DuPont 2011 Annual Report Download - page 29

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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 PTOI increased as the impact of the MECS acquisition and a favorable currency impact more than offset higher spending for growth initiatives and
higher raw material costs. The Kevlar® expansion at Cooper River, South Carolina was completed and began commercial supply at the end of 2011.
2010 versus 2009 The increase in sales volume reflects strong recovery and increased demand across all regions, led by EMEA and Asia Pacific, and all
markets, particularly in aramid and nonwoven products. Further penetration in the U.S. commercial construction markets led to higher sales as recovery in
global construction markets remained weak. Sales for consulting and training services improved modestly across most regions, led by Asia Pacific and
EMEA.
2010 PTOI and PTOI margin increases were primarily due to higher volume, particularly aramid and nonwoven products, and the absence of a net $45 million
restructuring charge in 2009, partially offset by higher spending for growth initiatives and higher raw material costs.
Outlook For 2012, sales are expected to benefit from improved global market conditions which are anticipated to recover in the second half 2012 with
demand for Kevlar ® , Nomex® and Tyvek ® products expected to increase across all regions and market segments. Sales related to the Sustainable Solutions
business are expected to increase due to clean technologies businesses and consulting growth in the areas of process safety management and sustainable
operations. Sales related to the Building Innovations business are expected to increase due to further penetration in commercial construction applications.
Earnings are expected to improve due to higher sales reflecting innovative growth through products such as Kevlar® AP, as well as continued productivity
actions.
PHARMACEUTICALS
(Dollars in millions) 2011 2010 2009
Segment sales $ — $ — $ —
PTOI $ 289 $ 489 $ 1,037
Decreases in PTOI reflect the expiration of certain patents related to Cozaar ® /Hyzaar®.
Outlook Earnings contributions to the company from the collaboration with Merck are expected to decline in 2012 to about $50 million.
Liquidity & Capital Resources
December 31,
(Dollars in millions) 2011 2010
Cash, cash equivalents and marketable securities $ 4,019 $ 6,801
Total debt 12,553 10,270
The company believes its ability to generate cash from operations and access to capital markets will be adequate to meet anticipated cash requirements to fund
working capital, capital spending, dividend payments, debt maturities and other cash needs. The company's liquidity needs can be met through a variety of
sources, including: cash provided by operating activities, cash and cash equivalents, marketable securities, commercial paper, syndicated credit lines, bilateral
credit lines, equity and long-term debt markets and asset sales. The company's current strong financial position, liquidity and credit ratings provide excellent
access to the capital markets. In addition, spending and capital productivity actions have been implemented. The company will continue to monitor the
financial markets in order to respond to changing conditions. Depending on these conditions, the proceeds of commercial paper may be invested in cash
equivalents or marketable securities.
Pursuant to its cash discipline policy, the company seeks first to maintain a strong balance sheet and second, to return excess cash to shareholders unless the
opportunity to invest for growth is compelling. Cash, cash equivalents and marketable securities provide primary liquidity to support all short-term
obligations. A substantial majority of the company's cash, cash equivalents and marketable securities is held by foreign subsidiaries and is considered to be
indefinitely reinvested and expected to be utilized to fund local operating activities and capital expenditure requirements. The company believes that it has
sufficient sources of domestic liquidity to further support its assumption that undistributed earnings at December 31, 2011 can be considered reinvested
indefinitely. The company has access to approximately $4.4 billion in unused credit lines with several major financial institutions,
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