WILMINGTON, Del., July 25 /PRNewswire-FirstCall/ -- Highlights --
The company reported second quarter 2006 earnings of $1.04 per
share. Excluding significant items, earnings per share were $1.01,
up 12 percent from $.90 per share last year. -- Average local
prices were 2 percent higher and increased for the 10th consecutive
quarter. Worldwide sales volumes increased 1 percent, while
currency effects reduced sales 1 percent. -- Total fixed costs
declined $80 million year-over-year, and as a percentage of sales
improved 70 basis points to 39.8 percent. -- The company reaffirms
its full year earnings outlook and expects second half earnings to
be up significantly compared to 2005. "Our results this quarter
reflect progress in executing our growth strategies and performance
improvement initiatives," said Charles O. Holliday, Jr., DuPont
chairman and chief executive officer. "Our businesses delivered
improved pricing, more new product innovations, and again
demonstrated excellent cost control. We also achieved important
milestones in our emerging biofuels business and in our seed
pipeline. We are well-positioned for strong earnings growth in the
second half." Global Consolidated Net Income and Sales Consolidated
net income for the second quarter was $975 million, or $1.04 per
share compared to second quarter 2005 net income of $1,015 million,
or $1.01 per share. Excluding significant items, earnings per share
were $1.01 in the second quarter 2006 compared to $.90 in the prior
year. See Schedule B for a summary of significant items. Second
quarter 2006 net income reflects higher local selling prices across
all regions, lower fixed costs, and the impact of higher energy and
ingredient costs. The current quarter net income also reflects
higher miscellaneous income and a lower income tax rate.
Consolidated net sales for the second quarter were $7.4 billion
versus $7.5 billion last year. On a comparable business basis,
sales were up 2 percent. For the quarter, total company volumes
increased 1 percent, reflecting increases in all regions except the
United States. Three Months Ended Percentage Change Due to: June
30, 2006 Local Currency (Dollars in billions) $ % Change* Price
Effect Volume U.S. $3.3 (1)% 2 - (3) Europe 2.0 - 1 (3) 2 Asia
Pacific 1.2 7 2 (2) 7 Canada & Latin America 0.9 9 2 2 5 Total
Consolidated Sales $7.4 2 2 (1) 1 * Percentages shown are on a
comparable business basis by excluding second quarter 2005 sales of
$202 million for former elastomers businesses transferred to The
Dow Chemical Company on June 30, 2005. Earnings Per Share The table
below shows the variances in second quarter 2006 earnings per share
(EPS) versus second quarter 2005, by major element: EPS ANALYSIS
2nd Quarter EPS - 2005 $1.01 2Q'05 Significant items (see Schedule
B) .11 $.90 Local prices .11 Volume .01 Variable costs (.15) Fixed
costs .03 Currency/Misc. income .04 Lower shares net of higher
interest .05 Tax Rate .02 Subtotal 1.01 2Q'06 Significant item (see
Schedule B) .03 EPS - 2006 $1.04 Improved local pricing and higher
volumes offset a significant portion of higher raw material costs.
