DuPont Reports Fourth Quarter 2009 EPS of $.48; Increases 2010 Guidance

Results Reflect Improving Volumes in all Regions

Jan 26, 2010, 06:00 ET from DuPont

WILMINGTON, Del., Jan. 26 /PRNewswire-FirstCall/ --

Highlights:

  • DuPont's fourth-quarter 2009 earnings were $.48 per share, compared to a fourth-quarter 2008 loss of $.70 per share.  Excluding significant items, fourth-quarter 2009 earnings were $.44 per share versus a $.28 per share loss in the prior year (see Schedule B.)  
  • Sales of $6.4 billion were up 10 percent versus prior year, led by sales growth greater than 20 percent for titanium dioxide, electronic materials, performance polymers and seed products.
  • Volume grew 10 percent, with increases in all regions.  Asia Pacific sales exceeded pre-recession levels with volume up 34 percent versus prior year, reflecting very strong demand in China, Japan, Korea and India.
  • Raw material, energy and freight costs for the fourth-quarter were about 20 percent lower after adjusting for currency and volume.
  • The company exceeded its full-year goal to deliver $1 billion of fixed cost reductions and productivity actions.
  • Full-year 2009 earnings were $1.92 per share versus $2.20 in 2008.  Excluding significant items, 2009 earnings were $2.03 per share versus $2.78 in the prior year.
  • Full-year free cash flow of $3.4 billion achieved the company's goal, reflecting capital productivity and favorable currency impact.
  • DuPont increased its full-year 2010 earnings guidance to a range of $2.15 to $2.45 per share.  The previous guidance was $2.10 to $2.40 per share.

"Across the organization, DuPont delivered on its commitments in 2009," said DuPont (NYSE: DD) Chair and CEO Ellen Kullman.  "We intend to emerge stronger in 2010 by building on the work we accomplished last year, with a focus on sales growth through market-driven innovation and operating leverage.  We remain committed to compound annual growth targets of 10 percent for top-line and 20 percent for earnings through 2012."

Global Consolidated Sales and Net Income

Fourth-quarter 2009 consolidated net sales of $6.4 billion were 10 percent higher than prior year, reflecting 10 percent higher volume, 3 percent lower local prices, a 4 percent positive impact from currency exchange rates and a 1 percent reduction from portfolio changes.  The table below shows regional sales and variances versus fourth-quarter 2008.

(dollars in billions)

$

% Change

Local Currency Price

Currency Effect

Volume

Portfolio/Other

U.S.

$  1.9

(2)  

(5)  

-   

4   

(1)  

EMEA*

1.8

6   

(1)  

6   

1   

-   

Asia Pacific

1.6

36   

(3)  

5   

34   

-   

Canada & Lat. America

1.1

12   

(5)  

8   

9   

-   

Total Consolidated Sales

$  6.4

10   

(3)  

4   

10   

(1)  

* Europe, Middle East & Africa

Net income attributable to DuPont for the fourth-quarter 2009 was $441 million versus a $629 million loss in the prior year.  Net income excluding significant items was $402 million versus a $249 million loss in the prior year.  The improvement reflects significantly higher sales volume, lower variable cost and currency benefit.    

Earnings Per Share

The table below shows year-over-year earnings per share (EPS) variances for the fourth-quarter.  

EPS  ANALYSIS

4Q

EPS - 2008

$(.70)

  Less: Significant items (Schedule B)

(.42)

EPS - 2008 Excluding significant items

$(.28)

Local prices

(.15)

Variable costs*

.51

Volume

.30

Fixed costs *

(.08)

Currency

.04

Tax

--

Exchange Gain/Loss

.06

Other**

.04

EPS – 2009 Excluding significant items

$.44

Significant Items (see Schedule B)

.04

EPS - 2009

$.48

*Excluding volume and currency impacts.

**Primarily higher equity affiliate income partly offset by a $.05 charge in Pharmaceuticals relating to the timing of rebates and other sales deductions.

