DuPont de Nemours, Inc.
Q3 2010 Earnings Call Transcript

Published: 26 Oct 2010

[Operator:]

Good morning. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the DuPont 2010 Third Quarter Investor Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Karen Fletcher, Vice President of Investor Relations. Karen, you may begin your conference.

[Karen Fletcher:]

Thank you, John. Good morning, and welcome. With me this morning are Ellen Kullman, Chair and CEO; and Nick Fanandakis, CFO. The slides for today's call can be found on our website at dupont.com, along with the news release that was issued earlier today. Please turn to Slide 1. During the course of this conference call, we will make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially. We will also refer to non-GAAP measures and request that you please refer to the reconciliations to GAAP statements provided with our earnings news release and on our website. And finally, we've posted supplemental information on our website that we hope is helpful to your understanding of our company's performance. Now it's my pleasure to turn the call over to Ellen Kullman.

[Ellen Kullman:]

Thanks, Karen, and good morning, everyone. Once again, I'm very pleased with what our team has accomplished, to help frame a strong underlying performance in the quarter, look at the segment results, excluding Pharmaceutical royalty income. On that basis, segment pretax operating income went from $491 million to $652 million, an increase of 33%. Driving these results with the same priorities I've shared with you before our playbook working and the disciplined execution of our business plans is paying dividends in more ways than one. Our consistent focus on market-driven product innovation, pricing discipline, emerging markets and ongoing productivity are delivering very strong results. Slide 2 recaps DuPont's 2010 directives. I shared these directives with you last quarter and I used them consistently when talking with employees around the world. Business-specific goals are drawn from these corporate targets and ultimately, every employee recognizes and is rewarded for what they do to react to changing markets or customer demands and how they contribute to the overall success of the company. While our directives are clear and our managing processes are sound, we must contend with dynamic market and competitive situations, so let me share some perspectives on key markets this quarter. I'll start with once related to Safety & Protection. We expected industrial market to continue to strengthen resulting in a rebound in mid-cycle businesses. This certainly played out during the quarter. Nomex sales were up more than 80% with growth driven by infrastructure spending and increase protection of workers, particularly in transportation, oil and gas, power generation and distribution. Mid-cycle businesses are indeed starting to rebound and we're ready. We're also working on new applications for our finer denier Kevlar offering in anticipation of Cooper River plant expansion. One example is Kevlar XP, which offers lighter weight, more comfort and superior ballistic protection. Last week, we announced the launch of yet another application for Kevlar XP, this one for Hard Armor needs in the military, law enforcement and homeland security. Of course, another key market for Safety & Protection is construction which continues to be soft. New housing starts in the U.S. are expected to be up less than 10% in 2010 compared to a very weak bottoming out last year. Commercial markets also remain soft. Moving to Electronics, I hope you had the chance to hear directly from Dave Miller, the President of our Electronics & Communications business, when he provided an update for investors last month. You can go to our website for Dave's charts and an audio replay of that webcast. In short, Dave confirmed that photovoltaic markets remain extremely strong with healthy demand in consumer electronic and printing markets as well. Our customers demand high-performing products and a constant stream of innovation is critical to our continued success. The fantastic year we're having in this segment is a result of an R&D pipeline that is highly productive and a business team with very clear priorities, which are directly tied to our company's directives. Moving to automotive markets. Global light vehicle builds were up 8% over third quarter of 2009. Performance Coatings and Performance Polymers benefited from continued recovery in these markets. Customer reaction and acceptance of Performance Polymers Zytel PLUS offering has been really positive with a number of adoptions since its launch in March. This product offers exceptional performance under extended exposure to heat and chemicals and is an important new offering in lightweighting of vehicles. Turning to Ag & Nutrition, North American farm incomes will be up as expected with increases in both crop receipts and livestock. Long-term fundamentals are also playing out as expected, with increased demand for agricultural productivity where science can make substantial contributions. In response to market demands, we will stay close to our growers. We are working with them every day, meeting their needs with products they trust and a value proposition that is optimized to their farms. In addition, we're executing against our multi-year strategy by investing in our pipeline to ensure we deliver value-added solutions, both near term and long term. We also continue to invest strategically in our route to market and other critical functions in this increasingly complex market space. Our teams are organized and highly energized from their successes in the 2010 season. One important growth investment we announced in the quarter was our intent to acquire a majority share of South Africa's Pannar Seed business. We're working to close that transaction by early next year. On a related topic of growth in emerging markets, our long-term strategy here continues to pay off for DuPont. I expect full year sales to increase from 8 [indiscernible] to $10 billion in 2010. Now we've stated our expectations for 14% compound annual growth in emerging markets long term and this year's growth is well above that pace. And while we benefited from some restocking, it's clear that we're winning in the marketplace. Years of hard work provided us with a strong foundation that we're operating from today. We've enhanced our offerings through local technology labs, local product and application development and a streamlined organization that makes decision-making faster and more market-centric. Productivity is also a critical to the company's success and I am pleased to report that we're tracking ahead of our $600 million combined goal for fixed cost productivity and restructuring savings in 2010. We will continue to roll out DuPont Production System's across plant sites. Three years ago, we started with the largest sites and picked a lot of the low-hanging fruit. Our Wuppertal plant in Germany was the first pilot for DPS and I was there this August to personally witness the different DPS continues to make today. Midsized facilities are actively adopting DPS. For example, the Ulsan site in Korea launched DPS this quarter. There was a kickoff ceremony and our team's highly energized and ready to step up to some aggressive goals at that site. Their energy, their sense of urgency, their appetite to deliver impressive results are representative of what's happening around the company. So now I'll turn the call over to Nick to review our financial performance, and then I'll come back and close with some comments on our outlook. Nick?

