DuPont Reports 4Q and Full-Year 2012 EPS of $.11 and $3.33 Ex-items
DuPont Reports 4Q and Full-Year 2012 EPS of $.11 and $3.33 Ex-items
Expects Modest Growth in 2013 Operating Earnings
PR Newswire
WILMINGTON, Del., Jan. 22, 2013
WILMINGTON, Del., Jan. 22, 2013 /PRNewswire/ --
Fourth Quarter:
o Fourth quarter 2012 earnings per share (EPS) from continuing operations,
excluding significant items, was $.11 versus prior year earnings of $.26.
Reported fourth quarter 2012 EPS from continuing operations was $.02
versus $.31 in the prior year.
o Sales of $7.3 billion equaled the prior year. Three percent higher volume
was offset by 2 percent negative currency impact and a 1 percent reduction
from portfolio changes.
o Segment pre-tax operating income (PTOI) was down, primarily reflecting
lower price and volume in Performance Chemicals. Titanium dioxide pricing
led the decline.
Full Year:
o 2012 EPS from continuing operations, excluding significant items, was
$3.33 versus $3.55 in 2011. Currency was a $.27 per share headwind for
the year. Reported EPS from continuing operations was $2.61 versus $3.30
in 2011 (see Schedule B.)
o Sales were $34.8 billion, up 3 percent with a 6 percent increase in
developing markets.
o Segment PTOI increased 3 percent to $5.7 billion, excluding
Pharmaceuticals and significant items. Agriculture PTOI increased 18
percent driven by volume and pricing growth for seed and crop protection
businesses in North America and Latin America. Performance Chemicals PTOI
decreased 16 percent from lower sales across the segment.
o Free cash flow was $3.1 billion versus $3.3 billion in the prior year.
2012 includes a $0.5 billion contribution to the principal U.S. pension
plan and lower net income, partly offset by improved working capital
productivity.
o Fixed cost and working capital productivity benefits were each about $400
million, surpassing their
$300 million targets.
o Reflecting the change in reporting for the cost of non-operating pension
and other post-employment benefits and excluding significant items, 2012
operating earnings were $3.77 per share. On the same basis, the 2013
outlook for operating earnings is $3.85 to $4.05 per share, an increase of
2 to 7 percent over the prior year.
"DuPont stands stronger today than it did a year ago. Our segments delivered
innovation, productivity and integration cost synergies. This, coupled with a
record year in new product introductions, has strengthened our market
position," said DuPont Chair and CEO Ellen Kullman. "However, weakness in
markets served by Performance Chemicals and Electronics & Communications
provided significant challenges in 2012. We've adjusted our plans to meet the
changing market environment and grow our businesses in a slow-growth world
economy."
Global Consolidated Sales - 4^th Quarter
Fourth quarter 2012 sales were $7.3 billion, flat versus the prior year.
Currency impact and portfolio changes offset 3 percent volume growth. Volume
was driven by Agriculture, with robust sales in Latin America and a strong
start to the North American selling season, and increases in Asia Pacific for
Performance Materials, Electronics & Communications and Performance
Chemicals. The table below shows fourth quarter regional sales and variances
versus fourth quarter 2011.
Three Months
Ended Percentage Change Due to:
December 31, 2012
Local Currency Portfolio/
(Dollars in billions) $ % Change Effect Volume
Price Other
U.S. & Canada $ - 2 - - (2)
2.5
EMEA* 1.6 (8) (1) (4) (2) (1)
Asia Pacific 1.9 - (5) (1) 6 -
Latin America 1.3 10 7 (4) 8 (1)
Total Consolidated $ - - (2) 3 (1)
Sales 7.3
Global Consolidated Sales - Full-Year
Full-year 2012 sales were $34.8 billion, up 3 percent versus 2011, reflecting
4 percent higher local prices, 2 percent adverse currency impact, 2 percent
lower volume, and a 3 percent net increase from portfolio changes. Local
prices increased for all segments except Electronics & Communications which
had lower pass-through of metals prices. Lower global volume principally
reflects decreases for Performance Chemicals and Electronics & Communications,
partly offset by higher Agriculture volumes. The table below shows regional
sales and variances versus 2011.