Business Segment Performance

The table below shows fourth-quarter 2009 segment sales and related variances versus prior year.    

SEGMENT SALES*

Three Months Ended

Percentage Change

(Dollars in billions)

December 31, 2009

Due to:

$

% Change

USD Price

Volume

Portfolio and Other

Agriculture & Nutrition

$  1.4   

12   

3   

9   

-   

Electronics & Communications

0.6   

22   

9   

13   

-   

Performance Chemicals

1.3   

9   

(8)  

17   

-   

Performance Coatings

1.0   

8   

10   

(2)  

-   

Performance Materials

1.4   

20   

(3)  

24   

(1)  

Safety & Protection

0.8   

(9)  

-   

(9)  

-   

* Segment Sales include transfers.

Reported pre-tax operating income (PTOI) for fourth-quarter 2009 was $798 million compared to a fourth-quarter 2008 pre-tax operating loss of $595 million.  Segment PTOI (loss) excluding significant items is shown below.  

PRE-TAX OPERATING INCOME (LOSS) EXCLUDING SIGNIFICANT ITEMS*

Three Months Ended December 31

$ change

(Dollars in millions)

2009

2008

vs. 2008

Agriculture & Nutrition

$     (97)

$    (164)

$             67

Electronics & Communications

        61

         29

              32

Performance Chemicals

      208

         14

             194

Performance Coatings

        70

       (81)

             151

Performance Materials

      174

     (129)

             303

Safety & Protection

      135

         87

              48

Pharmaceuticals

      247

**

       265

             (18)

Other

       (55)

       (81)

              26

          Total Segments

$     743

$     (60)

$           803

* See Schedules B and C for a listing of significant items and their impact by segment.

** Includes a $63 million charge in other income relating to the timing of rebates and other sales deductions.

The following is a summary of business results for each of the company's reportable segments, comparing the fourth-quarter 2009 with fourth-quarter 2008, for sales and PTOI, excluding significant items.  All references to selling price changes are on a U.S. dollar basis, including the impact of currency.

Agriculture & Nutrition

Segment sales of $1.4 billion were up $143 million or 12 percent.  Volume increased 9 percent, with increases in all regions.  Selling prices were up 3 percent.  Segment volumes reflect 25 percent higher seed volume, with a strong start to the North America and European seasons, and successful summer plantings in Argentina, Brazil, and South Africa.  Seed sales were $465 million.  Crop protection product volumes increased 5 percent, reflecting increased insecticide demand in Latin America.  Food and nutrition products sales were up slightly, reflecting increased sales in North America.  Segment PTOI seasonal loss of $97 million, improved $67 million, principally due to higher seed volumes.

Electronics & Communications

Segment sales of $582 million were up 22 percent versus fourth-quarter 2008 and 2 percent above pre-recession fourth-quarter 2007.  Sales reflect 13 percent higher volumes and 9 percent higher prices (includes metals pass-through pricing) versus fourth-quarter 2008.  Seasonal demand, growth in photovoltaics and a small amount of inventory rebuilding throughout the industry contributed to a strong quarter.  PTOI of $61 million was up $32 million primarily due to significantly improved volume and mix.

Performance Chemicals

Segment sales of $1.3 billion increased $113 million, or 9 percent.  The sales increase was led by 17 percent higher volumes, partly offset by lower prices. Volume increases primarily driven by recovery in the titanium dioxide market in all regions.  Pricing decreases mostly reflected the pass-through of lower chemicals raw material costs.  PTOI was $208 million, an improvement of $194 million.  The increase primarily reflected lower raw material costs and higher volume.

Performance Coatings

Segment sales of $975 million increased $70 million, or 8 percent, principally reflecting higher selling prices.  Volumes were 2 percent lower, reflecting continued industrial market weakness in developed regions, partly offset by higher demand in automotive OEM markets.  PTOI was $70 million, up $151 million, reflecting lower raw material costs and aggressive fixed cost reductions.

