DuPont 4Q 2008 Earnings Conference Call
January 27, 2009
The contents of these slides and web site pages are protected under copyright. Any reproduction, copy, translation or use in whole or in part of any content, graphic or information depicted herein requires the prior written approval of E. I. du Pont de Nemours and Company. © 2009 DuPont. All rights reserved.
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
Regulation GThe attached charts include company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the company and allows investors to better evaluate the financial results of the company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies.
This data should be read in conjunction with the company’s fourth quarter earnings news release dated January 27, 2009, which will be furnished to the SEC on Form 8-K. Reconciliations of non-GAAP measures to GAAP results are available on the Investor Center website at www.dupont.com.
During the course of this presentation we may make forward-looking statements or provide forward-looking information. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as "expects," "anticipates,” "plans," "intends," "projects," and "indicates.” Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions. Some of those risk factors include economic conditions, competitive pressures, challenges associated with research and development, market acceptance of new products, and regulatory approval. We urge you to review DuPont's SEC filings, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, for a discussion of some of the factors which could cause actual results to differ materially. The Company does not undertake to update any forward-looking statements as a result of future developments or new information.
Forward Looking Statements
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
4Q & Full Year 2008 Financial Highlights$ Billions Except EPS
* Excludes significant items. See Schedule B in news release for a list of significant items. See Schedule C in news release for detailed reconciliations of non-GAAP measures.
4Q Change 2008 ChangeEPS
Reported ($.70) $2.20Underlying* ($.28) (149%) $2.78 (15%)
Segment Pre-Tax Operating Income/(Loss)*
($.1) (106%) $4.4 (14%)
Consolidated Net Sales $5.8 (17%) $30.5 4%Volume (20%) (5%)
Local prices 7% 7%
Currency impact (3%) 3%
Portfolio Chg & Other (1%) (1%)
4Q08 4Q07 2008 2007Base Tax Rate 45.2% 17.9% 20.4% 23.9%
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
Global Sales Regional Highlights
4Q 2008 Sales Distribution 4Q 2008 Sales Growth
*Refer to the company’s website for a definition of ‘emerging markets’.
U.S.34%
Canada3%
LatinAmerica
15%
DevelopedEurope
23% EmergingEMEA
6%
EmergingAsia
9%
DevelopedAsia10%
Region %
(17)
U.S. (15)
(17)
(16)
(19)
Emerging EMEA (26)
(10)
Emerging Asia
Latin America
Worldwide
Non-U.S.
Emerging Markets *
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
Global Sales Segment Highlights*
4Q 2008 Sales Distribution 4Q 2008 Sales Growth
PM21%
S&P22% Ag &
Nutrition21%
C&CT22%
E&CT14%
Segments Total%
USD Price Vol.
Port-folio Chg.
Ag & Nutrition (2) 8 (9) (1)
Coatings & ColorTechnologies (21) 1 (22) 0
Electronic & CommunicationTechnologies
(13) 1 (15) 1
Performance Materials (30) 3 (32) (1)
Safety & Protection (10) 7 (15) (2)
*Segment sales includes intercompany transfers
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
-$0.80
-$0.40
$0.00
$0.40
$0.80
$1.20
4Q07 Local Price VariableCosts
Volume LowerCapacity
Utilization
Fixed Costs Currency Taxes ExchangeLoss
Other 4Q08
* Reported 4Q07 EPS of $.60 includes a $.03 per share benefit for significant items.** Reported 4Q08 EPS loss of $.70 includes a $.42 per share charge for significant items.
See schedule B in the news release for a list of significant items.
4Q 2008 EPS Waterfall
$.60Reported
EPS*
$.57Underlying
EPS
$0.02
$0.44 ($0.48)
($0.07)
($0.55)
$0.09 ($0.04) ($0.05)
($0.21)($.28)
Underlying EPS
($.70)Reported
EPS**
1/26/2009 DUPONT CONFIDENTIAL
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Strong Balance Sheet
Ample liquidity• $3.7B in cash & investment
12/31/08, ~$.3B in CP, $2.7B in untapped credit lines
Low funding cost• A/A2 Long Term Credit Rating &
A1/P1 Short Term Credit Rating
Taking actions to maintain our strong position $0
$2
$4
4Q07 1Q08 2Q08 3Q08 4Q08
$ Bi
llion
0%
4%
8%
Avg
Cos
t of C
P Bo
rrow
ing
CP Balance CP Rate
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
2009 Earnings & Cash Guidance
Full Year Outlook
1Q EPS Outlook
$2.78
$0
$1
$2
$3
2008 2009E
$1.31
$0.00
$0.50
$1.00
1Q08 1Q09E
$2.00-$2.50
$.50-$.70Actions
• Deliver cost and capital productivity • Capture growth & value; agriculture
markets • Disciplined pricing on science-based
offerings• Leveraging our leading positions in
multiple end markets
Challenges• Global economic conditions & visibility in
many end markets • Pension non-cash earnings impact• Currency
2009 $2.5 Billion in Free Cash Flow Confirmed
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
($170)
($100)
($30)
PTOI (84%)*
4Q08 Segment Highlights 4Q08 Segment Highlights
Sales (2%)
Ag & NutritionAg & Nutrition
Strong Latin American season closes out 2008; Robust start to North American season
4Q08 Results+ Strong pricing+ Seed market share gains in Latin America– Crop protection seasonal patterns– Growth investments in seed– Commodity and other raw material costs
1H09 Outlook + Strong global seed volume and price+ Rynaxypyr® sales– Currency– Commodity prices and continued growth investments
$800
$1,000
$1,200
$1,400
4Q084Q07 4Q084Q07
* See schedule C and D in the news release for reconciliation of non-GAAP measures. 4Q07 PTOI included a $15 million gain from an asset divestiture.
