3: E



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported) July 26, 2005

E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)


Delaware

1-815

51-0014090

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

Of Incorporation)

File Number)

Identification No.)

 

1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)

Registrant's telephone number, including area code: (302) 774-1000


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[    ]      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[    ]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[    ]      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[    ]      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






1

 



Section 2 - Financial Information

Item 2.02     Results of Operations and Financial Condition

                  On July 26, 2005, the Registrant announced its consolidated financial results for the quarter ended June 30, 2005. A copy of the Registrant's earnings news release is furnished on Form 8-K. The information contained in Item 2.02 of this report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor incorporated by reference in any registration statement filed by the Registrant under the Securities Act of 1933, as amended.










































2

 






SIGNATURE



          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


E. I. DU PONT DE NEMOURS AND COMPANY

(Registrant)

 
 

/s/ D. B. Smith

D. B. Smith

Vice President and Controller


July 26, 2005




























3

 

 

 

 

 

 

 

July 26, 2005

Contact:

Clif Webb

WILMINGTON, Del.

 

302-774-4005

   

r-clifton.webb@usa.dupont.com


DUPONT REPORTS HIGHER EARNINGS
EXPANDS OPERATING MARGIN FOR SIXTH CONSECUTIVE QUARTER

Highlights

  • Second quarter 2005 earnings were $1.01 per share versus $.50 per share in the prior year.
  • Excluding significant items, second quarter earnings per share grew 13 percent.
  • Asset sales, a favorable tax audit settlement and restructuring costs totaled a net benefit of $.11 per share in the quarter. In second quarter 2004, similar significant items totaled a net charge of $.30 per share.
  • Segment pretax operating income margin improved for the sixth consecutive quarter, up 1.4 percentage points versus prior year (excluding significant items and the divested Textiles & Interiors businesses).
  • Local prices increased 6 percent, more than offsetting higher energy and ingredient costs.
  • Segment sales were $7.9 billion, up 8 percent, excluding sales from the divested Textiles & Interiors and Photomasks businesses. Sales growth was achieved in all operating segments.
  • Volumes were flat, with strong growth in Asia, Latin America and Eastern Europe offsetting lower volumes in the United States and Western Europe.

                    "We improved our operating profit margin for the sixth consecutive quarter, despite record high energy and ingredient costs," said DuPont Chairman and CEO Charles O. Holliday, Jr. "Continued success with pricing and sales from new products were key to our strength in the quarter."









4

 



Global Consolidated Net Sales and Net Income
                    Consolidated net sales for the second quarter were $7.5 billion, essentially flat versus the second quarter 2004 which included $0.6 billion in sales from the Textiles & Interiors (T&I) businesses divested April 30, 2004. Net income for the second quarter was $1,015 million or $1.01 per share. Current quarter net income includes a net benefit of $111 million, or $.11 per share, related to asset sales, a favorable tax audit settlement, and restructuring costs. Second quarter 2004 net income was $503 million, or $.50 per share, including similar items totaling a net charge of $302 million, or $.30 per share. See Schedule B for a summary of these items.
Earnings Per Share
                   The table below shows the increase in second quarter 2005 earnings per share (EPS) versus second quarter 2004, by major element:

         
 

(EPS) Variances Versus 2nd Quarter 2004

 
         
     

2nd Quarter

 
         
 

EPS - 2004

 

$ .50

 
         
 

2Q'04 Significant Items (See Schedule B)

 

$ .30

 
         
 

Local Prices

 

.31

 
 

Volume

 

(.01)

 
 

Variable Costs

 

(.20)

 
 

Fixed Costs

 

.01

 
 

Currency

 

.02

 
 

Other

 

(.03)

 
         
 

2Q'05 Significant Items (See Schedule B)

 

.11

 
         
 

EPS - 2005

 

$1.01

 
         










5

 



Business Segment Performance - Segment Sales
                    Segment sales in the second quarter 2005 were $7.9 billion. Second quarter 2004 sales of $8.2 billion included $0.8 billion from divested businesses. As shown below, sales increased 8 percent versus 2004 excluding these divested businesses*. Sales growth resulted from 6 percent higher local selling prices and a 2 percent currency benefit and flat volume. Positive pricing momentum for the growth platforms continued throughout the second quarter.