Year Ended Percentage Change Due to:
December 31, 2012
Local Currency Portfolio/
(Dollars in billions) $ % Change Effect Volume
Price Other
U.S. & Canada $ 8 6 - - 2
14.2
EMEA* 8.1 (1) 3 (6) (4) 6
Asia Pacific 8.0 (4) (1) (1) (5) 3
Latin America 4.5 11 9 (5) 5 2
Total Consolidated $ 3 4 (2) (2) 3
Sales 34.8
* Europe, Middle East & Africa
Income from Continuing Operations - 4^th Quarter
Excluding significant items, fourth quarter 2012 income from continuing
operations was $110 million versus $246 million in the prior year. The
decrease principally reflects lower income from Performance Chemicals and
Pharmaceuticals, increased spending for growth initiatives and adverse
currency impact. Reported fourth quarter 2012 income from continuing
operations was $19 million versus $293 million in the fourth quarter 2011.
Earnings Per Share - 4^th Quarter
The table below shows year-over-year earnings per share (EPS) variances for
the fourth quarter.
EPS ANALYSIS
4Q
EPS 2011 $.31
Less: Significant items - (schedule B) .05
EPS 2011 –Excluding significant items .26
Local prices (.01)
Variable cost* .12
Volume (.03)
Fixed cost* (.12)
Currency (.04)
Income tax .04
Pharmaceuticals income (.06)
Other** (.05)
EPS 2012 – Excluding significant items $.11
Add: Significant items - (schedule B) (.09)
EPS 2012 $.02
* Excludes volume and currency impacts
** Includes interest expense, net exchange gains/losses, and other income
Business Segment Performance - 4^th Quarter
The tables below show fourth quarter 2012 segment sales with related
variances versus the prior year and fourth quarter PTOI excluding significant
items.
SEGMENT SALES* Three Months Ended Percentage Change
(Dollars in billions) December 31, 2012 Due to:
USD Portfolio
$ % Change Volume
Price and Other
Agriculture $ 1.5 18 7 11 -
Electronics & Communications 0.6 (1) (3) 2 -
Industrial Biosciences 0.3 4 1 3 -
Nutrition & Health 0.9 6 3 3 -
Performance Chemicals 1.6 (15) (7) (8) -
Performance Materials 1.5 (5) (5) 3 (3)
Safety & Protection 1.0 2 (1) 3 -
* Segment sales include transfers
SEGMENT PTOI excluding Significant Change versus 2011
Items*
(Dollars in millions) 4Q 2012 4Q 2011 $ %
Agriculture $ $ (116) $ 24 21%
(92)
Electronics & Communications 24 42 (18) -43%
Industrial Biosciences 44 34 10 29%
Nutrition & Health 66 52 14 27%
Performance Chemicals 200 433 (233) -54%
Performance Materials 254 151 103 68%
Safety & Protection 88 94 (6) -6%
Other (71) (74) 3 nm
$ 513 $ 616 $ (103) -17%
Pharmaceuticals 9 89 (80) -90%
Total Segment PTOI $ 522 $ 705 $ (183) -26%
* See Schedules B and C for listing of significant items and their
impact by segment.
Business Segment Performance - Full Year
The tables below show full-year 2012 segment sales with related variances
versus the prior year, and full-year PTOI excluding significant items.