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
4Q08 Segment Highlights 4Q08 Segment Highlights Coatings & Color TechnologiesCoatings & Color Technologies
Sales (21%)
4Q08 Results+ Titanium dioxide and refinish products global price– Global motor vehicle production (19%) **– Global destocking – Raw material & transportation cost– Low capacity utilization
1Q09 Outlook+ Cost reduction / working capital management – Global motor vehicle production (28%) **– Low capacity utilization & raw material costs
Unprecedented demand contraction hurts 4Q;Continued weakness in 1Q
$600
$1,000
$1,400
$1,800
4Q084Q07-$100
$0$100$200$300
4Q084Q07
PTOI (130%)*
* See schedule C and D in the news release for reconciliation of non-GAAP measures. * * Source: CSM WW Inc
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
4Q08 Results+ Strong sales of Tedlar® into photovoltaics+ Pricing primarily in fluoroproducts– Global slowdown; most markets & regions– Low capacity utilization & raw material costs
1Q09 Outlook + Cost actions & inventory management– Demand more challenging sequentially & YOY
electronics & fluoropolymers– Low capacity utilization & raw material costs– Currency
Sharp global downturn affects 4Q; Challenges continue in 1Q
Electronic & Communication TechnologiesElectronic & Communication Technologies
Sales (13%) PTOI (94%)*
$600
$800
$1,000
4Q084Q07$0
$80
$160
4Q084Q07
4Q08 Segment Highlights 4Q08 Segment Highlights
* See schedule C and D in the news release for reconciliation of non-GAAP measures. 4Q07 PTOI included a $28 million gain from a land sale
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4Q08 Results+ Fixed cost reductions+ Orange, TX plant site polymer units repaired– Weak demand in most major markets and regions– Product availability due to hurricane impact– Feedstock costs and low capacity utilization
1Q09 Outlook+ Raw material price decline start to impact late 1Q+ Operations/supply chain restoration post hurricane+ Cost reduction / working capital management– Motor vehicle demand– Global industrial demand down sequentially
Rapid demand decline; Intense focus on cost and capital
Performance MaterialsPerformance Materials
Sales (30%) PTOI (169%)*
$600
$1,000
$1,400
$1,800
4Q084Q07
-$200-$100
$0$100$200
4Q084Q07
4Q08 Segment Highlights 4Q08 Segment Highlights
* See schedule C and D in the news release for reconciliation of non-GAAP measures.
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
4Q08 Results+ Pricing primarily in aramids and chemical products– Double digit volume decline in most segments– U.S. construction market faced further weakness– Short-term effect from growth investments
1Q09 Outlook + Nomex® and parts of Kevlar® strong demand+ Lower raw material prices– Demand down sequentially in most product lines
U.S. housing starts reduced over 30% in 2008;Pressure continues in 2009
Sales (10%) PTOI (62%)*
$500
$1,000
$1,500
4Q084Q07$0
$150
$300
4Q084Q07
Safety & ProtectionSafety & Protection4Q08 Segment Highlights 4Q08 Segment Highlights
* See schedule C and D in the news release for reconciliation of non-GAAP measures.
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
2009 Directives
Drive Sales & Earnings• Deliver against segment specific targets
Reduce Costs• $730 million fixed cost reduction programs
Reduce Capital Spending• ~ $1.6 billion
Reduce Working Capital• $1 billion target
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Appendix
• Industrial chemical prices
• Total company volume and local pricing trends
• Fixed cost control
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved. Source: Bureau of Labor Statistics U.S. Producer Price Index of Industrial Chemicals
Industrial Chemical Prices
Sequential Price Level YOY % Change
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont Sales Volume Worldwide*
080706050403020100
151050
-5-10-15-20-25
1201151101051009590
* History excludes Textiles & Interiors
Yr/Yr % Change (Left)Volume Level 4qma (1999 = 100 Right)
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont Selling Prices Worldwide*
080706050403020100
10
8
6
4
2
0
-2
-4
120
115
110
105
100
95
Yr/Yr % Change (Left)Index 4qma (1999 = 100 Right)
* Prices in local currency terms(Adjusted for currency & history excludes Textiles & Interiors)
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© 2009 E.I. du Pont de Nemours and Company. All Rights Reserved.
35
40
45
50
55
1 Qtr 2 Qtr 3 Qtr 4 Qtr
20042005200620072008
Note: Data excludes significant items in all periods and has been adjusted for 2004 to exclude Textiles & Interiors.
Productivity Initiative Fixed Cost ControlFixed Costs as % of Consolidated Sales
45.2 44.6
42.541.0 41.2
35
45
2004 2005 2006 2007 2008
Quarterly Annually
Fixe
d C
ost %
of S
ales