ANALYSIS OF SEGMENT SALES*

   

Three Months Ended

 

Percentage Change Due to:

BY PLATFORM

 

June 30

 

U.S. $

   

(Dollars in billions)

 

$

 

% Change

 

Price

 

Volume

                 

Agriculture & Nutrition

 

$2.1

 

1%

 

6

 

(5)

Coatings & Color Technologies

 

1.7

 

5

 

8

 

(3)

Electronic & Communication

               

Technologies

 

0.9

 

12

 

9

 

3

Performance Materials(a)

 

1.8

 

8

 

10

 

(2)

Safety & Protection

 

1.4

 

19

 

9

 

10

                 

Total Core Segments(b)

 

$7.9

 

8%

 

8

 

-

   

Three Months Ended

 

Percentage Change Due to:

BY REGION

 

June 30

 

Local

 

Currency

   

(Dollars in billions)

 

$

 

% Change

 

Price

 

Effect

 

Volume

                     

U.S.(b)

 

$3.5

 

5%

 

7

 

-

 

(2)

Europe

 

2.2

 

4

 

4

 

5

 

(5)

Asia Pacific

 

1.4

 

17

 

6

 

2

 

9

Canada & Latin America

 

0.8

 

13

 

5

 

5

 

3

                     

Total Core Segments(b)

 

$7.9

 

8%

 

6

 

2

 

-

*

Includes transfers and a pro rata share of equity affiliate sales; excludes sales from T&I businesses divested on April 30, 2004 and the company's equity interest in DuPont Photomasks Inc., sold in April 2005.

   

(a)

Excluding sales from both current quarter and prior year for former DuPont Dow Elastomers (DDE) businesses transferred to The Dow Chemical Company on June 30, 2005, Performance Materials second quarter 2005 worldwide sales were $1.6 billion, up 4 percent, reflecting 10 percent higher USD prices, partly offset by 6 percent lower volume.

(b)

Excluding sales from both current quarter and prior year for former DDE businesses transferred to The Dow Chemical Company on June 30, 2005, total core segment sales were $7.7 billion, up 7 percent and reflected a 1 percent volume decline. U.S. sales were $3.4 billion, up 4 percent, and reflected a 3 percent U.S. volume decline.






6

 



Business Segment Performance - PTOI
                    Segment pretax operating income (PTOI) for second quarter 2005 was $1,588 million compared to $668 million in the second quarter 2004. Segment PTOI increased 14 percent and PTOI margin increased 1.4 percentage points excluding significant items and divested businesses from both periods. The second quarter 2005 segment performance reflected a $90 million net benefit from significant items. The second quarter 2004 included significant item charges totaling $661 million, principally for corporate restructuring costs and charges related to the separation of T&I businesses. Segment PTOI and percentage changes versus second quarter 2004 are shown below:

   

Three Months Ended June 30

PRETAX OPERATING INCOME

         

% Change

(Dollars in millions)

 

2005

 

2004

 

vs. 2004*

             

Agriculture & Nutrition

 

$ 511

 

$ 446

 

15%

Coatings & Color Technologies

 

194

 

150

 

29

Electronic & Communication Technologies

 

211

 

(27)

 

NM

Performance Materials

 

190

103

 

84

Pharmaceuticals

 

192

 

174

 

10

Safety & Protection

 

283

 

163

 

74

Other (including divested T&I businesses)

 

7

 

(341)

 

NM

             

Total

 

$1,588

 

$ 668

 

138%

*

See Schedule B for detail of significant items affecting segment PTOI for the current and prior-year quarters.