12 Months Ended Percentage Change
SEGMENT SALES* December 31, 2012 Due to:
(Dollars in billions)
USD Portfolio
$ % Change Volume
Price and Other
Agriculture $ 10.4 14 6 8 -
Electronics & Communications 2.7 (15) (4) (11) -
Industrial Biosciences 1.2 67 (4) 8 63
Nutrition & Health 3.4 39 1 3 35
Performance Chemicals 7.2 (8) 4 (12) -
Performance Materials 6.4 (5) (2) - (3)
Safety & Protection 3.8 (3) - (3) -
* Segment sales include transfers
SEGMENT PTOI excluding Significant Items*
(Dollars in millions) Change versus 2011
FY 2012 FY 2011 $ %
Agriculture $ 2,063 $ 1,752 $ 311 18%
Electronics & Communications 172 355 (183) -52%
Industrial Biosciences 171 78 93 119%
Nutrition & Health 348 170 178 105%
Performance Chemicals 1,622 1,923 (301) -16%
Performance Materials 1,117 924 193 21%
Safety & Protection 418 500 (82) -16%
Other (259) (235) (24) nm
$ 5,652 $ 5,467 $ 185 3%
Pharmaceuticals 62 289 (227) -79%
Total Segment PTOI $ 5,714 $ 5,756 $ -1%
(42)
* 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 in the fourth quarter (unless otherwise noted), comparing
current period with the prior year, 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 $1.5 billion were up 18 percent on 11 percent higher
volume and 7 percent higher prices despite the negative impact of currency.
PTOI seasonal loss of ($92) million improved $24 million on higher volume in
Latin America and stronger than expected pricing gains, partially offset by
continued investment in commercial and R&D activities.
Full-year sales of $10.4 billion grew 14 percent on 8 percent higher volume
and 6 percent higher prices. Pioneer seed sales increased from higher global
volume and pricing gains in corn and soybeans. Crop Protection sales grew on
strong demand for insecticides and herbicides in all regions. Full-year PTOI
increased 18 percent as strong sales more than offset unfavorable currency and
higher investments in commercial and R&D activities to support growth.
Electronics & Communications – Sales of $622 million were down 1 percent, with
2 percent higher volume offset by
3 percent lower prices, primarily pass-through of lower metals prices. Volume
growth from increased demand for materials in smart phones and tablets was
partly offset by continued softness in photovoltaic materials. PTOI declined
$18 million as the prior year included OLED technology licensing income of $20
million.
Industrial Biosciences – Sales of $300 million were up 4 percent on 3 percent
higher volume and 1 percent higher prices. Volume growth reflects strong
sales of Sorona^® polymer for carpeting, and continued growth in food enzymes
in Europe. PTOI of $44 million was up $10 million on higher volume and the
benefit of synergies realized from the integration of the Danisco enzyme
business.
Nutrition & Health – Sales of $853 million were up 6 percent on 3 percent
higher volume and 3 percent higher prices. Volume growth reflects strong
demand for probiotics, cultures and enablers. Higher local prices in all
regions were partly offset by unfavorable currency. PTOI of $66 million was
up $14 million on higher sales and the benefit of synergies realized from the
integration of the Danisco specialty food ingredients business, partly offset
by higher raw material costs.
Performance Chemicals – Sales of $1.6 billion were down 15 percent, with 8
percent lower volume and 7 percent lower prices. Lower volume resulted
primarily from weak demand for fluoropolymers in U.S. and Europe. Lower
prices reflect cyclical pressure in the titanium dioxide market. PTOI of $200
million decreased $233 million on lower sales and plant utilization in both
businesses.
Performance Materials – Sales of $1.5 billion were down 5 percent, with 5
percent lower prices and a 3 percent reduction from a portfolio change, partly
offset by 3 percent higher volume. Stable packaging markets and strong demand
in the North American automotive market were partially offset by softness in
the industrial and electronics markets and a weak Europe. PTOI of $254
million increased $103 million due to lower feedstock costs, higher volume and
mix enrichment, partly offset by unfavorable currency.
Safety & Protection – Sales of $964 million were up 2 percent on 3 percent
higher volume, partly offset by 1 percent lower prices due to unfavorable
currency. Volume increased on higher demand for Sustainable Solutions
offerings and U.S. residential and commercial construction products. PTOI of
$88 million decreased $6 million primarily due to lower plant utilization
related to softness in certain industrial markets and U.S. public sector
markets.