Fixed cost productivity, measured as a percent of sales, improved
70 basis points versus last year, reflecting an $80 million
year-over-year reduction in total fixed costs. After adjusting for
currency effects, volume and portfolio changes, after-tax fixed
costs were $.03 per share lower than last year. Business Segment
Performance Segment pretax operating income (PTOI) for second
quarter 2006 was $1.5 billion, 6 percent below last year. PTOI
excluding significant items was essentially flat. Segment PTOI,
sales, and percentage changes versus second quarter 2005 are shown
in the tables below. Three Months Ended June 30 PRETAX OPERATING
INCOME % Change (Dollars in millions) 2006 2005 vs. 2005
Agriculture & Nutrition $428 $511 (16) % Coatings & Color
Technologies 222 188 18 Electronic & Communication Technologies
169 217 (22) * Performance Materials 193 190 2 Pharmaceuticals 200
192 4 Safety & Protection 310 283 10 Other (30) 7 (529) **
Total $1,492 $1,588 (6) % * 2005 PTOI includes a $48 million gain
on the sale of Photomasks. ** 2005 includes a $39 million gain on
the disposition of a Textiles & Interiors affiliate. Percentage
Three Months Ended Change Due to: SEGMENT SALES* June 30 U.S. $
(Dollars in billions) $ % Change Price Volume Agriculture &
Nutrition $2.0 (4) (1) (3) Coatings & Color Technologies 1.6 2
1 1 Electronic & Communication Technologies 1.0 3 1 2
Performance Materials 1.7 6 3 3 Safety & Protection 1.4 3 3 - *
Segment sales include inter-segment transfers and a pro rata share
of affiliates' sales. Percentages shown for Performance Materials
are after excluding second quarter 2005 sales of $202 million for
former elastomers businesses transferred to The Dow Chemical
Company on June 30, 2005. Following are summaries of second quarter
2006 performance for the business segments. Additional information
on segment performance is available on the DuPont Investor Center
at http://www.dupont.com/. Agriculture & Nutrition -- PTOI
decreased $83 million with current quarter earnings of $428 million
versus $511 million in the prior year, primarily due to lower crop
protection sales and higher cost of goods sold. -- Second quarter
sales of $2.0 billion were down 4 percent. Higher Pioneer seed
sales of 3 percent, including share gain in soybeans, were more
than offset by lower crop protection volumes and prices. -- During
the quarter, the company licensed rights to several of its pipeline
candidates and recorded income of $30 million. Coatings & Color
Technologies -- PTOI was $222 million versus prior year PTOI of
$188 million. Earnings improvement was broad-based across the
titanium dioxide, refinish, OEM and advanced coatings product
lines. PTOI margins increased to 13.6% and fixed costs declined. --
Second quarter sales were $1.6 billion, up 2 percent reflecting
higher local prices in all product lines. -- Cost reductions and
consolidation of facilities as part of the transformation program
for the coatings unit remain on track. Electronic &
Communication Technologies -- PTOI was $169 million versus $217
million in the prior year. 2005 included a $48 million gain on the
sale of photomasks. Higher earnings in electronic materials were
offset by higher costs in other product lines. -- Second quarter
sales were $1.0 billion, up 3 percent on higher volumes. Key growth
segments include photovoltaics, semiconductor fabrication and wire
and cable. Performance Materials -- PTOI was $193 million versus
$190 million in 2005. Higher selling prices, increased volumes and
lower fixed costs more than offset significantly higher raw
material costs, a negative currency impact, and the absence of
earnings from businesses transferred to The Dow Chemical Company.
PTOI margins increased to 11.1%. -- Second quarter sales of $1.7
billion increased 6 percent on a comparable business basis. Sales
increased in all regions and volume growth was strong in most
market segments. Safety & Protection -- PTOI was $310 million
versus $283 million in the prior year, largely as a result of sales
growth across all business units while holding fixed costs flat.
