DuPont 2006 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2006 DuPont annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, continued
2005 PTOI was $862 million versus $769 million in 2004, up 12 percent. The improvement in 2005 PTOI
reflects higher USD selling prices partially offset by lower volumes and higher raw material costs. 2004 results
also included restructuring charges of $34 million. In addition, during 2005 the segment continued to increase
research spending and drive productivity improvements while managing overall fixed costs to a level
consistent with 2004.
Outlook In 2007, the segment anticipates modest earnings growth through increased Pioneer corn value
offerings, including stacked traits and seed treatments in the U.S. and Canada and corn volumes in key
international markets. Pioneer also expects continued market share gains in key soybean markets including the
U.S., Canada and Brazil. The segment’s introduction of new crop protection products is projected to drive
volume gains. Segment margins will be challenged by higher production and raw material costs and continued
investments in research, which will drive long-term profitability.
Technology will continue to play an important role for Agriculture & Nutrition. Pioneer will build on their
global product offerings with the addition of 21 new soybean varieties and 90 new Pioneer»brand corn
hybrids.
COATINGS & COLOR TECHNOLOGIES
Segment Sales
(Dollars in billions)
PTOI
(Dollars in millions)
2006 $6.3 $795
2005 6.1 528
2004 5.9 698
Coatings & Color Technologies is one of the world’s leading automotive coatings suppliers and the world’s
largest manufacturer of titanium dioxide white pigments. Products offered include high performance liquid and
powder coatings for automotive OEMs, the automotive aftermarket (known as refinish) and general industrial
applications, such as coatings for heavy equipment, pipes and appliances and electrical insulation. The
company markets its refinish products using the DuPont
TM
, Standox», Spies Hecker»and Nason»brand names.
Standox»and Spies Hecker»are focused on the high-end refinish markets, while Nason»is primarily focused
on economy coating applications. The segment’s broad line of DuPont
TM
Ti-Pure»titanium dioxide products, in
both slurry and powder form, serve the coatings, plastic and paper industries.
The segment’s titanium tetrachloride business has moved from a startup business to an established, growing
venture, shipping product globally. In October, the business publicly announced a $30 million investment in
additional titanium tetrachloride facilities at its titanium dioxide plant in Tennessee. When completed in mid-
summer 2008, these facilities will supply up to 100 million pounds of high purity titanium tetrachloride
annually to Allegheny Titanium’s new titanium metal plant in Utah. The business also launched and began
commercial production in 2006 of its own titanium metal powder growth initiative.
The key markets in which Coatings & Color Technologies operates continued to grow in 2006, with more
significant growth in the Latin America and Asia Pacific regions. A key driver of the segment’s sales growth
in 2006 was the completion of clean-up and repair of damage from Hurricane Katrina at its DeLisle,
Mississippi titanium dioxide plant. The facility began a phased in restart in January 2006, returning to full
operation by the end of the second quarter. During 2006, the segment was able to return the DeLisle plant
back to full operations and regain market share lost during the hurricane related outage in 2005. Global
demand for titanium dioxide white pigment was strong in 2006 with global market volumes up about 5 percent
from 2005.
32
Part II