Performance Materials

Segment sales of $1.4 billion increased $242 million, or 20 percent, principally reflecting 24 percent higher volumes led by improvement in automotive, industrial, consumer and electrical markets, with strong volume recovery in all regions, particularly Asia Pacific.  Segment PTOI for the quarter was $174 million, an improvement of $303 million, reflecting strong volume and variable margin expansion as lower selling prices were more than offset by the benefits of sharply lower raw material costs.  

Safety & Protection

Segment sales of $759 million decreased $75 million, or 9 percent, essentially all volume driven.  Sales into automotive and consumer markets rebounded, while industrial and law enforcement markets continued to lag.  PTOI was $135 million, an improvement of $48 million.  The increase primarily reflected lower raw material costs and fixed cost reductions, partly offset by lower volume.

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

Outlook

DuPont remains committed to its 20 percent compound annual earnings growth goal for the 2009-2012 time period and 2010 free cash flow target of greater than $1.5 billion as announced November 2009.  DuPont today increased its full-year 2010 earnings guidance to a range of $2.15 to $2.45 per share versus the previous guidance of $2.10 to $2.40 per share.  Due to strong pension fund performance, the company now expects pension expense to be about $.10 per share, lower than originally anticipated.  In addition, the company is estimating a first-quarter $.05 per share exchange loss resulting from devaluation of the Venezuelan currency.  

"In 2010, we will continue the momentum generated from last year's aggressive cost-cutting and cash-generating actions," Kullman said.  "We remain confident in our performance outlook for 2010, based on improving economic conditions coupled with well-positioned and streamlined businesses.  Each one of our business units has clear targets, our leaders understand their accountability and our teams are poised to deliver in 2010."

Use of Non-GAAP Measures

Management believes that certain non-GAAP measurements, such as free cash flow, are meaningful to investors because they provide insight with respect to ongoing operating results of the company.  Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance.  Reconciliations of non-GAAP measures to GAAP are provided in schedules C and D.

DuPont is a science-based products and services company.  Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere.  Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.

Forward-Looking Statements:  This news release contains forward-looking statements based on management's current expectations, estimates and projections.  All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements.  Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions.  These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions.  Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated.  These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; seasonality of sales of agricultural products; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

E. I. du Pont de Nemours and Company

Consolidated Income Statements

(Dollars in millions, except per share amounts)

SCHEDULE A

Three Months Ended December 31,

Year Ended December 31,

2009 

2008 

2009 

2008 

Net sales

$       6,419 

$       5,820 

$     26,109 

$     30,529 

Other income, net

395 

250 

1,219 

1,307 

Total

6,814 

6,070 

27,328 

31,836 

Cost of goods sold and other operating charges (a)

4,956 

5,250 

19,708 

23,548 

Selling, general and administrative expenses

856 

799 

3,440 

3,593 

Research and development expense

389 

343 

1,378 

1,393 

Interest expense

96 

104 

408 

376 

Employee separation / asset related charges, net (a)

(55)

535 

210 

535 

Total

6,242 

7,031 

25,144 

29,445 

Income (loss) before income taxes

572 

(961)

2,184 

2,391 

Provision for (benefit from) income taxes

127 

(325)

415 

381 

Net income (loss)

445 

(636)

1,769 

2,010 

Less:  Net income (loss) attributable to noncontrolling interests

(7)

14 

Net income (loss) attributable to DuPont

$          441 

$        (629)

$       1,755 

$       2,007 

Basic earnings (loss) per share of common stock

$         0.48 

$       (0.70)

$         1.93 

$         2.21 

Diluted earnings (loss) per share of common stock

$         0.48 

$       (0.70)

$         1.92 

$         2.20 

Dividends per share of common stock

$         0.41 

$         0.41 

$         1.64 

$         1.64 

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

 Basic

904,526,000 

903,265,000 

904,395,000 

902,415,000 

 Diluted

910,854,000 

903,265,000 

908,712,000 

907,371,000 

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

E. I. du Pont de Nemours and Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share amounts)

SCHEDULE A (continued)