Agriculture & Nutrition

7

 



Coatings & Color Technologies

Electronic & Communication Technologies

Performance Materials

Safety & Protection

          Additional information on segment performance is available on the DuPont Investor Center at

www.DuPont.com.


8

 



Outlook
          "Pricing, new products, growth in emerging markets and productivity gains will overcome more than $1 billion in higher energy and ingredients costs this year," said Holliday. "We remain confident that in 2005 we will exceed our sustainable earnings growth goal of 10 percent."
          Three key assumptions have changed since the original guidance provided six months ago about the company's expected 2005 results:

          Pricing and productivity in first half of 2005 more than offset cost increases from raw materials and inflation. Adding to this improvement in earnings were significant items (gains on asset sales and a favorable tax settlement partly offset by a restructuring charge).
          Considering the above, the company now expects full-year 2005 reported earnings per share of $2.75 to $2.80, including $.11 per share in significant items recorded in the second quarter. In addition, the company expects third quarter earnings per share to be roughly 40 percent of the second half 2005 earnings. (This outlook excludes any potential impact from actions that might be taken in connection with the American Jobs Creation Act). In 2004, DuPont reported earnings per share of $1.77, and earnings per share before significant items of $2.38 which included $.13 per share attributable to the divested T&I businesses.





9



American Jobs Creation Act

          The company continues to review alternatives to repatriate foreign earnings under the American Jobs Creation Act of 2004 (the "Act"). No decision to repatriate earnings has been made. However, should the company decide to repatriate earnings under the Act, it would expect to repatriate between $8 and $10 billion over the remainder of 2005, the upper end of the range previously disclosed. A preliminary assessment indicates that the tax cost will be between 3 percent and 4 percent of the amount repatriated. Currently these earnings are considered to be permanently reinvested and no taxes have been reserved. The company expects to finalize its decision during the third quarter.

Use of Non-GAAP Measures
          Management believes that measures of income excluding significant items ("non-GAAP" information) are meaningful to investors because they provide insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of non-GAAP measures to GAAP is provided in Schedule E.


          DuPont is a science company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation and protective apparel.


Forward-Looking Statements: This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects,"



10



"anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales of agricultural products.

# # #

7/26/05





































11

 



E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE A

   

Three Months Ended

 

Six Months Ended

CONSOLIDATED INCOME STATEMENT

 

June 30,

 

June 30,

(Dollars in millions, except per share)

 

2005

 

2004

 

2005

 

2004

NET SALES

 

$7,511

 

$7,527

 

$14,942

 

$15,600

Other Income(a)

 

611

 

205

 

1,006

 

337

Total

 

8,122

 

7,732

 

15,948

 

15,937

Cost of Goods Sold and Other Operating Charges(b)

 

5,220

 

5,455

 

10,271

 

11,212

Selling, General and Administrative Expenses

 

866

 

828

 

1,673

 

1,648

Amortization of Intangible Assets

 

57

 

56

 

114

 

110

Research and Development Expense

 

339

 

333

 

652

 

670

Interest Expense

 

120

 

81

 

224

 

166

Employee Separation Costs and Asset Impairment Charges(c)

 

-

 

433

 

-

 

433

Separation Charges - Textiles & Interiors(d)

 

(39)

 

183

 

(39)

 

528

Total

 

6,563

 

7,369

 

12,895

 

14,767

INCOME BEFORE INCOME TAXES AND MINORITY

               

INTERESTS(e)

 

1,559

 

363

 

3,053

 

1,170

Provision for (Benefit from) Income Taxes(f)

 

517

 

(123)

 

1,026

 

3

Minority Interests in Earnings of Consolidated Subsidiaries

 

27

 

(17)

 

45

 

(4)

NET INCOME

 

$1,015

 

$ 503

 

$ 1,982

 

$ 1,171

BASIC EARNINGS PER SHARE OF COMMON STOCK(g)

