10-QPeriod: Q3 FY2011

EIDP, Inc. Quarterly Report for Q3 Ended Sep 30, 2011

Filed October 25, 2011For Securities:CTA-PBCTA-PA

Summary

E.I. du Pont de Nemours and Company (DuPont) reported strong financial results for the nine months ended September 30, 2011, driven significantly by the acquisition of Danisco A/S in May 2011. Net sales increased by 23% to $29.5 billion, and net income attributable to DuPont rose by 17% to $3.1 billion. This growth was fueled by a 15% increase in selling prices and a 4% increase in sales volume, with the Danisco acquisition contributing significantly to the portfolio change. The company successfully navigated integration challenges and has revised its full-year 2011 earnings outlook upward. Despite increased debt from financing the Danisco acquisition, DuPont's liquidity remains strong, supported by cash from operations and access to credit markets. The company continues to focus on key growth areas and productivity programs to maintain a strong financial position.

Financial Highlights

49 data points
Beta

Revenue

$8.14B

Net Income

$460.00M

5.7% Net Margin

EPS (Diluted)

$0.48

Total Assets

$47.79B

Cash & Equivalents

$2.75B

Free Cash Flow

$605.00M

Financial Statements
Beta
Revenue$8.14B
R&D Expenses$546.00M
SG&A Expenses$809.00M
Operating Expenses$7.85B
Operating Income$778.00M
Interest Expense$116.00M
Net Income$460.00M
EPS (Basic)$0.48
EPS (Diluted)$0.48
Shares Outstanding (Basic)932.36M
Shares Outstanding (Diluted)943.49M

Key Highlights

  • 1Net sales for the nine months ended September 30, 2011, increased by 23% to $29.5 billion, compared to $24.1 billion in the prior year.
  • 2Net income attributable to DuPont for the nine months ended September 30, 2011, increased by 17% to $3.1 billion, compared to $2.7 billion in the prior year.
  • 3The acquisition of Danisco A/S in May 2011 was a major event, contributing significantly to sales growth and expanding DuPont's footprint in industrial biotechnology and specialty food ingredients.
  • 4Third-quarter earnings growth was notably strong, driven by the Titanium Technologies business due to high demand and tight global supply for titanium dioxide.
  • 5The company revised its full-year 2011 earnings outlook upwards, now expecting $3.64 - $3.74 per share.
  • 6Total debt increased significantly due to financing the Danisco acquisition, rising from $10.3 billion to $15.5 billion.
  • 7Cash provided by operating activities for the nine months increased substantially to $431 million, up from $35 million in the prior year, indicating improved operational cash generation.

Frequently Asked Questions

The primary driver was the acquisition of Danisco A/S, which was completed in May 2011. This acquisition significantly boosted net sales, contributing to a 23% increase year-over-year. The overall growth was further supported by a 15% increase in selling prices and a 4% increase in sales volume.

The Danisco acquisition significantly increased DuPont's debt. Total debt rose from $10.3 billion at the end of 2010 to $15.5 billion by September 30, 2011. This increase was primarily due to borrowings to finance the acquisition and the assumption of Danisco's existing debt.

DuPont has revised its full-year 2011 earnings outlook upwards to $3.64 - $3.74 per share. This positive outlook is based on the strong performance in the third quarter, particularly driven by the Titanium Technologies business. However, the company anticipates challenges in the fourth quarter, including slowing global growth and potential destocking.

Yes, there are several notable charges. The company incurred transaction and integration costs related to the Danisco acquisition, including a $125 million after-tax charge for the fair value step-up of inventories. Additionally, there was a $75 million charge related to Imprelis® herbicide claims and a $50 million charge for a milestone payment on a Pioneer licensing agreement. Restructuring charges related to Danisco integration were also recorded.