DuPont 2012 Annual Report Download - page 22
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continued
2011 Restructuring Program
In 2011, the company initiated a series of actions to achieve the expected cost synergies associated with the Danisco acquisition. As a result, the company
recorded a $53 million charge in employee separation/asset related charges, net, primarily for employee separation costs in the U.S. and Europe.
In the fourth quarter 2012, the company recorded a net reduction of $15 million in the estimated costs associated with the 2011 restructuring program. This
net reduction was primarily due to workforce reductions through non-severance programs and lower than estimated individual severance costs. The actions
and payments related to the 2011 restructuring program were substantially complete as of December 31, 2012.
Asset Impairments
During 2012, the company recorded asset impairment charges of $275 million to write-down the carrying value of certain asset groups to fair value. These
asset impairment charges resulted in a $150 million charge within the Electronics & Communications segment, a $92 million charge within the Performance
Materials segment and a $33 million charge within the Performance Chemicals segment.
Additional details related to the restructuring programs and asset impairments discussed above can be found in Note 3 to the Consolidated Financial
Statements.
Below is a summary of the net impact related to items recorded in employee separation / asset related charges, net:
(Dollars in millions)
Agriculture $(11)$ — $ —
Electronics & Communications (159)— 8
Industrial Biosciences (3)(9)—
Nutrition & Health (49)(14)—
Performance Chemicals (36)—10
Performance Materials (104)(2)16
Safety & Protection (58)— 5
Other 11 (28)1
Corporate expenses (84)— —
Total (Charges) Credits $(493)$(53)$40
(Dollars in millions)
$622 $626 $515
Effective income tax rate 20.0%16.6%15.8%
In 2012, the company recorded a tax provision on continuing operations of $622 million, reflecting a marginal decrease from 2011. The increase in the 2012
effective tax rate compared to 2011 was primarily due to geographic mix of earnings, in addition to the absence of certain U.S. business tax provisions in 2012
(extended retroactively to 2012 in first quarter 2013).
In 2011, the company recorded a tax provision on continuing operations of $626 million, reflecting an increase from 2010 largely due to pre-tax earnings
growth, which was partially offset by the impact associated with the company's policy of hedging the foreign currency-denominated monetary assets and
liabilities of its operations.
See Note 6 to the Consolidated Financial Statements for additional details related to the provision for income taxes on continuing operations, as well as items
that significantly impact the company's effective income tax rate.
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