December 31, 2009

December 31, 2008

Assets

Current assets

Cash and cash equivalents

$       4,021 

$       3,645 

Marketable securities

2,116 

59 

Accounts and notes receivable, net

5,030 

5,140 

Inventories

5,380 

5,681 

Prepaid expenses

129 

143 

Income taxes

612 

643 

Total current assets

17,288 

15,311 

Property, plant and equipment, net of accumulated depreciation   (December 31, 2009 - $17,821; December 31, 2008 - $16,800)

11,094 

11,154 

Goodwill

2,137 

2,135 

Other intangible assets

2,552 

2,710 

Investment in affiliates

1,014 

844 

Other assets

4,100 

4,055 

Total

$     38,185 

$     36,209 

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$       3,542 

$      3,128 

Short-term borrowings and capital lease obligations

1,506 

2,012 

Income taxes

154 

110 

Other accrued liabilities

4,188 

4,460 

Total current liabilities

9,390 

9,710 

Long-term borrowings and capital lease obligations

9,528 

7,638 

Other liabilities

11,490 

11,169 

Deferred income taxes

126 

140 

Total liabilities

30,534 

28,657 

Commitments and contingent liabilities

Stockholders' equity

Preferred stock

237 

237 

Common stock, $0.30 par value; 1,800,000,000 shares authorized;   issued at December 31, 2009 - 990,855,000; December 31, 2008 - 989,415,000

297 

297 

Additional paid-in capital

8,469 

8,380 

Reinvested earnings

10,710 

10,456 

Accumulated other comprehensive loss

(5,771)

(5,518)

Common stock held in treasury, at cost (87,041,000 shares at December 31, 2009 and 2008)

(6,727)

(6,727)

Total DuPont stockholders' equity

7,215 

7,125 

Noncontrolling interests

436 

427 

Total equity

7,651 

7,552 

Total

$     38,185 

$     36,209 



E. I. du Pont de Nemours and Company

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)

SCHEDULE A (continued)

Year Ended December 31,

2009 

2008 

Cash provided by operating activities

$4,741

$3,129

Investing activities

Purchases of property, plant and equipment

(1,308)

(1,978)

Investments in affiliates

(124)

(55)

Payments for businesses (net of cash acquired)

(13)

(144)

Net decrease (increase) in short-term financial instruments

(2,016)

40 

Other investing activities - net

(837)

527 

Cash used for investing activities

(4,298)

(1,610)

Financing activities

Dividends paid to stockholders

(1,492)

(1,496)

Net (decrease) increase in borrowings

1,391 

2,089 

Other financing activities - net

285 

Cash (used for) provided by financing activities

(97)

878 

Effect of exchange rate changes on cash

30 

(57)

Increase in cash and cash equivalents

376 

2,340 

Cash and cash equivalents at beginning of period

3,645 

1,305 

Cash and cash equivalents at end of period

$4,021

$3,645

E. I. du Pont de Nemours and Company

Schedules of Significant Items

(Dollars in millions, except per share amounts)

SCHEDULE B

SIGNIFICANT ITEMS

Pre-tax

After-tax

($ Per Share)

2009 

2008 

2009 

2008 

2009 

2008 

1st Quarter - Total

$       - 

$       - 

$       - 

$       - 

$         - 

$         - 

2nd Quarter

2009 Restructuring charge (a)

$  (340)

$         - 

$  (227)

$         - 

$    (0.25)

$         - 

2008 Restructuring adjustment (b)

75 

53 

0.06 

Hurricane proceeds and adjustments (c )

50 

33 

0.04 

2nd Quarter - Total

$  (215)

$       - 

$  (141)

$       - 

$    (0.15)

$         - 

3rd Quarter

Hurricane charges (d)

$       - 

$  (227)

$       - 

$  (146)

$         - 

$    (0.16)

3rd Quarter - Total

$       - 

$  (227)

$       - 

$  (146)

$         - 

$    (0.16)

4th Quarter

2008 and 2009 Restructuring adjustments (b)