               

Net Income

 

$ 1.02

 

$ 0.50

 

$ 1.99

 

$ 1.17

DILUTED EARNINGS PER SHARE OF COMMON STOCK(g)

               

Net Income

 

$ 1.01

 

$ 0.50

 

$ 1.97

 

$ 1.16

DIVIDENDS PER SHARE OF COMMON STOCK

 

$ 0.37

 

$ 0.35

 

$ 0.72

 

$ 0.70






















12

 


NOTES TO CONSOLIDATED INCOME STATEMENT

(a)

Second quarter 2005 includes a gain of $23 resulting from the disposition of certain assets of DuPont Dow Elastomers LLC (DDE) to The Dow Chemical Company, a $28 benefit related to interest on certain prior year tax contingencies, and a gain of $48 resulting from the sale of the company's equity interest in DuPont Photomasks Inc.

 

Year-to-date 2004 includes a charge of $150 to provide for the company's share of anticipated losses associated with DDE antitrust litigation matters.

(b)

Second quarter 2005 includes a charge of $34 related to the shutdown of an Elastomers manufacturing facility in the United States.

 

Second quarter 2004 includes a charge of $45 to establish a reserve in connection with PFOA class action litigation in West Virginia. Year-to-date 2004 also includes a charge of $36 to provide for the settlement of litigation in Refinish.

(c)

During second quarter 2004, the company recorded corporate restructuring and asset impairment charges totaling $433. This includes $312 associated with the separation costs for approximately 2,700 employees. In addition, charges include $42 related to the impairment of certain European manufacturing assets, $23 related to the shutdown of manufacturing assets at a U.S. facility, $29 to write off abandoned technology, and $27 to reflect a decline in the value of an investment security.

(d)

Second quarter 2005 includes a net gain of $39 relating to the disposition of three equity affiliates associated with the ongoing separation of Textiles & Interiors, partly offset by other separation costs.

 

During second quarter 2004, the company recorded a charge of $183 related to the divestiture of INVISTA. This charge primarily reflects an increase in the book value of the net assets sold and additional separation costs. Year-to-date 2004 reflects an additional INVISTA-related charge of $345 which includes an agreed upon reduction in sales price of $240, and other changes in estimates associated with the sale.

(e)

Second quarter 2005 includes $14 of operating income related to certain DDE assets that were disposed of on June 30, 2005.

(f)

Second quarter 2005 includes a net tax benefit of $24 related to certain prior year tax contingencies previously reserved.

 

Second quarter 2004 reflects benefits of $105 associated with the separation of INVISTA and $124 associated with recording an increase in deferred tax assets in two European subsidiaries for their tax basis investment losses recognized on local tax returns. Year-to-date 2004 includes additional INVISTA-related tax benefits of $210.

(g)

Earnings per share are calculated on the basis of the following average number of common shares outstanding:

 

Three Months Ended

 

Six Months Ended

 

June 30

 

June 30

 

Basic

 

Diluted

 

Basic

 

Diluted

2005

996,025,680

 

1,002,809,399

 

996,164,219

 

1,004,506,893

2004

1,000,559,397

 

1,005,278,448

 

999,901,079

 

1,004,484,286






13

 


E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE B

SIGNIFICANT ITEMS
(Dollars in millions, except per share)

   

Pretax

 

After-Tax

 

($ Per Share)

   

2005

 

2004

 

2005

 

2004

 

2005

 

2004

                         

1st Quarter - Total

 

$ -

 

$(531)

 

$ -

 

$(296)

 

$ -

 

$(.30)

                         

2nd Quarter:

                       

DDE-Related Items:

                       

Gain on Sale of Assets

 

$ 23

     

$ 15

           

Operating Income from Assets Sold

 

14

     

10

           

Employee Separation Costs

 

(34)

     

(23)

           

Total

 

3

     

2

     

-

   
                         

