Dupont Fourth Quarter 2006 Earnings Supplemental Information
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January 23, 2007 DuPont Fourth Quarter 2006 Earnings Supplemental Information Contents: Segment Details Commentary on business results in the quarter DuPont Highlights Summary of news highlights from the quarter DuPont IR Note 1 January 23, 2007 Fourth Quarter 2006 Segment Details All commentary is based on year-over-year comparisons, unless otherwise noted. All earnings commentary is based on pretax operating income (PTOI) and excludes significant items. DUPONT AGRICULTURE & NUTRITION • Pioneer 4Q sales were $229 million, up 59%, reflecting higher volume, price and share gains in Brazil, Asia and Africa and the earlier start of 2007 corn season marketing in Europe. • Earnings increased substantially on higher sales. • Two high potential pipeline projects advanced with completed regulatory filings for Optimum™GAT™ and High Oleic soybeans. • Crop protection sales increased substantially, led by higher insecticides and fungicides sales in the Southern Hemisphere and sulfonyl urea sales to Northern Hemisphere cereals markets. • Earnings increased substantially on higher sales. • Nutrition & Health sales were essentially unchanged with higher prices offsetting slightly lower volume. Earnings increased on higher prices and effective cost control. DUPONT COATINGS & COLOR TECHNOLOGIES • Ti02 sales grew substantially on higher volumes as the business re-established pre-Katrina market share. Strong sales in Asia and Europe offset weakness in North America coatings. • Ti02 earnings increased substantially on higher volumes, increased fixed cost productivity and the sale of the Australian Zircon Mineral Rights. • Refinish sales increased modestly on higher local prices and volume. Earnings increased slightly as higher local prices and currency offset higher variable costs. • Automotive Systems sales decreased moderately as price increases in all regions partly offset the significant volume decrease primarily driven by the reduction in N.A. auto builds. Earnings decreased substantially on lower volume and costs associated with the restructuring plan. • Advanced Coating Solutions sales and earnings increased as higher variable costs were more than offset by pricing, fixed cost control and the sale of a specialty adhesives business. DUPONT ELECTRONIC & COMMUNICATION TECHNOLOGIES • Electronic Technologies sales grew moderately primarily due to pass through of metals prices and currency gains. Key market segments driving revenue growth included semiconductor fabrication, printed circuit materials and photovoltaics. • Earnings increased modestly on flat sales, excluding the pass through of higher metals prices. • Fluoroproducts sales were essentially equal to the prior year. Volume gains for high value fluoropolymers and favorable currency were mostly offset by lower local prices for refrigerants. In particular, sales for higher value polymers were strong in Europe and Asia. • Earnings increased substantially as a result of volume and currency gains, partially offset by higher fixed costs for growth investments. • Imaging sales were essentially equal to the prior year. Volume gains for packaging graphics were offset by lower analog and inkjet sales. • Earnings declined due to higher costs. 2 DUPONT PERFORMANCE MATERIALS • Engineering Polymer sales grew modestly on volume, currency and price gains. Volume growth in Asia and Europe offset softness in North America. Price increased in all regions. • Earnings declined modestly as pricing gains did not offset higher raw material costs. • Packaging & Industrial Polymers sales grew significantly due to volume, currency and price gains. Sales grew in all regions. • Earnings grew substantially from the hurricane-impacted prior-year quarter due to sales gains and lower raw material and fixed costs. • Elastomers sales increased significantly due to volume, price and currency gains. • Earnings rose substantially as sales growth more than offset higher raw material costs. • Polyester films sales were flat reflecting favorable currency that was offset by lower volume and local prices. • Earnings declined as a result of higher raw material costs. DUPONT SAFETY & PROTECTION • Aramids (Kevlar®/Nomex®) sales increased moderately on higher prices and volumes. • Earnings increased significantly with strength in electrical insulation, emergency response, oil & gas and transportation segments more than offsetting higher variable costs. • Chemicals sales were up significantly on higher volume. Industrial chemical, excluding hurricane impact, specialty chemical and clean and disinfect segments had volume growth. • Earnings increased substantially on higher sales and lower ingredient costs. • Nonwovens revenue was down significantly on lower