[Nicholas Fanandakis:]

Thank you, Ellen, and good morning, everyone. I'm pleased to report that in the third quarter, DuPont continued to deliver very strong results. As the global economy recovers, we drove volume and price up in all regions of the world. This quarter's performance continues to build on the strong foundation we have laid since recovery began. 2010 has been and will continue to be a typical year for the company, as we replaced Pharmaceutical royalties with profitable growth from all other business units. By any measure, the third quarter was strong with every business and region contributing to the success in the quarter. Now I'd like to review the details of the quarter, pointing out some of the accomplishments versus goals. And we'll start with Slide 3, which is a summary of earnings per share and sales results. Earnings per share were $0.40 compared to $0.45 in the prior year. However, it's important to note that when you exclude Pharmaceuticals, underlying segment pretax earnings were up 33%. Consolidated net sales of $7 billion were up 17% versus the prior year, comprised of 14% volume gains, 5% positive local price, 1% negative currency impact and 1% reduction from portfolio changes. Volume was up in all business segments and in all regions of the world. Local currency prices were also up in all regions, reflecting our continued strong pricing discipline. Let's turn to the segment reviews and begin with Ag & Nutrition on Slide 4. You see third quarter sales grew 2% to $1.3 billion, as Latin America and Asia-Pacific increases were somewhat muted by the impact of Crop Protection-divested businesses. This seasonal pretax earnings loss of $181 million reflects increased sales offset by growth investment and divested businesses impact. Year-to-date, Ag & Nutrition segment delivered sales growth of 9% and improved earnings by 15%. Focusing on individual businesses and starting with Crop Protection, industry estimates suggest a turn in the environment with third quarter market volume slightly up. Our sales were flat as increased demand for Rynaxypyr insecticide and picoxystrobin fungicides were offset by portfolio changes and to a lesser extent, slightly lower prices. Excluding the business sale, revenues were up modestly due to the growth in our new products. From a regional perspective, volume gains were broad-based, but Asia-Pacific stood out with 14% volume growth. We held price firm in all regions, with the exception of Latin America where prices were down, reflecting generic competition, particularly in the area of fungicides. During the third quarter, we received EPA registration for a number of new products containing our next-generation active ingredient, which is focused on land management weed control. Commensurate with hitting important milestones such as achieving regulatory approvals, we made strategic investments in the quarter supporting future growth opportunities. Moving to Nutrition & Health. Sales were up slightly and earnings down substantially. The business experienced slower-than-expected growth in higher end protein business. The business is making progress in productivity and breaking into new higher value end use markets, which is the cornerstone to our long-term growth plans. Finally, moving to the Seed business, sales were $496 million, up 5%, underpinned by 3% U.S. dollar price gains and 2% volume growth. First, I'll lay out Latin America industry backdrop for the 2010, 2011 planting season, which plays out in the third and fourth quarter. Industry expectations are for a late start to the soybean season, a market where we have a fast growing presence. In corn, expectations are for Brazil to decrease their summer corn hectares. Backed by leading sales force and solid product line up, we are confident in our expectation to grow sales with continued Bt corn technology penetration in share gain in our second brands with the growth weighted to