts payable


$         4,154


$         4,816


Short-term borrowings and capital lease obligations 


4,564


817


Income taxes 


644


255


Other accrued liabilities


3,831


5,297


Liabilities related to assets held for sale


1,010


-


Total current liabilities


14,203


11,185


Long-term borrowings and capital lease obligations 


10,502


11,736


Other liabilities


14,136


15,508


Deferred income taxes


1,055


1,001


Total liabilities


39,896


39,430








Commitments and contingent liabilities 












Stockholders' equity






Preferred stock


237


237


Common stock, $0.30 par value; 1,800,000,000 shares authorized;
   Issued at September 30, 2012 - 1,019,411,000; December 31, 2011 - 1,013,164,000


306


304


Additional paid-in capital


10,594


10,107


Reinvested earnings


14,581


13,422


Accumulated other comprehensive loss 


(8,385)


(8,750)


Common stock held in treasury, at cost (87,041,000 shares
   at September 30, 2012 and December 31, 2011)


(6,727)


(6,727)


Total DuPont stockholders' equity


10,606


8,593


Noncontrolling interests


105


469


Total equity


10,711


9,062


Total


$       50,607


$       48,492








 

E. I. du Pont de Nemours and Company

Condensed Consolidated Statement of Cash Flows

(Dollars in millions)





SCHEDULE A (continued)





Nine Months Ended
September 30,

Total Company

2012


2011





Cash provided by (used for) operating activities

$         (426)


$           431





Investing activities




Purchases of property, plant and equipment

(1,139)


(1,211)

Investments in affiliates

(31)


(35)

Payments for businesses (net of cash acquired)

(18)


(6,459)

Net (increase) decrease in short-term financial instruments

336


2,365

Other investing activities - net

185


(236)

Cash provided by (used for) investing activities

(667)


(5,576)





Financing activities




Dividends paid to stockholders

(1,191)


(1,152)

Net increase (decrease) in borrowings

2,524


4,503

Repurchase of common stock

(400)


(672)

Proceeds from exercise of stock options

520


833

Payments for noncontrolling interest

(447)


-

Other financing activities - net

38


52

Cash provided by (used for) financing activities

1,044


3,564





Effect of exchange rate changes on cash

(23)


68





Cash classified as held for sale

(96)


-





Increase (decrease) in cash and cash equivalents

(168)


(1,513)





Cash and cash equivalents at beginning of period

3,586


4,263





Cash and cash equivalents at end of period

$        3,418


$        2,750





 

E. I. du Pont de Nemours and Company



Schedule of Significant Items from Continuing Operations



(Dollars in millions, except per share amounts)















SCHEDULE B












SIGNIFICANT ITEMS FROM CONTINUING OPERATIONS












Pre-tax


After-tax


($ Per Share)



2012


2011


2012


2011


2012


2011

1st Quarter












Customer claims charge (a)

$    (50)


$         -


$    (32)


$         -


$    (0.04)


$            -

1st Quarter - Total

$    (50)


$         -


$    (32)


$         -


$    (0.04)


$            -

2nd Quarter












Customer claims charge (a)

$  (265)


$       -


$  (169)


$       -


$    (0.18)


$          -

Litigation settlement (b)

(137)


-


(123)


-


(0.13)


-

Gain on the sale of equity 













method investment (c)

122


-


77


-


0.08


-

Transition costs related to the













acquisition of Danisco(d)

-


(103)


-


(81)


-


(0.08)

2nd Quarter - Total

$  (280)


$  (103)


$  (215)


$    (81)


$    (0.23)


$   (0.08)

3rd Quarter












Customer claims charge (a)

$  (125)


$    (75)


$    (80)


$    (48)


$    (0.09)


$   (0.05)

Restructuring charge (e)

(152)


-


(105)


-


(0.11)


-

Asset impairment charge (f)

(242)


-


(157)


-


(0.17)


-

Transition costs and restructuring charge













related to the acquisition of Danisco (g)

-


(171)


-


(122)


-


(0.13)

Charge related to milestone payment













for licensing agreement (h)

-


(50)


-


(33)


-


(0.03)

3rd Quarter - Total

$  (519)


$  (296)


$  (342)


$  (203)


$    (0.37)


$   (0.21)














