8-KFinancial Events

EIDP, Inc. 8-K Report, Exit or Disposal Costs (May 7, 2009)

Filed May 7, 2009For Securities:CTA-PBCTA-PA

Summary

EIDP, Inc. (reporting as CTA-PB) filed an 8-K on May 6, 2009, detailing a significant restructuring initiative undertaken by DuPont in response to the global economic recession. The company announced plans to reduce its asset and fixed cost bases across several key segments, including Coatings & Color Technologies, Electronics & Communication Technologies, Performance Materials, and Safety & Protection. This strategic move aims to bolster long-term competitiveness and maximize pretax operating income amidst a challenging market environment, particularly in the transportation, construction, and industrial sectors. This restructuring will result in substantial one-time pretax charges to earnings in the second quarter of 2009, estimated between $340 million and $390 million. These charges are primarily composed of severance and related benefits costs (approximately $225 million) and asset write-offs (approximately $145 million). Additionally, DuPont anticipates incurring around $35 million in other costs, including dismantlement and removal expenses and accelerated depreciation, spread over the remainder of 2009 and 2010. The company expects to eliminate approximately 2,000 positions as part of this initiative, which is projected to be substantially completed by 2010. The anticipated future cash expenditures for this program are in the range of $230 million to $260 million.

Key Highlights

  • 1DuPont is implementing a significant restructuring initiative due to the global economic recession.
  • 2The initiative targets asset and fixed cost reduction in Coatings & Color Technologies, Electronics & Communication Technologies, Performance Materials, and Safety & Protection segments.
  • 3Expect one-time pretax charges of $340 million to $390 million in Q2 2009.
  • 4Charges include approximately $225 million for severance/benefits and $145 million for asset write-offs.
  • 5Approximately 2,000 positions will be eliminated.
  • 6The restructuring is expected to be substantially complete by 2010.
  • 7Future cash expenditures related to this initiative are estimated between $230 million and $260 million.

Frequently Asked Questions

DuPont is undertaking this restructuring primarily in response to the "protracted global economic recession" and the resulting "steep and extended downturn" in key markets like transportation, construction, and industrial sectors.

DuPont expects to incur one-time pretax charges to earnings in the second quarter of 2009 ranging from $340 million to $390 million. This includes costs for severance, related benefits, and asset write-offs.

The company plans to eliminate approximately 2,000 positions through severance as part of this initiative.

The initiative is expected to be substantially complete by 2010.