Textiles & Interiors - Related Items:

                       

Separation Charges

 

39

 

$(183)

 

26

 

$ (78)

 

$.03

 

$(.08)

Deferred Tax Benefits

     

-

     

124

     

.12

Total

     

(183)

     

46

     

.04

                         

Restructuring Costs

     

(433)

     

(319)

     

(.31)

                         

Sale of Photomasks Stock

 

48

     

31

     

.03

   
                         

PFOA Litigation

     

(45)

     

(29)

     

(.03)

                         

Corporate Tax-Related Items

 

28

     

52

     

.05

   
                         

2nd Quarter Total

 

$118

 

$(661)

 

$ 111

 

$(302)

 

$.11

 

$(.30)

 

SIGNIFICANT ITEMS BY SEGMENT
(Dollars in millions on pretax basis)

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2005

 

2004

 

2005

 

2004

                 

Agriculture & Nutrition

 

$ -

 

$ (36)

 

$ -

 

$ (36)

Coatings & Color Technologies

 

-

 

(64)

 

-

 

(100)

Electronic & Communication Technologies

 

48

 

(114)

 

48

 

(114)

Performance Materials

 

3

 

(68)

 

3

 

(218)

Safety & Protection

 

-

 

(71)

 

-

 

(71)

Textiles & Interiors

 

-

 

(183)

 

-

 

(528)

Other

 

39

 

(125)

 

39

 

(125)

                 

Total (excluding Corporate)

 

$90

 

$(661)

 

$90

 

$(1,192)

Note:

See Notes to Consolidated Income Statement for additional details.





14

 




E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE C

 

Three Months Ended

 

Six Months Ended

CONSOLIDATED SEGMENT INFORMATION(1)

June 30,

 

June 30,

(Dollars in millions)

2005

 

2004

 

2005

 

2004

SEGMENT SALES(2)

             

Agriculture & Nutrition

$2,102

 

$2,076

 

$ 4,458

 

$ 4,277

Coatings & Color Technologies

1,640

 

1,560

 

3,176

 

2,977

Electronic & Communication Technologies

933

 

845

 

1,787

 

1,661

Performance Materials

1,836

 

1,703

 

3,621

 

3,222

Safety & Protection

1,388

 

1,169

 

2,670

 

2,258

Textiles & Interiors

N/A

 

826

 

N/A

 

2,709

Other

13

 

13

 

25

 

25

Total Segment Sales

7,912

 

8,192

 

15,737

 

17,129

Elimination of Transfers

(82)

 

(157)

 

(160)

 

(408)

Elimination of Equity Affiliate Sales

(319)

 

(508)

 

(635)

 

(1,121)

CONSOLIDATED NET SALES

$7,511

 

$7,527

 

$14,942

 

$15,600

PRETAX OPERATING INCOME (LOSS) (PTOI)(3)

             

Agriculture & Nutrition(c)

$ 511

 

$ 446

 

$ 1,268

 

$ 1,077

Coatings & Color Technologies(b,c)

194

 

150

 

360

 

303

Electronic & Communication Technologies(a,b,c)

211

 

(27)

 

316

 

65

Performance Materials(a,b,c,e)

190

 

103

 

401

 

109

Pharmaceuticals

192

 

174

 

351

 

322

Safety & Protection(c)

283

 

163

 

514

 

394

Textiles & Interiors(d)

N/A

 

(168)

 

N/A

 

(363)

Other(c,d)

7

 

(173)

 

(14)

 

(206)

Total Segment PTOI

1,588

 

668

 

3,196

 

1,701

Exchange Gains and Losses(4)

183

 

(76)

 

294

 

(89)

Corporate Expenses & Interest(a)

(212)

 

(229)

 

(437)

 

(442)

INCOME BEFORE INCOME TAXES AND

MINORITY INTERESTS

$1,559

$ 363

$ 3,053

$ 1,170

 

(1)

Certain reclassifications of segment data have been made to reflect changes in organizational structure. Beginning in 2005, Textiles & Interiors is no longer an operating segment of the company. The remaining assets and charges related to separation activities are reported under Other.