Year-to-date - Total(i)

$  (849)


$  (399)


$  (589)


$  (284)


$    (0.63)


$   (0.30)














 

E. I. du Pont de Nemours and Company

Schedule of Significant Items from Continuing Operations

(Dollars in millions, except per share amounts)


SCHEDULE B (continued)


SIGNIFICANT ITEMS FROM CONTINUING OPERATIONS


(a)

Third quarter 2012, second quarter 2012, first quarter 2012 and third quarter 2011 included charges of $125, $265, $50 and $75, respectively, recorded in Cost of goods sold and other operating charges associated with the company's process to fairly resolve claims related to the use of Imprelis® herbicide, bringing the total charges to $615 at September 30, 2012.  The company will continue to evaluate reported claim damage as additional information becomes available. It is reasonably possible that additional charges could result from this evaluation. While there is a high degree of uncertainty, total charges could range as high as $700. The company has submitted, and will continue to submit, requests for payment to its insurance carriers for costs associated with this matter in excess of $100.  This matter relates to the Agriculture segment.



(b)

Second quarter 2012 included a charge of $137 recorded in Cost of goods sold and other operating charges primarily related to the company's settlement of litigation with Invista.  This matter relates to Other.  



(c)

Second quarter 2012 included a pre-tax gain of $122 recorded in Other income, net associated with the sale of an equity method investment in the Electronics & Communications segment.



(d)

Second quarter 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).



(e)

Third quarter 2012 included a $152 restructuring charge recorded in Employee separation/asset related charges, net consisting of $133 of severance and related benefit costs and $19 of asset related charges as a result of the company's plan to eliminate corporate costs previously allocated to Performance Coatings and cost-cutting actions to improve competitiveness.  Pre-tax charges by segment were: Agriculture - $(3), Nutrition & Health - $(13), Electronics & Communications - $(7), Performance Chemicals - $(3), Performance Materials - $(9), Safety & Protection - $(55), Industrial Biosciences - $(3), and Corporate expenses - $(59).



(f)

Third quarter 2012 included a $242 impairment charge recorded in Employee separation/asset related charges, net related to asset groupings within the Electronics & Communications and Performance Materials segments. The charge of $150 within Electronics & Communications was a result of conditions within the thin film photovoltaic market. The charge of $92 within Performance Materials was the result of deteriorating conditions in an industrial polymer market.



(g)

Third quarter 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).



(h)

Third quarter 2011 included a ($50) charge recorded in Research and development expense in connection with a milestone payment associated with a Pioneer licensing agreement.



(i)

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
September 30,


Nine Months Ended
September 30,

SEGMENT SALES (1)


2012


2011


2012


2011

Agriculture


$  1,423


$  1,368


$   8,891


$   7,869

Electronics & Communications


607


841


2,079


2,543

Industrial Biosciences


292


293


880


416

Nutrition & Health


876


844


2,569


1,654

Performance Chemicals


1,732


2,142


5,600


5,934

Performance Materials


1,614


1,745


4,913


5,197

Safety & Protection


934


1,001


2,861


2,991

Other


2


2


4


39

Total Segment sales


7,480


8,236


27,797


26,643










Elimination of transfers


(90)


(98)


(310)


(305)

Consolidated net sales


$  7,390


$  8,138


$ 27,487


$ 26,338



















(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
September 30,


Nine Months Ended
September 30,

PRE-TAX OPERATING INCOME/(LOSS) (PTOI) FROM CONTINUING OPERATIONS 


2012


2011


2012


2011

Agriculture 


$   (213)


$  (194)


$  1,712


$ 1,743

Electronics & Communications


(117)


99


113


313

Industrial Biosciences


39


(27)


124


(34)

Nutrition & Health


74


(34)


269


(4)

Performance Chemicals


369


593


1,419


1,490

Performance Materials


205


231


762


773

Safety & Protection


48


118


275


406

Pharmaceuticals 


10


70


53


200

Other


(59)


(78)


(325)


(179)

Total Segment PTOI


356


778


4,402


4,708










Net exchange gains (losses) (1)


(130)


6


(161)


(132)

Corporate expenses & net interest


(400)


(333)


(1,110)


(1,098)

(Loss) income before income taxes from continuing operations  


$   (174)