Additional information is available on the DuPont Investor Center website at
http://www.investors.dupont.com.
Outlook
Reflecting the change in reporting for the cost of non-operating pension and
other post-employment benefits and excluding significant items, 2012 operating
earnings were $3.77 per share. On the same basis, the 2013 outlook for
operating earnings is $3.85 to $4.05 per share, an increase of 2 to 7 percent
over the prior year. First half 2013 operating earnings are expected to
decline modestly on a year-over-year basis. Additionally, full-year 2013
sales are expected to be about $36 billion.
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 Year Ended
December 31, December 31,
2012 2011 2012 2011
Net sales $ $ $ $
7,325 7,343 34,812 33,681
Other income, net^(a) 247 338 498 742
Total 7,572 7,681 35,310 34,423
Cost of goods sold
and other operating 5,983 5,927 25,604 24,874
charges ^(a)
Selling, general and
administrative 842 791 3,567 3,358
expenses
Research and
development expense 547 527 2,067 1,910
^(a)
Interest expense 117 116 464 447
Employee separation /
asset related 99 17 493 53
charges, net ^(a)
Total 7,588 7,378 32,195 30,642
(Loss) income from
continuing operations (16) 303 3,115 3,781
before income taxes
(Benefit from)
provision for income (35) 10 622 626
taxes on continuing
operations
Income from
continuing operations 19 293 2,493 3,155
after income taxes
Net income from
discontinued 93 84 320 355
operations after
taxes
Net income 112 377 2,813 3,510
Less: Net income
attributable to 1 4 25 36
noncontrolling
interests
Net income $ $ $ $
attributable to 111 373 2,788 3,474
DuPont
Basic earnings per
share of common stock
^(b):
Basic earnings per
share of common stock $ $ $ $
from continuing 0.02 0.31 2.63 3.35
operations
Basic earnings per
share of common stock 0.10 0.09 0.34 0.38
from discontinued
operations
Basic earnings per $ $ $ $
share of common stock 0.12 0.40 2.98 3.73
Diluted earnings per
share of common stock
^(b):
Diluted earnings per
share of common stock $ $ $ $
from continuing 0.02 0.31 2.61 3.30
operations
Diluted earnings per
share of common stock 0.10 0.09 0.34 0.38
from discontinued
operations
Diluted earnings per $ $ $ $
share of common stock 0.12 0.40 2.95 3.68
Dividends per share $ $ $ $
of common stock 0.43 0.41 1.70 1.64
Average number of
shares outstanding
used in earnings per
share (EPS)
calculation:
Basic 933,420,000 925,588,000 933,275,000 928,417,000
Diluted 941,219,000 935,709,000 942,197,000 941,029,000
(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.
E. I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
December 31, December 31,
2012 2011
Assets
Current assets
Cash and cash equivalents $ 4,284 $ 3,586
Marketable securities 123 433
Accounts and notes receivable, net 5,452 6,022
Inventories 7,422 7,195
Prepaid expenses 204 151
Deferred income taxes 650 671
Assets held for sale 3,056 -
Total current assets 21,191 18,058
Property, plant and equipment, net of
accumulated depreciation 12,741 13,412
(December 31, 2012 - $19,085;
December 31, 2011 - $19,349)
Goodwill 4,616 5,413
Other intangible assets 5,126 5,413
Investment in affiliates 1,163 1,117
Deferred income taxes 3,939 4,067
Other assets 960 1,012
Total $ 49,736 $ 48,492
Liabilities and Equity
Current liabilities
Accounts payable $ 4,853 $ 4,816
Short-term borrowings and capital lease 1,275 817
obligations
Income taxes 340 255
Other accrued liabilities 5,997 5,297
Liabilities related to assets held for 1,084 -
sale
Total current liabilities 13,549 11,185
Long-term borrowings and capital lease 10,465 11,736
obligations
Other liabilities 14,687 15,508
Deferred income taxes 856 1,001
Total liabilities 39,557 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 December 31, 2012 - 306 304
1,020,057,000; December 31, 2011 -
