DuPont 2011 Annual Report Download - page 30

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Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
as additional support to meet short-term liquidity needs and general corporate purposes, including letters of credit.
The company continually reviews its debt portfolio and occasionally may rebalance it to ensure adequate liquidity and an optimum debt maturity schedule. In
2011, the company issued $2.0 billion in Senior Notes and $1.0 billion in commercial paper to finance the acquisition of Danisco. Additionally, the company
assumed $0.7 billion in debt as part of the acquisition, which was refinanced through the issuance of commercial paper.
The company's credit ratings impact its access to the debt capital market and cost of capital. The company remains committed to a strong financial position
and strong investment-grade rating. The company's long-term and short-term credit ratings are as follows:
Long-term Short-term Outlook
Standard & Poor's A A-1 Stable
Moody’s Investors Service A2 P-1 Stable
Fitch Ratings A F1 Stable
(Dollars in millions) 2011 2010 2009
Cash provided by operating activities $ 5,152 $ 4,559 $ 4,741
Cash provided by operating activities increased $593 million in 2011 compared to 2010. The increase was driven by higher earnings, lower contributions to
pension plans and the weaker dollar, which was hedged with forward exchange contracts reflected in investing activities. These increases were partially offset
by changes in operating assets and liabilities, mainly due to higher inventory.
Cash provided by operating activities decreased $182 million in 2010 compared to 2009. Higher earnings were offset by changes in operating assets and
liabilities, mainly due to higher sales and inventory; the stronger dollar, which was hedged with forward exchange contracts reflected in investing activities;
and a contribution to the principal U.S. pension plan.
(Dollars in millions) 2011 2010 2009
Cash used for investing activities $ (6,238) $ (2,439) $ (4,298)
The $3.8 billion increase in 2011 was mainly due to the payment for the Danisco acquisition, higher expenditures for the purchases of property, plant and
equipment, and a net increase in payments for forward exchange contract settlements; partially offset by changes in investments in short-term financial
instruments.
The $1.9 billion decrease in 2010 was mainly due to changes in investments in short-term financial instruments and a net increase in proceeds from forward
exchange contract settlements, partially offset by an increase in payments for businesses and higher expenditures for the purchases of property, plant and
equipment.
Purchases of property, plant and equipment totaled $1.8 billion, $1.5 billion and $1.3 billion in 2011, 2010 and 2009, respectively. Higher spending in 2011
and 2010 reflects the company's continued investment in capacity expansion to support areas of growth. The company expects 2012 purchases of plant,
property and equipment to be about $2.1 billion, an increase of $0.3 billion over 2011, driven by continued growth investments aligned with the company's
global trends.
(Dollars in millions) 2011 2010 2009
Cash provided by (used for) financing activities $ 403 $ (1,829) $ (97)
The $2.2 billion change in 2011 was primarily due to an increase in borrowings in 2011 to finance the Danisco acquisition as compared to a decrease in
borrowings in 2010.
The $1.7 billion increase in cash used for financing activities in 2010 was primarily due to a decrease in borrowings in 2010 as compared to an increase in
borrowings in 2009. This was partially offset by an increase in the proceeds from the exercise of stock options net of cash used to repurchase common stock.
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