$      55 

$       - 

$      39 

$       - 

$      0.04 

$         - 

2008 Restructuring charges (e)

(535)

(380)

(0.42)

4th Quarter - Total

$      55 

$  (535)

$      39 

$  (380)

$      0.04 

$    (0.42)

Full Year - Total

$  (160)

$  (762)

$  (102)

$  (526)

$    (0.11)

$    (0.58)

(a)  Second quarter and full year 2009 included a $(340) restructuring charge recorded in Employee separation / asset related charges, net related to severance and related benefit costs, asset related charges, and other non-personnel costs.  Pre-tax amounts by segment were:  Electronics & Communications - $(43); Performance Chemicals - $(66); Performance Coatings - $(65);  Performance Materials - $(110); Safety & Protection - $(55); and Other - $(1).  

(b)  Second quarter and fourth quarter 2009 included a net reduction of $75 and $55, respectively for estimated costs recorded in Employee separation / asset related charges, net related to the 2008 and 2009 restructuring programs primarily due to the achievement of work force reductions through non-severance programs.  Total full year pre-tax amounts by segment were: Agriculture & Nutrition - $1; Electronics and Communications - $6; Performance Chemicals - $12; Performance Coatings - $50; Performance Materials - $52; Safety & Protection - $10; and Other - $(1).  

(c)  Second quarter and full year 2009 included a $50 benefit in Cost of goods sold and other operating charges resulting from a reduction of $26 from lower than estimated inventory and permanent investment write-offs and $24 in insurance recoveries relating to the damage from Hurricane Ike in 2008.  Total pre-tax amount relates to the Performance Materials segment.  

(d)  Third quarter and full year 2008 included a pre-tax charge of $(227) for costs associated with clean up, restoration of manufacturing operations, and lost inventory resulting from hurricanes damages.  Pre-tax hurricane charges by segment were: Agriculture & Nutrition - $(4); Performance Chemicals - $(6); Performance Materials - $(216); and Safety & Protection - $(1).    

(e)  Fourth quarter and full year 2008 includes a $(535) restructuring charge in Employee separation / asset related charges, net comprised of severance and related benefit costs, asset write-offs, impairment charges, and other non-personnel costs.  Pre-tax amounts by segment were:  Agriculture & Nutrition - $(18); Electronics & Communications - $(37); Performance Chemicals - $(50); Performance Coatings - $(209); Performance Materials - $(94); Safety & Protection – $(96); and Other - $(31).  

See Schedule C for detail by segment.

E. I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)

SCHEDULE C

Three Months Ended December 31,

Year Ended December 31,

SEGMENT SALES (1)

2009

2008

2009

2008

Agriculture & Nutrition

$  1,368

$  1,225

$  8,287

$  7,952

Electronics & Communications

         582

         477

      1,918

      2,194

Performance Chemicals

      1,320

      1,207

      4,964

      6,035

Performance Coatings

         975

         905

      3,429

      4,361

Performance Materials

      1,436

      1,194

      4,768

      6,425

Safety & Protection

         759

         834

      2,811

      3,733

Other

           45

           31

         158

         160

Total Segment sales

$  6,485

$  5,873

$26,335

$30,860

Elimination of transfers

         (66)

         (53)

       (226)

       (331)

Consolidated net sales

$  6,419

$  5,820

$26,109

$30,529

(1)   Sales for the reporting segments include transfers.

E. I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)

SCHEDULE C (continued)

Three Months Ended December 31,

Year Ended December 31,

PRE-TAX OPERATING INCOME/(LOSS) (PTOI)

2009 

2008 

2009 

2008 

Agriculture & Nutrition

$     (95)

$  (182)

$  1,224 

$ 1,087 

Electronics & Communications

67 

(8)

87 

251 

Performance Chemicals

217 

(36)

547 

687 

Performance Coatings

78 

(290)

69 

(8)

Performance Materials

198 

(223)

287 

128 

Safety & Protection

144 

(9)

