DuPont 2009 Annual Report Download - page 30

Part II
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued
meet one of the fastest growing segments of the solar energy market, DuPont Apollo Ltd., a wholly-owned subsidiary of
the company, began producing thin-film photovoltaic modules in 2009. Beyond photovoltaics, the segment is investing
in its broad portfolio of materials for semiconductor fabrication and packaging, as well as its innovative materials for
circuit applications, to address critical needs of semiconductor and electronics manufacturers. In the market for flat
panel displays, the segment continues to be a leading materials supplier for plasma displays. In addition, the segment
continues to invest in developing materials technologies for organic light-emitting diode (OLED) displays. In packaging
graphics, products such as CyrelFAST have rapidly grown, solidifying the segment’s market leadership position.
DuPont is also expanding its leadership position in black pigmented inks and investing in color pigmented inks for
network printing applications.
In January 2010, the segment announced an investment of $175 million to complete the multi-phase expansion of its
high-performance DuPont Tedlar PV2001 series oriented film production line. This investment is in addition to
$120 million in capacity expansions, announced in August 2009 for raw materials used to make the film, bringing the
total commitment of these two phases to $295 million. Tedlar films serve as the critical component of photovoltaic
backsheets, providing long-term durability and performance for photovoltaic modules in all-weather conditions.
2009 versus 2008 Sales of $1.9 billion were down 13 percent, reflecting 11 percent volume decline and 2 percent
lower USD selling prices. The lower volumes reflect the effect of the global economic recession which impacted sales
for products across all key markets. However, sales volumes improved throughout the year, most significantly in Asia
Pacific, where sales were essentially flat when compared to 2008. The lower USD selling prices were mainly due to
contractual pass-through of lower precious metal prices.
PTOI was $87 million compared to $251 million in prior year. The decline in PTOI was primarily due to the impact of
lower sales, lower income from affiliates, and higher charges associated with low capacity utilization of production
lines.
2008 versus 2007 Sales of $2.2 billion were up 3 percent, reflecting 4 percent higher USD selling prices, partially
offset by a 1 percent decline in volume. The higher USD selling prices mainly reflect pricing actions to offset the
increases of raw materials costs and favorable currency impacts in Europe and Asia Pacific. The lower volumes reflect
decreased demand for products across the segment key markets, mostly towards the end of 2008, partially offset by
increased demand for photovoltaic products and higher sales in emerging markets.
PTOI was $251 million as compared to $314 million in 2007. This decline was mainly due to the impact of higher raw
materials cost, lower sales volumes and the $37 million charge related to the 2008 restructuring program.
Outlook For 2010, sales for electronic materials, photovoltaics and packaging graphics products are expected to
increase as markets recover from the global economic recession, and selling prices increase from pass-through of
higher precious metal costs. In addition, segment earnings are expected to increase reflecting the impact of higher
volumes, cost control initiatives, and benefits from the 2009 restructuring program.
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