1,013,164,000
Additional paid-in capital 10,632 10,107
Reinvested earnings 14,286 13,422
Accumulated other comprehensive loss (8,646) (8,750)
Common stock held in treasury, at cost
(87,041,000 shares (6,727) (6,727)
at December 31, 2012 and 2011)
Total DuPont stockholders' equity 10,088 8,593
Noncontrolling interests 91 469
Total equity 10,179 9,062
Total $ 49,736 $ 48,492
E. I. du Pont de Nemours and Company
Condensed Consolidated Statement of Cash Flows
(Dollars in millions, except per share amounts)
SCHEDULE A (continued)
Year Ended
December 31,
Total Company 2012 2011
Cash provided by (used for) operating activities $ 4,849 $ 5,152
Investing activities
Purchases of property, plant and equipment (1,793) (1,843)
Investments in affiliates (97) (67)
Payments for businesses (net of cash acquired) (18) (6,459)
Net (increase) decrease in short-term financial instruments 315 2,149
Proceeds from sales of assets - net of cash sold 302 214
Other investing activities - net (55) (232)
Cash provided by (used for) investing activities (1,346) (6,238)
Financing activities
Dividends paid to stockholders (1,594) (1,533)
Net increase (decrease) in borrowings (793) 1,561
Repurchase of common stock (400) (672)
Proceeds from exercise of stock options 550 952
Payments for noncontrolling interest (470) -
Other financing activities - net 10 95
Cash provided by (used for) financing activities (2,697) 403
Effect of exchange rate changes on cash (13) 6
Cash classified as held for sale (95) -
Increase (decrease) in cash and cash equivalents 698 (677)
Cash and cash equivalents at beginning of period 3,586 4,263
Cash and cash equivalents at end of period $ 4,284 $ 3,586
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 $ (265) $ - $ (169) $ - $ $ -
^(a) (0.18)
Litigation settlement (137) - (123) - (0.13) -
^(b)
Gain on the sale of
equity
method investment 122 - 77 - 0.08 -
^(c)
Transition costs related
to the
acquisition of - (103) - (81) - (0.08)
Danisco^(d)
2nd Quarter - Total $ (280) $ (103) $ (215) $ $ $ (0.08)
(81) (0.23)
3rd Quarter
Customer claims charge $ (125) $ (75) $ $ $ $ (0.05)
^(a) (80) (48) (0.09)
Restructuring charge (152) - (105) - (0.11) -
^(e)
Asset impairment charge (242) - (157) - (0.17) -
^(f)
Transition costs and
restructuring charge
related to the
acquisition of - (171) - (122) - (0.13)
Danisco ^(g)
Charge related to
milestone payment
for licensing - (50) - (33) - (0.03)
agreement ^(h)
3rd Quarter - Total $ (519) $ (296) $ (342) $ (203) $ $ (0.21)
(0.37)
4th Quarter
Customer claims charge $ (135) $ (100) $ $ $ $ (0.07)
^(a) (89) (64) (0.09)
Restructuring (66) (17) (56) (11) (0.06) (0.01)
charge/adjustments ^(i)
Asset impairment charge (33) - (21) - (0.02) -
^(j)
Gain on sale of business 117 - 75 - 0.08 -
^(k)
Sale of a business ^(l) - 49 - 122 - 0.13
4th Quarter - Total $ (117) $ (68) $ $ 47 $ $ 0.05
(91) (0.09)
Full Year - Total ^(m) $ (966) $ (467) $ (680) $ (237) $ $ (0.25)
(0.72)
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
Fourth quarter 2012, third quarter 2012, second quarter 2012, first
quarter 2012, fourth quarter 2011, and third quarter 2011 included
charges of $(135), $(125), $(265), $(50), $(100), 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 $(750) at December 31, 2012. The company will continue to evaluate
reported claim damage as additional information becomes available. It
(a) 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 $(900). The company has an applicable insurance
program with a deductible equal to the first $100 of costs and
expenses. The insurance program limits are $725 for costs and expenses
in excess of the $100. The company has submitted, and will continue to
submit, requests for payment to its insurance carriers for costs
associated with this matter. This matter relates to the Agriculture
segment.