the fourth quarter. Year-to-date, seed sales of $4.8 billion improved 13% and was matched with significant earnings growth. Top line growth primarily reflects the success in North America underpinned by higher mix of value-added products and share gains in corn, soybeans and canola. During quarter three, USDA firm their 2010 acreage estimate by crop, and we finalized all transactions for the season, allowing us to update our share estimates. Our North American corn share is 35%, gaining about three points over 2009 and our North American soybean share is 31%, gaining about five points over 2009. Share data is not yet final, and it won't be until the last USDA 2010 acreage update in January, but we expect these numbers to remain very solid. It's been a phenomenal year. And most importantly, we're excited about our growers and what they're seeing during the harvest, which is now about 80% complete. They're seeing consistent high yielding product performance and very strong results from our new hybrids we introduced in 2010. Significant number of growers also see AcreMax 1 demonstration plus and they're, too, they're seeing the performance is meeting grower expectations giving us confidence with the success of our 1 million unit commercial launch in 2011. Bringing this altogether with the solid performance year-to-date and consistent value proposition, we had furthered our relationship with our growers, creating an even stronger position for which to launch our 2011 season. Underpinning our success is a multi-year investment strategy underway since about 2007 focused on breathing, biotechnology, sales force training, agronomic and technical support, local distribution and other critical functions. For example, we expect R&D to be up one percentage point of sales. All of these investments support our ability to be the leader in this attractive market over the long term. Looking now to the full year segment outlook. We anticipate high single digits sales growth and low to mid-teens earnings growth. This is underpinned by the following fourth quarter expectations

[Ellen Kullman:]

Great. Thanks, Nick. The outlook of about $3.10 earnings per share, excluding items is our best estimate of how we'll end this year. It's not meant to project pinpoint accuracy, but rather give you our collective view of the most likely market scenarios, productivity results, customer actions, particularly with respect to inventory management as we approach year end. We're in the midst of our 2011 execution reviews with each of our business units. We will share the business plans and targets at our Investor Event on December 9. In the meantime, I want to reemphasize that you should continue to expect DuPont to demonstrate the same focus and concentration on executing our playbook that we've done year-to-date. I want to particularly highlight three important things you can expect us to deliver

[Karen Fletcher:]

Okay. Thanks, Ellen. John, let's open the line up for questions.

[Operator:]

[Operator Instructions] And our first question comes from David Begleiter from Deutsche Bank.

[David Begleiter:]

Ellen, can you comment on TiO2, just how tight is the market? What was your pricing up year-over-year and why you expect pricing to rise in Q4 and 2011?

[Ellen Kullman:]

TiO2 continues to perform very well in the marketplace that high-quality pigment and penetration that we've had in Asia-Pacific has produced the strong results you see. It is very tight market. And that tight market, given that it is a commodity chemical, does influence price and allow price to move. That is a very competitive environment, and so the exact amount will depend on exactly the actions of our competitors. But I do think there's positive momentum there and that you can see those results coming through the end of this year and into next year.

[David Begleiter:]

Would you expect double-digit price increases in TiO2 for next year as well?