volume. Tyvek® demand was lower due to inventory destocking and softness in US housing and protective apparel markets. Price gains across all Tyvek® business segments partly offset the lower volume. • Nonwovens earnings reflect the inventory destocking and softness in US housing. • Surfaces sales increased slightly, due to pricing. Volumes were modestly down as gains in European commercial segment were offset by moderately lower volume in the U.S. • Earnings declined substantially with price increases partly offsetting variable cost increases and volume decreases. • Safety consulting sales were significantly lower. Growth in Europe and Asia partly offset declines in Latin America and US. • Earnings declined substantially on lower revenue. 3 January 23, 2007 Fourth Quarter 2006 Business Highlights Putting Our Science to Work: DuPont Building $30 Million Titanium Tetrachloride Unit -- DuPont announced that it will supply up to 100 million pounds of high purity titanium tetrachloride annually to Allegheny Titanium’s new titanium metal plant in Toole County, Utah. The new facility will make approximately 10,000 tons of titanium metal per year. Allegheny Titanium is a subsidiary of Allegheny Technologies, Inc. DuPont will invest $30 million at its New Johnsonville, Tenn., titanium dioxide plant to install a new purification unit to make titanium tetrachloride. DuPont Launches Breathable, Metallized Housewrap -- As part of its expanded market-facing sustainability commitments, DuPont has introduced DuPont™ Tyvek® ThermaWrap™ -- a breathable, metallized housewrap designed to enhance the thermal performance of walls. DuPont™ Tyvek® ThermaWrap™ provides all of the additional benefits of a weather resistant barrier. At the same time, it facilitates thermal management by managing radiant heat, helping to protect structures from air and water intrusion and UV rays. DuPont Surfaces Products Receive GREENGUARD Certification -- The GREENGUARD Environmental Institute (GEI) has designated DuPont™ Corian® solid surfaces, DuPont™ Zodiaq® quartz surfaces, as well as the sealants and adhesives from DuPont Surfaces, as GREENGUARD Indoor Air Quality Certified®. This DuPont portfolio of products provides architects, designers and building professionals with a complete surfacing system to help improve indoor air quality. DuPont™ Tyvek® AtticWrap™ Launched -- DuPont launched the first breathable roofing membrane to completely seal a home’s building envelope. A cutting-edge innovation, Tyvek® AtticWrap™ is specifically designed for a home’s attic to create a continuously airtight space that prevents air and water intrusion and helps conserve energy. New DuPont™ Biosecurity Kits Introduced -- DuPont introduced three new biosecurity kits for businesses seeking assistance with reducing the spread of viruses or bacteria. The DuPont™ Personal Biosecurity Kits and the DuPont™ Worksite Biosecurity Kits are now available to other organizations interested in maintaining the well-being of employees and ensuring business continuity in the event of a disease outbreak. The DuPont™ Biosecurity Kit for the Farm is also available. DuPont Introduces DuPont™ Nomex® Limitedwear for Military -- DuPont™ Nomex® Limtedwear for Military is a lightweight, limited-use garment designed to help protect soldiers from flash fires. DuPont™ Protera™ Introduced -- DuPont launched Protera™, a new line of inherent flame resistant fabrics specifically engineered to protect against electric arc hazards and meet National Fire Protection Association (NFPA) 70E Category 2 requirements. 4 DuPont Introduces Premium Interior Air Filters -- DuPont introduced its new line of automotive DuPont™ Premium Interior Air Filters, featuring exclusive filtering technology that cleans the outside air before it enters the cabin of the automobile. DuPont™ Premium Interior Air Filters capture up to 96 percent of fine dust, pollen, allergens and other airborne particles. DuPont™ Premium Interior Air Filters are also available with an added Activated Carbon Layer that reduces unpleasant odors inside the vehicle. The air filters are the latest offering from DuPont Separations Solutions, a growth initiative dedicated to developing and implementing technologies for filtration. Health Canada Validates DuPont™ BAX® System for Detecting E. coli O157:H7 in Fruits, Vegetables, Dairy and Other Foods -- Health Canada, the federal agency that oversees food safety in Canada, validated protocols for using the BAX® system from DuPont Qualicon to detect E. coli O157:H7 in fruits, vegetables, dairy, meat, animal feed, environmental samples and dry products. This recent approval supplements prior validation of the BAX® system for detecting the pathogen in ground beef and beef trim. DuPont Soybean Genetic Marker Technology Speeds Yield Enhancement -- A review of historical