$    451


$  3,131


$ 3,478





















Three Months Ended
September 30,


Nine Months Ended
September 30,

SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2)


2012


2011


2012


2011

Agriculture 


$   (128)


$  (125)


$   (443)


$  (125)

Electronics & Communications


(157)


-


(35)


-

Industrial Biosciences


(3)


(61)


(3)


(78)

Nutrition & Health


(13)


(89)


(13)


(122)

Performance Chemicals


(3)


-


(3)


-

Performance Materials


(101)


-


(101)


-

Safety & Protection


(55)


-


(55)


-

Pharmaceuticals 


-


-


-


-

Other


-


(18)


(137)


(18)

Total significant items by segment


$   (460)


$  (293)


$   (790)


$  (343)





















Three Months Ended
September 30,


Nine Months Ended
September 30,

PTOI EXCLUDING SIGNIFICANT ITEMS  


2012


2011


2012


2011

Agriculture 


$     (85)


$    (69)


$  2,155


$ 1,868

Electronics & Communications


40


99


148


313

Industrial Biosciences


42


34


127


44

Nutrition & Health


87


55


282


118

Performance Chemicals


372


593


1,422


1,490

Performance Materials


306


231


863


773

Safety & Protection


103


118


330


406

Pharmaceuticals 


10


70


53


200

Other


(59)


(60)


(188)


(161)

Total Segment PTOI excluding significant items


$     816


$ 1,071


$  5,192


$ 5,051










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

(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
September 30, 


Nine Months Ended
September 30, 








2012


2011


%
Change


2012


2011


%
Change



















Segment PTOI







$               356


$               778


-54%


$           4,402


$           4,708


-6%

Significant items (benefit) charge included in PTOI (per Schedule C)


460


293




790


343



Segment PTOI excluding significant items


$               816


$            1,071


-24%


$           5,192


$           5,051


3%



















(Loss) income from continuing operations after income taxes



$               (40)


$               376


-111%


$           2,474


$           2,862


-14%

Significant items (benefit) charge included in income from













continuing operations after income taxes (per Schedule B)



342


203




589


284



Income from continuing operations after income taxes, excluding significant items


$               302


$               579


-48%


$           3,063


$           3,146


-3%



















EPS from continuing operations







$            (0.05)


$              0.39


-113%


$             2.59


$             2.99


-13%

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


0.37


0.21




0.63


0.30



EPS from continuing operations, excluding significant items



$              0.32


$              0.60


-47%


$             3.22


$             3.29


-2%



















Net income from discontinued operations after taxes



$                 53


$                 84


-37%


$              227


$              271


-16%

Significant item charge related to taxes on certain unremitted Performance Coatings 













earnings included in net income from discontinued operations after taxes



62


-




62


-



Net income from discontinued operations after taxes, excluding significant item


$               115


$                 84


37%


$              289


$              271


7%



















EPS from discontinued operations






$              0.06


$              0.09


-33%


$             0.24


$             0.29


-17%

Significant item charge related to taxes on certain unremitted Performance Coatings













 earnings included in EPS



0.06


-




0.06


-



EPS from discontinued operations, excluding significant item



$              0.12


$              0.09


33%


$             0.30


$             0.29


3%



















EPS from total company







$              0.01


$              0.48


-98%


$             2.83


$             3.28


-14%

Significant items (benefit) charge included in EPS 


0.43


0.21




0.69


0.30



EPS from total company, excluding significant items



$              0.44


$              0.69


-37%


$             3.52


$             3.58


-2%



















Average number of diluted shares outstanding



940,526,000


943,485,000


-0.3%


942,524,000


942,812,000


0.0%























































Reconciliation of Earnings Per Share (EPS) Outlook





















Year Ended December 31,
















2012 Outlook


2011 Actual









EPS from continuing operations - excluding significant items



$3.25 - $3.30   


$              3.55



























Sale of an equity method investment






0.08


-









Danisco acquisition related costs







-


(0.22)









Customer claims charges







(0.30)


(0.12)









Charges related to a licensing agreement





-


(0.03)









Sale of a business







-


0.13









Restructuring charge/adjustments







(0.11)


(0.01)









Litigation settlement







(0.13)


-









Asset impairment charge







(0.17)