PTOI margins increased to 21.6% -- Second quarter sales of $1.4
billion were up 3 percent, reflecting higher USD prices. -- Demand
remained firm across major markets such as construction,
electrical, industrial and medical. Outlook For the second half,
the company expects to earn about $.91 per share before significant
items. This is nearly double the $.46 per share earned in the
second half of last year, which was adversely affected by
hurricanes. The company anticipates that continued pricing strength
and new product introductions, combined with fixed cost control and
modest volume growth, will more than offset higher energy and
ingredient costs. The company expects its 2006 reported earnings to
be about $2.83 per share. The company reaffirms its full-year 2006
outlook of about $2.85 per share, excluding significant items of
$.02 per share. This is 22 percent higher than 2005 earnings per
share of $2.34. "Our first half performance provides more positive
momentum for our company," Holliday said. "While we expect
challenges, we are determined to deliver significantly higher
earnings in the second half compared to last year. We will continue
to rapidly advance and commercialize our technology pipelines and
execute our performance improvement initiatives." Use of Non-GAAP
Measures Management believes that measures of income excluding
significant items ("non-GAAP" information) 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 Schedule E. DuPont is a science 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, nutrition, electronics, communications,
safety and protection, home and construction, transportation and
protective apparel. 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. E. I. DU PONT DE
NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE A Three
Months Ended Six Months Ended CONSOLIDATED INCOME STATEMENT June
30, June 30, (Dollars in millions, except per share) 2006 2005 2006
2005 NET SALES $7,442 $7,511 $14,836 $14,942 Other Income, Net (a)
397 611 667 1,006 Total 7,839 8,122 15,503 15,948 Cost of Goods
Sold and Other Operating Charges(b) 5,229 5,220 10,565 10,271
Selling, General and Administrative Expenses 853 866 1,644 1,673
Amortization of Intangible Assets 56 57 115 114 Research and
Development Expense 328 339 641 652 Interest Expense 119 120 233
224 Separation Charges - Textiles & Interiors(c) - (39) - (39)
Total 6,585 6,563 13,198 12,895 INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS(d) 1,254 1,559 2,305 3,053 Provision for Income
Taxes(e) 278 517 510 1,026 Minority Interests in Earnings of
Consolidated Subsidiaries 1 27 3 45 NET INCOME $975 $1,015 $1,792
$1,982 BASIC EARNINGS PER SHARE OF COMMON STOCK (f) $1.05 $1.02
$1.94 $1.99 DILUTED EARNINGS PER SHARE OF COMMON STOCK (f) $1.04
$1.01 $1.92 $1.97 DIVIDENDS PER SHARE OF COMMON STOCK $0.37 $0.37
$0.74 $0.72 NOTES TO CONSOLIDATED INCOME STATEMENT (a) Year-to-date
2006 includes a reversal of accrued interest of $7 ($4 after-tax)
associated with the favorable settlement of certain prior year tax
contingencies which had been previously reserved. Second quarter
2005 includes a gain of $23 resulting from the disposition of
certain assets of DuPont Dow Elastomers LLC (DDE) to The Dow
Chemical Company, a $28 benefit related to interest on certain
prior year tax contingencies, and a gain of $48 resulting from the
sale of the company's equity interest in DuPont Photomasks Inc. (b)
Year-to-date 2006 includes a restructuring charge of $135 ($98
after- tax) in the Coatings & Color Technologies segment in
connection with the company's plans to close and consolidate
certain manufacturing and laboratory sites within the segment. The
charge consists of employee separation charges, primarily in
Europe, for approximately 1,300 employees and other exit costs.
Second quarter 2005 includes a charge of $34 related to the
shutdown of an Elastomers manufacturing facility in the United
States. (c) Second quarter 2005 includes a net gain of $39 relating
to the disposition of three equity affiliates associated with the
ongoing separation of Textiles & Interiors, partly offset by
other separation costs. (d) Second quarter 2005 includes $14 of
operating income related to certain DDE assets that were disposed
of on June 30, 2005. (e) Second quarter 2006 includes a tax benefit
of $31 associated with an increase in the deferred tax assets of a
European subsidiary for a tax basis investment loss recognized on
the local tax return. Year-to-date 2006 includes the reversal of
$44 of income taxes associated with favorable settlement of certain
prior-year tax contingencies which had been previously reserved.