[Ellen Kullman:]

I think that's a little hard to predict right now. I think I defer that to our December event when we're going to put 2011 in great context for you.

[Operator:]

Our next question comes from Bob Koort from Goldman Sachs.

[Robert Koort:]

Just following on Dave a little bit, but when the division was almost 40% of earnings this quarter maybe it deserves closer inspection. I guess I'm a little struck by the volume record volumes in that TiO2 business given how terrible the domestic housing market is. So did you guys ship more than usual out of the U.S. or did you produce more than usual in Asia? How were you able to tap that kind of demand strength when the U.S. market still seems pretty lukewarm?

[Ellen Kullman:]

I think Bob, there were number of years we've been globalizing that business. And so although our assets tend to be along the Gulf Coast or in Tennessee, the majority of our assets plus Guanyin in Taiwan, we shipped globally out of these very efficiently. And so this has been a pattern that's been changing over the long course. It's just not been a 2010 kind of pattern. We've had great penetration into Asia-Pacific, as they've really increased their use of pigment in a wide variety of markets, especially the high-quality pigment like we produce. And so this isn't just a 2010 issue. It really is a long-term issue.

[Robert Koort:]

[indiscernible] Chinese project stands and then also your sourcing of raw materials, is there any chance that, that becomes an issue going forward given how tight the markets are?

[Ellen Kullman:]

Yes, so in China, there's really no update on that project. We continue to work locally with the government to obtain the business license to enable us to construct the plant. And so we continue to drive that. In terms of raws, you see some of that coming through in our results this year, this quarter with chlorine and things like that. We obviously, having the position we have in the marketplace and the relationship we have with the value chain, have strong relationships in the key raw materials that are enabler for us, and so we remain confident in that area.

[Operator:]

Our next question comes from Mark Gulley from Soleil Securities.

[Mark Gulley:]

I guess my first question is this. If I take a look at some of the business leading and lagging, once it tend to be lagging would include the Coatings and perhaps the Performance Materials business. Ellen, can you comment a little bit about how you think they're going to proceed as they try to catch up with the other divisions that are doing better?

[Ellen Kullman:]

Yes, so if you talk about the Coatings division, we have gotten back to pre-recession margins, so it kind of the place to start from to then continue to improve. Our volumes are below pre-recession levels, so we still have operating leverage in that business that we can take advantage of as we move forward. So that is a lagging business from that standpoint and we continue to drive productivity, continue to drive our relationships in the marketplace to be able to get that operating leverage going forward. You also mentioned Performance Materials. I don't see that as lagging. Their margins have returned now. I think their volumes are still below pre-recession levels, but with the restructuring we've done and the focus we have on operating leverage, I think those teams have really done a great job at capturing a lot of value for our company coming through this year.

[Mark Gulley:]

Then a financial question for Nick. Can you give us any help with respect to what kind of interest expense savings you might enjoy reify you talked about in your prepared remarks?

[Nicholas Fanandakis:]

Yes, so as you know, we announced we issued $2 billion of additional debt and we got very attractive rates averaging about 3.5%. We retired about $1.3 billion of debt early, which had rates in the greater than 5%. So on an ongoing basis from an interest expense standpoint, when you look at those two pieces, it's about flat. Interest expense will be about the same as it has been, put on $2 billion of debt versus the $1.3 billion that was in place before.

[Operator:]

Our next question comes from Kevin McCarthy from Bank of America.

[Kevin McCarthy:]

It's good to see the larger share gain estimates in corn and soybeans and pioneer. I understand the harvest is only 80%, but based on what you've seen so far, would you comment on the performance of your seeds in 2010 relative to competition, as well as implications for share trends next year?

