What was the primary driver of the sales decline in the first quarter of 2002?

The primary drivers for the 11% year-over-year sales decline were a 2% decrease in sales volume across most segments and a 4% decrease in local selling prices worldwide. Additionally, currency exchange rate fluctuations negatively impacted sales by an estimated 4% in regions outside the United States.

How did the adoption of SFAS No. 142 impact the financial results?

The adoption of SFAS No. 142 on January 1, 2002, eliminated the amortization of goodwill and indefinite-lived intangible assets. This change removed $34 million in goodwill amortization and $7 million in amortization of other intangibles (pre-tax) that would have been expensed in Q1 2001, positively affecting reported net income and EPS. However, the standard also requires an impairment test for goodwill, and preliminary indications suggest potential impairments in two reporting units.

What significant one-time items affected the quarter's earnings?

Several significant one-time items impacted the quarter. These included a $63 million exchange loss due to the conversion of U.S. dollar receivables to Argentine pesos, a $39 million charge to withdraw from a polyester joint venture in China (partially offset by a $30 million gain from exiting a nylon joint venture), and a $19 million cumulative effect adjustment from the adoption of SFAS No. 133 in the prior year. The previous year also included charges related to the sale of Pioneer inventories.

How is the company managing its liquidity and debt?

DuPont's consolidated net debt increased by $2.2 billion during the first quarter of 2002, primarily due to $1.07 billion in cash used for operations (driven by a large tax payment and working capital needs) and $273 million for capital expenditures and investments. While cash used for operations was significant, management believes the company's ability to generate cash and its access to debt markets will be adequate to meet future cash requirements, including working capital, capital spending, and dividends. The company also completed its share repurchase program and has a new $2 billion buyback plan authorized.

CTA-PB/CTA-PA 10-Q Quarterly Report Q1 FY2002

Summary

E.I. du Pont de Nemours and Company (DuPont) reported consolidated sales of $6.14 billion for the first quarter of 2002, a decrease of 11% from $6.86 billion in the same period of 2001. This decline was primarily driven by lower sales volumes across most segments and a decrease in local selling prices, further impacted by a strong U.S. dollar. Net income for the quarter was $479 million, slightly down from $495 million in the prior year, resulting in diluted earnings per share of $0.48, compared to $0.47 in Q1 2001. The company adopted SFAS No. 142, eliminating goodwill amortization, which positively impacted reported earnings. However, the adoption of this standard also necessitates a goodwill impairment test by the end of 2002, with preliminary indications of potential impairment in two reporting units. Significant one-time items, including an exchange loss related to Argentina and charges from exiting joint ventures, also affected reported results. Management anticipates sequential volume improvements and year-over-year cost benefits in the second quarter, but expects these to be offset by currency headwinds and pricing pressures.

Key Highlights

1Consolidated sales decreased 11% year-over-year to $6.14 billion, impacted by lower volumes and prices, and currency exchange rates.
2Net income slightly decreased to $479 million, with diluted EPS at $0.48, compared to $495 million and $0.47 in Q1 2001.
3Adoption of SFAS No. 142 eliminated goodwill amortization, but a goodwill impairment test is pending with potential charges identified.
4The company experienced significant one-time items, including a $63 million exchange loss from Argentina and charges related to exiting joint ventures.
5Cash flow from operations was negative $1.07 billion, heavily influenced by a large tax payment related to the DuPont Pharmaceuticals divestiture and seasonal working capital increases.
6The company completed its previously authorized share repurchase program and continued to manage debt levels, with net debt increasing significantly.
7Strategic actions are underway, including the planned separation of the Textiles & Interiors segment and a settlement of intellectual property disputes with Monsanto.

EIDP, Inc. Quarterly Report for Q1 Ended Mar 31, 2002

Summary

Key Highlights

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