DuPont 2008 Annual Report Download - page 31

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Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, continued
2008 PTOI was $326 million as compared to $840 million in 2007. Year-over-year decline in PTOI reflects the
restructuring charge described above, as well as the impact of higher raw material costs and lower volumes, partially
offset by higher prices and strong sales in emerging markets.
2007 versus 2006 Sales of $6.6 billion were up 5 percent, reflecting about 4 percent higher USD selling prices for
the segment, as well as a 1 percent increase in volume. USD selling prices were higher across a majority of the
segment’s products. The increase in volume was primarily attributable to the sales of titanium dioxide, particularly in
Europe and Asia Pacific. This increase was partially offset by declines in volume for products sold to OEM
producers, primarily in North America and Europe. Volumes for sales of refinish products were relatively flat as
compared to 2006.
PTOI in 2007 of $840 million increased from $817 million in 2006. The PTOI improvement was primarily the result of
higher revenue driven by higher USD selling prices and benefits realized from the 2006 restructuring program,
partially offset by higher raw material and transportation costs. PTOI in 2006 included a net charge of $132 million for
restructuring and $30 million primarily for accelerated depreciation related to the transformation plan that was
initiated in the first quarter 2006 (see Note 5 to the Consolidated Financial Statements). These charges were
partially offset by $142 million in insurance proceeds, primarily related to the hurricane damages incurred in 2005.
Outlook Sales in 2009 are expected to decrease, reflecting continued weakness due to the global recession.
Industry demand for titanium dioxide is expected to be lower in 2009, with continued weakness in North American
and European construction and motor vehicle markets. Conditions in the global coatings industry will continue to
provide a challenging operating environment in 2009. Modest declines are expected for refinish markets in mature
economies while modest growth is expected in emerging markets. Profitability of coatings sold to OEM producers is
highly dependent upon volume at specific plants the company services. Global motor vehicle industry builds in 2009
are expected to be down from 2008 with all regions showing declines. Lower raw material cost, fixed cost benefits
from the company’s 2008 restructuring program and productivity initiatives are expected to partially offset the impact
of lower volumes.
ELECTRONIC & COMMUNICATION TECHNOLOGIES
Segment Sales
(Dollars in billions)
PTOI
(Dollars in millions)
2008 $4.0 $436
2007 $3.8 $594
2006 $3.6 $577
Electronic & Communication Technologies provides a broad range of advanced materials for the electronics
industry, inks and flexographic printing systems, and a wide range of fluoropolymer and fluorochemical products.
The segment also continues to pursue development activities related to displays and alternative energy.
In the electronics industry, DuPont is a leading supplier of electronic and advanced display materials. The company
offers a broad portfolio of ceramic, flexible and rigid organic circuit materials; materials for semiconductor fabrication
and packaging; and a wide range of products for advanced displays. The segment’s products enable increased
functionality and lower costs for electronic and communication devices.
Electronic & Communication Technologies is the market leader in flexographic printing and black pigmented ink
serving the packaging and commercial printing industries. Its offerings include DuPont
TM
Cyrel»and Cyrel»FAST
flexographic printing systems. DuPont is the world’s leading supplier of solvent-free thermal flexographic
platemaking technologies, with a broad array of patented products and equipment.
The segment also includes a portfolio of industrial and specialty fluorochemicals and fluoropolymers that are sold
into the refrigeration, insulation, aerosol propellants, fire extinguishants, telecommunications, aerospace,
automotive, electronics, chemical processing and housewares industries.
Electronic & Communication Technologies leverages DuPont’s strong materials and technology base to target
growth opportunities in electronics, fluoropolymers, fluorochemicals, packaging graphics, ink-jet and photovoltaic
29
Part II