10-QPeriod: Q2 FY2013

EIDP, Inc. Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 23, 2013For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) reported for the quarter ending June 29, 2013, with net sales of $9.844 billion, a slight decrease of 0.7% from the same period last year. Net income attributable to DuPont was $1.030 billion, or $1.11 per diluted share, a decrease from $1.166 billion, or $1.23 per diluted share, in the prior year's quarter. This decline was influenced by lower segment Pre-Tax Operating Income (PTOI), particularly in Performance Chemicals, which saw a significant reduction due to lower titanium dioxide prices. However, the company completed the sale of its Performance Coatings business in February 2013, generating a substantial pre-tax gain of $2.682 billion, which significantly boosted the net income for the six-month period to $4.389 billion. DuPont also announced on July 23, 2013, that it is exploring strategic alternatives for its Performance Chemicals segment. The company's balance sheet shows robust liquidity with cash and cash equivalents of $6.685 billion at quarter-end.

Key Highlights

  • 1Net sales for the quarter were $9.844 billion, a slight decrease of 0.7% year-over-year, attributed to lower prices, especially in Performance Chemicals, despite a 1% increase in total company volume.
  • 2Net income attributable to DuPont decreased to $1.030 billion ($1.11/share) for the quarter, compared to $1.166 billion ($1.23/share) in the prior year.
  • 3The sale of the Performance Coatings business in February 2013 resulted in a significant pre-tax gain of $2.682 billion, substantially increasing net income for the six-month period to $4.389 billion.
  • 4DuPont announced it is exploring strategic alternatives for its Performance Chemicals segment, which includes DuPont Titanium Technologies and DuPont Chemicals & Fluoroproducts.
  • 5The company's liquidity remains strong, with cash and cash equivalents totaling $6.685 billion as of June 30, 2013, up from $4.284 billion at the end of 2012.
  • 6Operating cash flow for the first six months of 2013 was negative at $(2.631) billion, a significant decrease from $(1.117) billion in the prior year, largely due to lower cash earnings and higher working capital in the Agriculture segment.
  • 7Diluted earnings per share from continuing operations were $1.10 for the quarter, down from $1.15 in the prior year, while for the six-month period, it was $2.58, down from $2.63.

Frequently Asked Questions

The primary driver for the decrease in quarterly net income was the decline in segment Pre-Tax Operating Income (PTOI), particularly in the Performance Chemicals segment, which was significantly impacted by lower global prices for titanium dioxide. This was partially offset by a reduction in other operating charges, mainly due to lower Imprelis® herbicide claims and other litigation costs.

The sale of the Performance Coatings business in February 2013 generated a substantial pre-tax gain of $2.682 billion. This gain significantly boosted the net income for the six-month period to $4.389 billion, making it a key contributor to the year-to-date financial performance.

DuPont's liquidity position remains strong. As of June 30, 2013, the company reported cash and cash equivalents of $6.685 billion, an increase from $4.284 billion at the end of 2012. The company also has access to approximately $4.3 billion in unused credit lines, indicating ample resources to meet its financial obligations.

DuPont announced on July 23, 2013, that it is exploring strategic alternatives for its Performance Chemicals segment. This segment includes DuPont Titanium Technologies and DuPont Chemicals & Fluoroproducts. The alternatives may include a full or partial separation of these businesses through a spin-off, sale, or other transaction.