Second quarter 2005 includes a net tax benefit of $24 related to
certain prior year tax contingencies previously reserved. (f)
Earnings per share are calculated on the basis of the following
average number of common shares outstanding: Three Months Ended Six
Months Ended June 30 June 30 Basic Diluted Basic Diluted 2006
922,227,761 931,953,934 921,723,199 930,892,168 2005 996,025,680
1,002,809,399 996,164,219 1,004,506,893 E. I. DU PONT DE NEMOURS
AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE B SIGNIFICANT
ITEMS (Dollars in millions, except per share) Pretax After-Tax ($
Per Share) 2006 2005 2006 2005 2006 2005 1st Quarter - Total $(128)
- $(50) - $(.05) - 2nd Quarter: DDE - Related Items Gain on Sale of
Assets $23 $15 Operating Income from Assets Sold 14 10 Employee
Separation Costs (34) (23) Total 3 2 Textiles & Interiors
Separation Charges 39 26 $.03 Sale of Photomasks Stock 48 31 .03
Corporate Tax - Related Items 28 $31 52 $.03 .05 2nd Quarter Total
$ - $118 $31 $111 $.03 $.11 SIGNIFICANT ITEMS BY SEGMENT (Dollars
in millions on pretax basis) Three Months Ended Six Months Ended
June 30, June 30, 2006 2005 2006 2005 Agriculture & Nutrition
$- $- $- $- Coating & Color Technologies - - (135) - Electronic
& Communication Technologies - 48 - 48 Performance Materials -
3 - 3 Safety & Protection - - - - Textiles & Interiors - -
- - Other - 39 - 39 Total (excluding Corporate) $- $90 $(135) $90
See Notes to Consolidated Income Statement for additional details.
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE C Three Months Ended Six Months Ended CONSOLIDATED SEGMENT
INFORMATION (1) June 30, June 30, (Dollars in millions) 2006 2005
2006 2005 SALES (2) Agriculture & Nutrition $2,021 $2,102
$4,267 $4,458 Coatings & Color Technologies 1,630 1,601 3,112
3,105 Electronic & Communication Technologies 1,006 972 1,948
1,858 Performance Materials 1,735 1,836 3,450 3,621 Safety &
Protection 1,435 1,388 2,818 2,670 Other 16 13 29 25 Elimination of
Transfers (77) (82) (167) (160) Elimination of Equity Affiliate
Sales (324) (319) (621) (635) CONSOLIDATED NET SALES $7,442 $7,511
$14,836 $14,942 PRETAX OPERATING INCOME (LOSS) (PTOI)(3)
Agriculture & Nutrition $428 $511 $1,016 $1,268 Coatings &
Color Technologies(b) 222 188 237 349 Electronic &
Communication Technologies(a) 169 217 332 327 Performance
Materials(a)(b)(d) 193 190 330 401 Pharmaceuticals 200 192 369 351
Safety & Protection 310 283 579 514 Other(c) (30) 7 (56) (14)
Total Segment PTOI 1,492 1,588 $2,807 3,196 Exchange Gains and
Losses (4) 26 183 8 294 Corporate Expenses & Net Interest (264)
(212) (510) (437) INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS
$1,254 $1,559 $2,305 $3,053 (1) Certain reclassifications of
segment data have been made to reflect changes in organizational
structure. (2) Sales for the reporting segments include transfers
and a pro rata share of equity affiliate sales. (3) Refer to the
Notes to Consolidated Income Statement for additional information
on significant items included in the reported results. (4) Net
after-tax exchange activity for second quarter 2006 and 2005 were a
gain of $10 and a loss of $10, respectively. Gains and losses
resulting from the company's hedging program are largely offset by
associated tax effects. E. I. DU PONT DE NEMOURS AND COMPANY AND
CONSOLIDATED SUBSIDIARIES SCHEDULE D SELECTED INCOME STATEMENT DATA
(Dollars in millions, except per share) Three Months Ended Six
Months Ended June 30 June 30 2006 2005 % Chg. 2006 2005 % Chg.