Second quarter 2012 included a charge of $(137) recorded in Cost of
(b) goods sold and other operating charges primarily related to the
company's settlement of litigation with Invista. This matter is
included in Other.
Second quarter 2012 included a pre-tax gain of $122 recorded in Other
(c) income, net associated with the sale of an equity method investment in
the Electronics & Communications segment.
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
(d) 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).
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
(e) 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).
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
(f) 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.
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
(g) 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).
Third quarter 2011 included a ($50) charge recorded in Research and
(h) development expense in connection with a milestone payment associated
with a Pioneer licensing agreement.
Fourth quarter 2012 included a $(66) restructuring charge recorded in
Employee separation/asset related charges, net primarily as a result
of the company's plans to eliminate corporate costs previously
allocated to Performance Coatings and cost-cutting actions to improve
competitiveness, partially offset by a reversal of prior year
restructuring accruals. Pre-tax charges by segment are: Agriculture -
$(8), Electronics & Communications - $(2), Nutrition & Health - $(36),
(i) Performance Materials - $(3), Safety & Protection - $(3), Other - $11,
and Corporate expenses - $(25). Fourth quarter 2011 included a $(17)
restructuring charge recorded in Employee separation/asset related
charges, net primarily related to severance and related benefit costs
associated with the Danisco acquisition, partially offset by a
reversal of prior year restructuring accruals. Pre-tax charges by
segment were: Industrial Biosciences - $(1), Nutrition & Health -
$(4), Performance Materials - $(2), and Other - $(10).
Fourth quarter 2012 included a $(33) impairment charge recorded in
Employee separation/asset related charges, net related to an asset
(j) group within the Performance Chemicals segment. The charge was a
result of strategic decisions related to deteriorating conditions
within a specific industrial chemicals market.
Fourth quarter 2012 included a pre-tax gain of $117 recorded in Other
(k) income, net associated with the sale of a business within the
Agriculture segment.
Fourth quarter 2011 included a pre-tax gain of $49 recorded in Other
(l) income, net associated with the sale of a business in the Performance
Materials segment and a related tax benefit of $73.
(m) 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 Year Ended
December 31, December 31,
SEGMENT SALES ^(1) 2012 2011 2012 2011
Agriculture $ 1,535 $ 1,297 $ 10,426 $ 9,166
Electronics & Communications 622 630 2,701 3,173
Industrial Biosciences 300 289 1,180 705
Nutrition & Health 853 806 3,422 2,460
Performance Chemicals 1,588 1,860 7,188 7,794
Performance Materials 1,534 1,618 6,447 6,815
Safety & Protection 964 943 3,825 3,934
Other 1 1 5 40
Total Segment sales 7,397 7,444 35,194 34,087