(2)

Includes transfers and pro rata share of equity affiliate sales.

(3)

See respective Notes to Consolidated Income Statement for additional information on significant items.

(4)

Net after-tax exchange losses for second quarter 2005 and 2004 were $10 and $39, respectively. Gains and losses resulting from the company's hedging program are largely offset by associated tax charges and benefits.







15

 




E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE D

SELECTED INCOME STATEMENT DATA
(Dollars in millions, except per share)

   

Three Months Ended

 

Six Months Ended

   

June 30

 

June 30

   

2005

 

2004

 

% Chg.

 

2005

 

2004

 

% Chg.

Consolidated Net Sales

 

$7,511

 

$7,527

 

- %

 

$14,942

 

$15,600

 

(4)%

Segment Sales

 

7,912

 

8,192

 

(3)

 

15,737

 

17,129

 

(8)

Segment PTOI

 

1,588

 

668

 

138

 

3,196

 

1,701

 

88

EBIT*

 

1,617

 

442

 

266

 

3,164

 

1,312

 

141

EBITDA*

 

1,942

 

768

 

153

 

3,821

 

1,948

 

96

Income Before Income Taxes

                       

and Minority Interests

 

1,559

 

363

 

329

 

3,053

 

1,170

 

161

EPS - Diluted

 

1.01

 

0.50

 

102

 

1.97

 

1.16

 

70

*

See Reconciliation of Non-GAAP measures (Schedule E).

 

SCHEDULE E

RECONCILIATION OF NON-GAAP MEASURES
(Dollars in millions)

Reconciliation of EBIT / EBITDA to Consolidated Income Statement

     

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2005

 

2004

 

2005

 

2004

Income Before Income Taxes and

               

Minority Interests

 

$1,559

 

$363

 

$3,053

 

$1,170

Less: Minority Interest in Earnings

               

of Consolidated Subsidiaries(1)

 

(24)

 

14

 

(43)

 

3

Add: Net Interest Expense(2)

 

82

 

65

 

154

 

139

EBIT

 

1,617

 

442

 

3,164

 

1,312

Add: Depreciation and Amortization(3)

 

325

 

326

 

657

 

636

EBITDA

 

$1,942

 

$768

 

$3,821

 

$1,948

(1)

Excludes income taxes.

(2)

Includes interest expense plus amortization of capitalized interest less interest income.

(3)

Excludes amortization of capitalized interest.









16

 



SCHEDULE E -- (Continued)

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate

       

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2005

 

2004

 

2005

 

2004

Income Before Income Taxes and

               

Minority Interests

 

$1,559

 

$ 363

 

$3,053

 

$1,170

Remove: Significant Items - Charge/(Benefit)

 

(118)

 

661

 

(118)

 

1,192

Net Exchange (Gains)/Losses

 

(183)

 

76

 

(294)

 

89

Income Before Income Taxes,

               

Significant Items, Exchange Gains/

               

Losses and Minority Interests

 

$1,258

 

$1,100

 

$2,641

 

$2,451

Provision for Income Taxes

 

$ 517

 

$ (123)

 

$1,026

 

$ 3

Remove: (Expense)/Benefit

               

Tax on Significant Items

 

(7)

 

359

 

(7)

 

594

Tax on Exchange Gains/Losses

 

(193)

 

37

 

(342)

 

19

Provision for Income Taxes,

               

Excluding Taxes on Significant Items

               

and Exchange Gains/Losses

 

$ 317

 

$ 273

 

$ 677

 

$ 616

Effective Income Tax Rate

 

33.2%

 

(33.9)%

 

33.6%

 

0.3%

Base Income Tax Rate

 

25.2%

 

24.8%

 

25.6%

 

25.1%






























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