DuPont 2011 Annual Report Download - page 23

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Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
Below is a summary of the net impact to each segment related to current and prior years restructuring activities:
(Dollars in millions) 2011 (Charges) and Credits 2010 (Charges)
and Credits 2009 (Charges)
and Credits
Electronics & Communications $ — $ 8 $ (37)
Industrial Biosciences (9) — —
Nutrition & Health (14) — 1
Performance Chemicals — 10 (54)
Performance Coatings 3 (6) (15)
Performance Materials (2) 16 (58)
Safety & Protection — 5 (45)
Other (28) 1 (2)
Total (Charges) Credits $ (50) $ 34 $ (210)
(Dollars in millions) 2011 2010 2009
PROVISION FOR INCOME TAXES $ 772 $ 659 $ 415
Effective income tax rate 18.0% 17.8% 19.0%
In 2011, the company recorded a tax provision of $772 million, reflecting an increase from 2010 largely due to pre-tax earnings growth, which was partially
offset by the impact associated with the company's policy of hedging the foreign currency-denominated monetary assets and liabilities of its operations.
The $244 million increase in 2010 from 2009 was largely due to an increase in pre-tax earnings and the impact associated with the company's policy of
hedging the foreign currency-denominated monetary assets and liabilities of its operations. These were partially offset by net tax benefits of $49 million
related to the adjustment of income tax accruals associated with settlements of tax contingencies related to prior years and $39 million for reversal of tax
valuation allowance related to the net deferred tax assets of a foreign subsidiary. The decrease in the 2010 effective tax rate compared to 2009 was primarily
due to favorable geographic mix of pre-tax earnings in low tax rate jurisdictions and the net tax benefits noted above.
See Note 5 to the Consolidated Financial Statements for additional details related to the provision for income taxes, as well as items that significantly impact
the company's effective income tax rate.
(Dollars in millions) 2011 2010 2009
NET INCOME ATTRIBUTABLE TO DUPONT $ 3,474 $ 3,031 $ 1,755
2011 versus 2010 Net income attributable to DuPont (earnings) for 2011 increased $443 million, or 15 percent versus 2010. The increase in earnings
principally reflects higher local selling prices, higher sales volume and currency benefits, partly offset by higher raw material, energy and freight costs,
increased spending for growth initiatives, and lower Pharmaceuticals income. See additional information above related to changes in earnings.
2010 versus 2009 Earnings for 2010 increased $1.3 billion, or 73 percent versus 2009. The increase principally reflects higher sales volume and selling
prices and the absence of a prior year restructuring charge, partly offset by higher non-cash pension costs and lower Pharmaceuticals income. See additional
information above related to changes in earnings.
Corporate Outlook
DuPont's full-year 2012 sales and earnings are expected to benefit from a strong agriculture economy, market-driven innovation and ongoing productivity,
partially offset by headwinds created by a stronger dollar and a higher tax rate. The company expects higher operating costs including an increase in raw
material, energy and freight costs, and plans to partly offset the impact of these increases with productivity programs for fixed costs reduction totaling $300
million.
The company plans to continue a differential level of capital expenditures and funding for research and development for businesses expected to have above-
average growth rates and margins. For 2012, targets have been set for capital expenditures totaling about
20