DuPont 2010 Annual Report Download - page 26

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Part II
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, continued
Based on the results of the company’s annual goodwill impairment test in 2010, no impairments exist at this time. The
company’s methodology for estimating the fair value of its businesses is using the income approach based on the
present value of future cash flows. The income approach has been generally supported by additional market
transaction analyses. There can be no assurance that the company’s estimates and assumptions regarding forecasted
cash flow and revenue and operating income growth rates made for purposes of the annual goodwill impairment test
will prove to be accurate predictions of the future. The company believes the current assumptions and estimates
utilized are both reasonable and appropriate. Information with respect to the company’s significant accounting policies
on long-lived assets is included in Note 1 to the Consolidated Financial Statements.
Segment Reviews
Segment sales include transfers to another business segment. Products are transferred between segments on a basis
intended to reflect, as nearly as practicable, the market value of the products. Segment pre-tax operating income (loss)
(PTOI) is defined as operating income before income taxes, exchange gains (losses), corporate expenses and interest.
A reconciliation of segment sales to consolidated net sales and segment PTOI to income before income taxes for 2010,
2009 and 2008 is included in Note 25 to the Consolidated Financial Statements.
As described in Note 4 to the Consolidated Financial Statements, the company initiated global restructuring programs
during 2009 and 2008. The 2009 and 2008 program charges reduced total segment PTOI for 2009 and 2008 by
$340 million and $535 million, respectively.
In 2009, the company recorded a $30 million and $100 million net reduction in the estimated costs associated with the
2009 program and 2008 programs, respectively. In 2010, the company recorded a $20 million and $14 million net
reduction in the estimated costs associated with the 2009 program and 2008 programs, respectively.
Below is a summary of the net impact to each segment related to the activities described above:
2010 (Charges) 2008
and Credits 2009 (Charges) and Credits (Charge)
2009 and 2008 2009 Net 2008 Net
Net Program 2009 Program Program 2009 Net 2008
(Dollars in millions) Reductions Program Reductions Reductions Impact Program
Agriculture & Nutrition $- $ - $- $1 $1 $(18)
Electronics & Communications 8(43) 6 - (37) (37)
Performance Chemicals 10 (66) 9 3 (54) (50)
Performance Coatings (6) (65) (11) 61 (15) (209)
Performance Materials 16 (110) 23 29 (58) (94)
Safety & Protection 5(55) 8 2 (45) (96)
Other 1(1) (5) 4 (2) (31)
Total (Charge) Credit $34 $(340) $ 30 $ 100 $(210) $(535)
25