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Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
on production yields, as well as additional research and development expense as programs advance towards commercialization.
In the Crop Protection business, sales and earnings growth in 2012 is expected in all regions, particularly in Latin America and U.S. & Canada, and for all
market segments, primarily in insecticides and fungicides. In 2012, new product introductions are expected to include Cyazypyr® insecticide and
Penthiopyrad® fungicide.
ELECTRONICS & COMMUNICATIONS
(Dollars in millions) 2011 2010 2009
Segment sales $ 3,173 $ 2,764 $ 1,918
PTOI $ 355 $ 445 $ 87
PTOI margin 11% 16% 5%
2011 2010
Change in segment sales from prior period due to:
Selling price 23 % 7%
Volume (8)% 37%
Portfolio / Other — % —%
Total change 15 % 44%
2011 versus 2010 Sales growth reflects higher selling prices, primarily pass-through of metals prices. Lower sales volume primarily reflects destocking in
photovoltaics and softness in consumer electronics in the second half 2011, which more than offset strong demand in all market segments in the first half
2011.
2011 PTOI decreased primarily due to lower volume in the second half 2011. PTOI margin decreased primarily reflecting higher metal prices, as well as
weaker product mix.
2010 versus 2009 Higher sales volume was driven by strong growth in all regions, particularly in Asia Pacific and Europe, and strong demand across most
market segments, particularly in photovoltaics. Higher selling prices were primarily due to pass-through of higher metals prices.
2010 PTOI and PTOI margin increases reflect substantially higher volume, particularly in photovoltaics, as well as improved productivity and the absence of
a net $37 million restructuring charge in 2009.
Outlook For 2012, sales are expected to increase with photovoltaics and consumer electronics demand recovering in the second half 2012. Volume growth
is expected through new and innovative products, as well as capacity investments in Tedlar® completed in 2011 to meet global demand. Earnings are expected
to increase reflecting the impact of higher volume, new product introductions and productivity initiatives.
INDUSTRIAL BIOSCIENCES
(Dollars in millions) 2011 2010 2009
Segment sales $ 705 $ — $ —
PTOI $ (1) $ — $ —
PTOI margin — % —% —%
Sales and PTOI primarily reflects the acquisition of Danisco's enzyme business. PTOI included a $70 million charge for the fair value step-up of inventories
that were acquired as part of the acquisition and a $9 million restructuring charge. PTOI also included $12 million of amortization expense associated with the
fair value step-up of the acquired intangible assets.
Outlook 2012 sales and earnings will reflect a full year of results from the enzyme business acquired from Danisco in 2011. Science-based innovation
growth, cost synergies derived from integration, productivity gains and the absence of charges for transaction and integration related costs in 2011 are
expected to contribute to earnings. Volume growth is supported by expansion
22