-









4Q 2012 sale of assets - estimate







0.08


-









Reported EPS from continuing operations





$2.70 - $2.75   


$              3.30



























EPS from discontinued operations - excluding significant items



About   $0.41   


$              0.38









Charge related to taxes on certain unremitted Performance Coatings earnings



(0.06)


-









Reported EPS from discontinued operations





About   $0.35   


$              0.38



























 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions)
















SCHEDULE D



























Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements


























Three Months Ended
September 30,


Nine Months Ended
September 30,









2012


2011


2012


2011
















(Loss) income from continuing operations before income taxes


$         (174)


$           451


$        3,131


$        3,478

Less: Net income attributable to noncontrolling interests


3


8


24


32

Add:  Interest expense 


116


116


347


331

Adjusted EBIT from continuing operations


(61)


559


3,454


3,777

Add: Depreciation and amortization 


393


367


1,237


1,058

Adjusted EBITDA from continuing operations


$           332


$           926


$        4,691


$        4,835














































Calculation of Free Cash Flow - Total Company

























Nine Months Ended
September 30,

























2012


2011





Cash provided by (used for) operating activities


$         (426)


$           431





Less: Purchases of property, plant and equipment


1,139


1,211





Free cash flow


$      (1,565)


$         (780)





 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions)


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 and the related tax impact is recorded in Provision for (benefit from) income taxes on the Consolidated Income Statements. 





















Three Months Ended September 30,


Nine Months Ended
September 30,







2012


2011


2012


2011

Subsidiary/Affiliate Monetary Position Gain (Loss)













Pre-tax exchange gains (losses) (includes equity affiliates)






$       91


$    (216)


$     (50)


$        70

Local tax benefits (expenses)






(6)


34


10


31

Net after-tax impact from subsidiary exchange gains (losses)






$       85


$    (182)


$     (40)


$      101














Hedging Program Gain (Loss)













Pre-tax exchange gains (losses)






$   (221)


$      222


$   (111)


$    (202)

Tax benefits (expenses)






77


(76)


38


70

Net after-tax impact from hedging program exchange gains (losses)






$   (144)


$      146


$     (73)


$    (132)














Total Exchange Gain (Loss)













Pre-tax exchange gains (losses)






$   (130)


$           6


$   (161)


$    (132)

Tax benefits (expenses)






71


(42)


48


101

Net after-tax exchange gains (losses) (1)






$     (59)


$      (36)


$   (113)


$      (31)















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 above Net after-tax exchange gains (losses) excludes gains (losses) attributable to discontinued operations of $9 and $(11) for the three months ended September 30, 2012 and 2011, respectively, and $(11) and $(12) for the nine months ended September 30, 2012 and 2011, respectively.


Reconciliation of Base Income Tax Rate to Effective Income Tax Rate

Base income tax rate is defined as the effective income tax rate less the effect of exchange gains/losses, as defined above, and significant items. 




















Three Months Ended September 30,


Nine Months Ended
September 30,







2012


2011


2012


2011














(Loss) income from continuing operations before income taxes 


$   (174)


$      451


$  3,131


$   3,478

Add:  Significant items - (benefit) charge(1)


519


296


849


399

Less:  Net exchange (losses) gains


(130)


6


(161)


(132)

Income from continuing operations before income taxes, significant items and exchange 









gains/losses


$     475


$      741


$  4,141


$   4,009














(Benefit from) provision for  income taxes on continuing operations


$   (134)


$        75


$     657


$      616

Add:  Tax benefit (expenses) on significant items


177


93


260


115

          Tax benefits (expenses) on exchange gains/losses


71


(42)


48


101

Provision for income taxes on continuing operations, excluding taxes on significant items
      and exchange gains/losses


$     114


$      126


$     965


$      832














Effective income tax rate


77.0%


16.6%


21.0%


17.7%

Significant items effect


(64.5%)


5.9%


2.0%


1.2%

Tax rate, from continuing operations, before significant items


12.5%


22.5%


23.0%


18.9%

Exchange gains (losses) effect


11.5%


(5.5%)


0.3%


1.9%

Base income tax rate from continuing operations


24.0%


17.0%


23.3%


20.8%



























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

 

SOURCE DuPont



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