Consolidated Net Sales $7,442 $7,511 (1)% $14,836 $14,942 (1)%
Segment Sales 7,843 7,912 (1) 15,624 15,737 (1) Segment PTOI 1,492
1,588 (6) 2,807 3,196 (12) Adjusted EBIT* 1,363 1,610 (15) 2,507
3,153 (20) Adjusted EBITDA* 1,696 1,935 (12) 3,177 3,810 (17)
Income Before Income Taxes and Minority Interests 1,254 1,559 (20)
2,305 3,053 (25) EPS - Diluted 1.04 1.01 3 1.92 1.97 (3) * See
Reconciliation of Non-GAAP measures (Schedule E). SCHEDULE E
RECONCILIATION OF NON-GAAP MEASURES (Dollars in millions)
Reconciliation of Adjusted EBIT / Adjusted EBITDA to Consolidated
Income Statement Three Months Ended Six Months Ended June 30, June
30, 2006 2005 2006 2005 Income Before Income Taxes and Minority
Interests $1,254 $1,559 $2,305 $3,053 Less: Minority Interest in
Earnings of Consolidated Subsidiaries(1) (1) (31) (3) (54) Add: Net
Interest Expense(2) 110 82 205 154 Adjusted EBIT 1,363 1,610 2,507
3,153 Add: Depreciation and Amortization (3) 333 325 670 657
Adjusted EBITDA $1,696 $1,935 $3,177 $3,810 (1) Excludes income
taxes. (2) Includes interest expense plus amortization of
capitalized interest less interest income. (3) Excludes
amortization of capitalized interest. Reconciliation of Earnings
Per Share (EPS) Three Months Ended Six Months Ended June 30, June
30, 2006 2005 2006 2005 Earnings Per Share before Significant Items
$1.01 $.90 $1.94 $1.86 Significant Items included in EPS .03 .11
(.02) .11 Reported EPS $1.04 $1.01 $1.92 $1.97 Reconciliation of
Earnings Per Share (EPS) Outlook Year Ended December 31, 2006 2005
Outlook Actual Earnings Per Share before Significant Items
Significant Items included in EPS: $2.85 $2.34 Coatings & Color
Technologies - Restructuring Charges (.10) - American Jobs Creation
Act - (.29) Hurricane Charges - (.09) Textiles & Interiors -
Separation Charges - .03 Sale of Photomasks Stock - .03 Corporate
Tax-Related Items .08 .05 Net Charge for Significant Items (.02)
(.27) Reported EPS $2.83 $2.07 Reconciliation of Base Income Tax
Rate to Effective Income Tax Rate Three Months Ended Six Months
Ended June 30, June 30, 2006 2005 2006 2005 Income Before Income
Taxes and Minority Interests $1,254 $1,559 $2,305 $3,053 Remove:
Significant Items - Charge/(Benefit) - (118) 128 (118) Net Exchange
Gains (26) (183) (8) (294) Income Before Income Taxes, Significant
Items, Exchange Gains and Minority Interests $1,228 $1,258 $2,425
$2,641 Provision for Income Taxes $278 $517 $510 $1,026 Remove:
(Expense)/Benefit Tax on Significant Items 31 (7) 109 (7) Tax on
Exchange Gains (16) (193) (20) (342) Provision for Income Taxes,
Excluding Taxes on Significant Items and Exchange Gains $293 $317
$599 $677 Effective Income Tax Rate 22.2% 33.2% 22.1% 33.6% Base
Income Tax Rate 23.8% 25.2% 24.7% 25.6% Reconciliation of Fixed
Cost as a Percent of Sales Three Months Ended Six Months Ended June
30, June 30, 2006 2005 2006 2005 Total Charges and Expenses -
Consolidated $6,585 $6,563 $13,198 $12,895 Income Statement Remove:
Interest Expense 119 120 233 224 Fixed Cost - Textiles &
Interiors - 8 - 18 Separation Charges - Textiles & Interiors -
(39) - (39) Variable Costs (1) 3,507 3,401 6,943 6,646 Significant
Items - Charge (2) - 34 135 34 Fixed Cost $2,959 $3,039 $5,887
$6,012 Consolidated Net Sales $7,442 $7,511 $14,836 $14,942 Fixed
Costs as a Percent of Sales 39.8% 40.5% 39.7% 40.2% (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. DATASOURCE: DuPont
CONTACT: Anthony Farina of DuPont, +1-302-774-4005, Web site:
http://www.dupont.com/
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