Elimination of transfers (72) (101) (382) (406)
Consolidated net sales $ 7,325 $ 7,343 $ 34,812 $ 33,681
(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 Year Ended
December 31, December 31,
PRE-TAX OPERATING INCOME/(LOSS) (PTOI) 2012 2011 2012 2011
FROM CONTINUING OPERATIONS
Agriculture $ (118) $ (216) $ 1,594 $ 1,527
Electronics & Communications 22 42 135 355
Industrial Biosciences 44 33 168 (1)
Nutrition & Health 30 48 299 44
Performance Chemicals 167 433 1,586 1,923
Performance Materials 251 198 1,013 971
Safety & Protection 85 94 360 500
Pharmaceuticals 9 89 62 289
Other (60) (84) (385) (263)
Total Segment PTOI 430 637 4,832 5,345
Net exchange gains (losses) ^(1) (54) (14) (215) (146)
Corporate expenses & net interest (392) (320) (1,502) (1,418)
(Loss) income before income taxes from $ (16) $ 303 $ 3,115 $ 3,781
continuing operations
Three Months Ended Year Ended
December 31, December 31,
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) 2012 2011 2012 2011
^(2)
Agriculture $ (26) $ (100) $ (469) $ (225)
Electronics & Communications (2) - (37) -
Industrial Biosciences - (1) (3) (79)
Nutrition & Health (36) (4) (49) (126)
Performance Chemicals (33) - (36) -
Performance Materials (3) 47 (104) 47
Safety & Protection (3) - (58) -
Pharmaceuticals - - - -
Other 11 (10) (126) (28)
Total significant items by segment $ (92) $ (68) $ (882) $ (411)
Three Months Ended Year Ended
December 31, December 31,
PTOI EXCLUDING SIGNIFICANT ITEMS 2012 2011 2012 2011
Agriculture $ (92) $ (116) $ 2,063 $ 1,752
Electronics & Communications 24 42 172 355
Industrial Biosciences 44 34 171 78
Nutrition & Health 66 52 348 170
Performance Chemicals 200 433 1,622 1,923
Performance Materials 254 151 1,117 924
Safety & Protection 88 94 418 500
Pharmaceuticals 9 89 62 289
Other (71) (74) (259) (235)
Total Segment PTOI excluding $ 522 $ 705 $ 5,714 $ 5,756
significant items
(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 Year Ended
December 31, December 31,
2012 2011 % 2012 2011 %
Change Change
Segment PTOI $ $ -32% $ $ -10%
430 637 4,832 5,345
Significant items
(benefit) charge 92 68 882 411
included in PTOI (per
Schedule C)
Segment PTOI excluding $ $ -26% $ $ -1%
significant items 522 705 5,714 5,756
Income from continuing $ $ $ $
operations after income 19 293 -94% 2,493 3,155 -21%
taxes
Significant items
(benefit) charge
included in income from
continuing operations
after income taxes 91 (47) 680 237
(per Schedule B)
Income from continuing
operations after income $ $ -55% $ $ -6%
taxes, excluding 110 246 3,173 3,392
significant items
EPS from $ $ $ $
continuing 0.02 0.31 -94% 2.61 3.30 -21%
operations
Significant items
(benefit) charge 0.09 (0.05) 0.72 0.25
included in EPS (per
Schedule B)
EPS from continuing $ $ $ $
operations, excluding 0.11 0.26 -58% 3.33 3.55 -6%
significant items
Average number of
diluted shares 941,219,000 935,709,000 1% 942,197,000 941,029,000 0%
outstanding
Reconciliation of
Operating Earnings Per
Share (EPS) Outlook
The reconciliation below represents the company's outlook on an operating earnings basis,
defined as earnings from continuing operations excluding significant items and non-operating
pension/OPEB costs, as presented on December 13, 2012.