260 

661 

Pharmaceuticals

247 

265 

1,037 

1,025 

Other

(58)

(112)

(171)

(181)

Total Segment PTOI

$     798 

$  (595)

$  3,340 

$ 3,650 

Net exchange gains (losses) (1)

(3)

(116)

(205)

(255)

Corporate expenses & net interest

(223)

(250)

(951)

(1,004)

Income (loss) before income taxes

$     572 

$  (961)

$  2,184 

$ 2,391 

Three Months Ended December 31,

Year Ended December 31,

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

2009 

2008 

2009 

2008 

Agriculture & Nutrition

$         2 

$    (18)

$         1 

$    (22)

Electronics & Communications

(37)

(37)

(37)

Performance Chemicals

(50)

(54)

(56)

Performance Coatings

(209)

(15)

(209)

Performance Materials

24 

(94)

(8)

(310)

Safety & Protection

(96)

(45)

(97)

Pharmaceuticals

Other

(3)

(31)

(2)

(31)

Total significant items by segment

$       55 

$  (535)

$   (160)

$  (762)

Three Months Ended December 31,

Year Ended December 31,

PTOI EXCLUDING SIGNIFICANT ITEMS

2009 

2008 

2009 

2008 

Agriculture & Nutrition

$     (97)

$  (164)

$  1,223 

$ 1,109 

Electronics & Communications

61 

29 

124 

288 

Performance Chemicals

208 

14 

601 

743 

Performance Coatings

70 

(81)

84 

201 

Performance Materials

174 

(129)

295 

438 

Safety & Protection

135 

87 

305 

758 

Pharmaceuticals

247 

265 

1,037 

1,025 

Other

(55)

(81)

(169)

(150)

Total Segment PTOI excluding significant items

$     743 

$    (60)

$  3,500 

$ 4,412 

(1)  Gains and losses resulting from the company's hedging program are largely offset by associated tax effects.  

      See Schedule D for additional information.

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

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SCHEDULE D

Summary of Earnings Comparisons

Three Months Ended December 31,

Year Ended December 31,

2009   

2008   

% Change

2009   

2008   

% Change

Segment PTOI

$            798

$          (595)

n/m

$         3,340

$         3,650

-8%

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

(55)

535

160

762

Segment PTOI excluding significant items

$            743

$            (60)

n/m

$         3,500

$         4,412

-21%

Net income (loss) attributable to DuPont

$            441

$          (629)

n/m

$         1,755

$         2,007

-13%

Significant items charge (benefit) included in net income (loss)

attributable to DuPont (per Schedule B)

(39)

380

102

526

Net income (loss) attributable to DuPont

excluding significant items

$            402

$          (249)

n/m

$         1,857

$         2,533

-27%

EPS

$           0.48

$         (0.70)

n/m

$           1.92

$           2.20

-13%

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

(0.04)

0.42

0.11

0.58

EPS excluding significant items

$           0.44

$         (0.28)

n/m

$           2.03

$           2.78

-27%

Average number of diluted shares outstanding

910,854,000

903,265,000

0.8%

908,712,000

907,371,000

0.1%

Reconciliation of Earnings Per Share (EPS)

Year Ended

December 31,

2009      Actual

2008      Actual

Earnings per share - excluding significant items

$     2.03 

$     2.78 

Significant items included in EPS(1):

2009 Restructuring charge

(0.25)

2009 Restructuring credit

0.02 

2008 Restructuring credit (charge)

0.08 

(0.42)

Hurricane proceeds and adjustments

0.04 

Hurricane charge

(0.16)

Net charge for significant items

(0.11)

(0.58)

Reported EPS

$     1.92 

$     2.20 

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

Calculation of Free Cash Flow

Year Ended

December 31,

2009 

2008 

Cash provided by operating activities

$   4,741 

$   3,129 

Less: Purchases of property, plant and equipment

1,308 

1,978 

Free cash flow

$   3,433 

$   1,151 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SCHEDULE D (continued)

Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements

Three Months Ended December 31,

Year Ended December 31,

2009   

2008   

2009   

2008   

Income (loss) before income taxes

$     572

$    (961)

$  2,184

$   2,391

Less: Net income (loss) attributable to noncontrolling interests

4

(7)

14

3

Add:  Interest expense

96

104

408

376

Adjusted EBIT

664

(850)

2,578

2,764

Add: Depreciation and amortization

346

348

1,503

1,444

Adjusted EBITDA

$  1,010

$    (502)

$  4,081

$   4,208

Reconciliations of Fixed Costs as a Percent of Sales

Three Months Ended December 31,

Year Ended December 31,

2009   

2008   

2009   

2008   

Total charges and expenses - consolidated income statements

$  6,242

$   7,031

$25,144

$ 29,445

Remove:  

  Interest expense

(96)

(104)

(408)

(376)

  Variable costs (1)

(2,979)

(3,245)

(12,507)

(15,736)

  Significant items (2)

55

(535)

(160)

(762)

      Fixed costs

$  3,222

$  3,147

$12,069

$ 12,571

Consolidated net sales

$  6,419

$   5,820

$ 26,109

$ 30,529

Fixed costs as a percent of consolidated net sales

50.2%

54.1%

46.2%

41.2%

(1)  Includes variable manufacturing costs, freight, commissions and other selling expenses which vary with the volume of sales.

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

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

SCHEDULE D (continued)

Exchange Gains/Losses

The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes.  The net pre-tax exchange gains and losses are recorded in Other income, net on the Consolidated Income Statements and are largely offset by the associated tax impact.

Three Months Ended December 31,

Year Ended December 31,

2009

2008

2009

2008

Subsidiary/Affiliate Monetary Position Gain/(Loss)

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

$      (8)

$   (286)

$    280

$   (396)

Local tax benefits (expenses)

         (24)

            93

         (75)

          130

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

$    (32)

$   (193)

$    205

$   (266)

Hedging Program Gain/(Loss)

Pre-tax exchange gains (losses)

$        5

$     170

$  (485)

$      141

Tax benefits (expenses)

           (2)

          (58)

         166

          (47)

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

$        3

$     112

$  (319)

$       94

Total Exchange Gain/(Loss)

Pretax exchange gains (losses)

$      (3)

$   (116)

$  (205)

$   (255)

Tax benefits (expenses)

         (26)

            35

           91

            83

Net after-tax exchange gains (losses)

$    (29)

$     (81)

$  (114)

$   (172)

As shown above, the "Total Exchange Gain/(Loss)" is the sum of the "Subsidiary/Affiliate Monetary Position Gain/(Loss)" and the "Hedging Program Gain/(Loss)."  

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate

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

Three Months Ended December 31,

Year Ended December 31,

2009

2008

2009

2008

Income (loss) before income taxes

$    572

$   (961)

$ 2,184

$  2,391

Add:  Significant items (1)

         (55)

          535

         160

          762

Less:  Net exchange gains (losses)

        (3)

        (116)

       (205)

        (255)

Income (loss) before income taxes, significant items and exchange gains/losses

$    520

$   (310)

$ 2,549

$  3,408

Provision for (benefit from) income taxes

$    127

$   (325)

$    415

$     381

Add:  Tax benefit (expense) on significant items

         (16)

          150

           58

          231

         Tax benefits (expenses) on exchange gains/losses

         (26)

            35

           91

            83

Provision for (benefit from) income taxes, excluding taxes on significant items   and exchange gains/losses

$      85

$   (140)

$   564

$     695

Effective income tax rate

22.2%

33.8%

19.0%

15.9%

Significant items effect

(0.7%)

7.3%

1.2%

3.5%

Tax rate before significant items

21.5%

41.1%

20.2%

19.4%

Exchange gains (losses) effect

(5.2%)

4.1%

1.9%

1.0%

Base income tax rate

16.3%

45.2%

22.1%

20.4%

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

SOURCE DuPont



RELATED LINKS

http://www.dupont.com