DuPont 2011 Annual Report Download - page 27

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Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
2011 versus 2010 Sales increased across all regions and market segments. The increase in sales reflects favorable pricing for titanium dioxide and
fluoropolymers, as well as pass-through pricing of higher raw material costs for fluorochemicals and industrial chemicals.
2011 PTOI and PTOI margin improved driven by the higher selling prices and fixed cost productivity.
2010 versus 2009 Broad-based market recovery led to sales increases in all markets and all regions, most significant in Asia Pacific, reflecting strong
demand for titanium dioxide, fluoropolymers and refrigerants, with continuing adoption of ISCEON ® as a preferred retrofit to R22 refrigerant. Higher selling
prices reflect favorable pricing for titanium dioxide, fluorochemicals and fluoropolymers and pass-through of higher raw material costs for industrial
chemicals.
2010 PTOI and PTOI margin increases were driven by higher volume, higher selling prices, improved productivity and the absence of a net $54 million
restructuring charge in 2009.
Outlook Sales are expected to increase in 2012 as a result of the continued demand for titanium dioxide, fluoropolymers and industrial chemicals and
higher selling prices. Segment earnings are also expected to increase consistent with the higher sales volume, higher selling prices and continued productivity
actions.
PERFORMANCE COATINGS
(Dollars in millions) 2011 2010 2009
Segment sales $ 4,281 $ 3,806 $ 3,429
PTOI $ 271 $ 249 $ 69
PTOI margin 6% 7% 2%
2011 2010
Change in segment sales from prior period due to:
Selling price 10% 2%
Volume 2% 9%
Portfolio / Other —% —%
Total change 12% 11%
2011 versus 2010 The segment experienced continued recovery with auto builds across the globe increasing 3 percent in 2011, primarily driven by an
improvement of 9 percent in North America. Higher selling prices reflect pricing actions across all regions and market segments to offset higher raw material
costs, along with a favorable currency impact. Volume growth primarily reflects increased demand for OEM motor vehicle coatings and industrial coatings,
particularly in the North American heavy duty truck market.
2011 PTOI increase primarily reflects the impact of higher selling prices along with a favorable currency impact. PTOI margin compression resulted from raw
material costs increasing at a higher rate than selling prices which offset fixed cost productivity actions.
2010 versus 2009 The segment experienced strong recovery across most markets and regions from the global economic recession in the automotive industry
in 2009, most significant in North America and Europe. Higher sales volume reflects recovery in global automotive OEM markets and strong demand in
industrial coatings, particularly in the North American and European heavy duty truck markets. Higher selling prices primarily reflect pricing actions taken to
offset the increase in raw material costs.
2010 PTOI and PTOI margin increases primarily reflect the impact of higher volume, particularly in industrial coatings and the OEM market, improved
productivity and higher selling prices, which were partially offset by higher raw material costs.
Outlook For 2012, the segment expects sales to increase with continued recovery in the global automotive and heavy duty truck markets. The industry
production forecast for automotive builds in 2012 is a 4 percent global increase, reflecting continued recovery in North America and continued growth in Asia
Pacific. PTOI is expected to improve due to continued productivity efforts and pricing actions in all regions and market segments.
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