Year Ended December 31,
2013 2012 Actual
Outlook
Operating EPS $3.85 - $
$4.05 3.77
Significant items
1Q 2013 U.S. tax
law items 0.07 -
retroactive to
2012 - estimate
Sale of an equity 0.08
method investment
Customer claims (0.39)
charges
Restructuring (0.17)
charge/adjustments
Litigation (0.13)
settlement
Asset impairment (0.19)
charge
Sale of business 0.08
Non-operating
pension/OPEB costs (0.42) (0.47)
- estimate
Impact of LIFO - 0.03
accounting change
Reported EPS from $3.50 - $
continuing $3.70 2.61
operations
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 Year Ended
December 31, December 31,
2012 2011 2012 2011
(Loss) income from continuing
operations before income $ (16) $ 303 $ 3,115 $ 3,781
taxes
Less: Net income attributable to 1 4 25 36
noncontrolling interests
Add: Interest expense 117 116 464 447
Adjusted EBIT from continuing 100 415 3,554 4,192
operations
Add: Depreciation and 394 393 1,631 1,451
amortization
Adjusted EBITDA from $ 494 $ 808 $ 5,185 $ 5,643
continuing operations
Calculation of Free Cash Flow -
Total Company
Year Ended
December 31,
2012 2011
Cash provided by (used for) $ 4,849 $ 5,152
operating activities
Less: Purchases of property, 1,793 1,843
plant and equipment
Free cash flow $ 3,056 $ 3,309
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 Year Ended
December 31,
December 31,
2012 2011 2012 2011
Subsidiary/Affiliate
Monetary Position Gain
(Loss)
Pre-tax exchange gains $ $ $ $
(losses) (includes (8) (58)
equity affiliates) (83) (13)
Local tax benefits 9 4 19 35
(expenses)
Net after-tax impact $ $ $ $
from subsidiary exchange 1 (39)
gains (losses) (79) 22
Hedging Program Gain
(Loss)
Pre-tax exchange gains $ $ $ $
(losses) (46) (157) (133)
69
Tax benefits (expenses) 16 (24) 54 46
Net after-tax impact $ $ $ $
from hedging program (30) (103)
exchange gains (losses) 45 (87)
Total Exchange Gain
(Loss)
Pre-tax exchange gains $ $ $ $
(losses) (54) (215) (146)
(14)
Tax benefits (expenses) 25 (20) 73 81
Net after-tax exchange $ $ $ $
gains (losses) ^(1) (29) (142)
(34) (65)
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 $(3)
and $(5) for the three months ended December 31, 2012 and 2011,
respectively, and $(14) and $(17) for the year ended December
31, 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 Year Ended
December 31,
December 31,
2012 2011 2012 2011
(Loss) income from $ $ $ $
continuing operations (16) 303 3,115 3,781
before income taxes
Add: Significant items 117 68 966 467
- (benefit) charge ^(2)
Less: Net exchange (54) (14) (215) (146)
(losses) gains
Income from continuing
operations before income
taxes, significant items and
exchange
gains/losses $ $ $ $
155 385 4,296 4,394
(Benefit from) provision $ $ $ $
for income taxes on (35) 622 626
continuing operations 10
Add: Tax benefit
(expenses) on 26 115 286 230
significant items
Tax benefits
(expenses) on exchange 25 (20) 73 81
gains/losses
Provision for income taxes on
continuing operations,
excluding taxes on significant $ $ $ $
items 16 105 981 937
and exchange
gains/losses
Effective income tax 218.8% 3.3% 20.0% 16.6%
rate
Significant items effect (227.7%) 30.4% 2.2% 3.6%
Tax rate, from
continuing operations, (8.9%) 33.7% 22.2% 20.2%
before significant items
Exchange gains (losses) 19.2% (6.4%) 0.6% 1.1%
effect
Base income tax rate
from continuing 10.3% 27.3% 22.8% 21.3%
operations
(2) See Schedule B for
detail of significant
items.
E. I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)
SCHEDULE E
Below represents the company's estimated 4Q and Full Year 2012 segment
operating earnings reflecting the change in reporting for the cost of
non-operating pension and other post-employment benefits and excluding
significant items.
Three Months Year Ended
Ended December 31,
December 31,
SEGMENT OPERATING EARNINGS 2012 2012
Agriculture $ $
(78) 2,138
Electronics & Communications 43 259
Industrial Biosciences 42 162
Nutrition & Health 58 326
Performance Chemicals 237 1,814
Performance Materials 273 1,225
Safety & Protection 133 620
Pharmaceuticals 9 62
Other (101) (355)
Total Segment Operating Earnings 616 6,251
Significant items benefit (92) (882)
(charge)^(1)
Non-operating pension/OPEB costs (144) (615)
LIFO/Other reporting changes 50 78
Total Segment PTOI $ $
430 4,832
(1) See Schedule B for detail of significant items.
SOURCE DuPont
Website: http://www.dupont.com
Contact: Media Contact: Michael Hanretta, +1-302-774-4005,
michael.j.hanretta@usa.dupont.com; Investor Contact: +1-302-774-4994
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