[Ellen Kullman:]

Sure. So 80% complete are the numbers we have. Now our data collection at our customer trials is about 60% complete. So we got a lot of information, but we got more coming in and we'll share that as we get through the early part of November and obviously spend a lot of time on this in the December Investor Event. So our growers saw solid high-yielding performance, and I think that we're very pleased with what we have seen. We're on track with our strategy. We continue to lead in doubles, triples continue to line up with competition. At AcreMax 1, it's in line with our Herculex extra trials, no yield loss there and the convenience on the below-the-ground insects. And we are performing the competition there. So we're on plan with AcreMax 1 and Nick mentioned the 1 million units going into next year. So I think from a corn standpoint, we're very pleased with our progress. In soy, what we're seeing at a Y series, farmers have thrilled. This year, the value proposition is working and we're only 60% penetrated in Y series in 2010, so we got more room to go there next year. And so I think that we're very, very pleased. And Rynaxypyr, you look at the crop protection side. It's just tremendous, the gains we're getting there and really noble product, and with plain view coming in, as Nick mentioned, I think that's more opportunity for us. So I think coming through our pipeline looks good. We got good momentum coming out of '10 and going into '11 and we're on track. So we're very pleased with our results there.

[Kevin McCarthy:]

Just as a quick follow-up if I may, how large was the earnings drag associated with the Nutrition and Health piece of the segment on a year-over-year basis?

[Ellen Kullman:]

Earnings, I think it's about, I don't think it's any bigger or smaller. I think it's about the same as what has been.

[Operator:]

Our next question comes from Don Carson from Susquehanna.

[Donald Carson:]

Just to continue on the Ag theme, Ellen, you had some good share gains, you're number one in the soy now, you kind of tied for first in corn but you had a bit of a holiday from competition given your competitor had some pricing performance issues. So as they've cut prices aggressively, what's your outlook for share next year? And it does look like we're going to have fresh record [ph] corn acreage once again. Is there going to be a seed availability issue and is this strong planting outlook positive for your pricing realizations?

[Ellen Kullman:]

Well, Don, I respectfully say, I didn't really feel there was a holiday from competition. I think competition is very strong certainly and things come and go but I view this as a very competitive area. I think as we look out next year, I think we've got good momentum going for us. I think that the issue of availability I don't see. I see what our forecast and where we are. I think that we're very happy given what we're seeing in terms of the projections on acreage and things like that. And I think it's based on our direct-to-market view. I think we spend a lot of time with the growers, really focusing on what the value proposition is. I think there's a lot of noise out there around what competitors will and won't do. But it's our direct engagement with the customer on the total value proposition that I think is an enabler for us in this area. So I think that the time will tell, we'll certainly get into a lot more detail on this as we see the exact results that come out of all of our trials. But I think right product, right acre is working, and I think it's a differentiator for us.

[Donald Carson:]

Any comments on the pricing outlook, because obviously corn prices have firm considerably but your competitor also significantly cut their list prices on some of their new products? What's your expectation for pricing next year in seed?

[Ellen Kullman:]

Yes, I think that based on the value proposition and yield increases, I think pricing will be up. I think the exact nature of it is going to depend on how the whole season plays out, so we've got a lot of time to focus on that.

[Operator:]

Our next question comes from Edward Yang from Oppenheimer.

[Edward Yang:]

Your slide on Performance Materials mentions restocking slowing and some inventory monitoring the inventory situation. We'd like to appreciate some color on that. And also maybe an accounting question for Nick, D&A was down sequentially and it was down year-over-year. What led to that? And are you still on track to spend about $1.6 billion in CapEx this year?

[Nicholas Fanandakis:]

Let me start with the CapEx question. We have been saying original expectation was about $1.6 billion. We're going to be lower than that. We're going to be in the range of about $1.4 billion for the year. As you start to gear back up on that capital spend, that engine just takes a little bit longer, but we are now at that kind of rate. But I expect this year to be about $200 million less than I originally forecasted. As for the D&A, really is around asset sales that occurred in small divestitures and the purchase accounting relating to that. And your first question, Ed, was around what again?

[Edward Yang:]

Just a moment, I'll reopen...

[Ellen Kullman:]

Nick, I think his question was around some comments about restocking for Performance Materials and if you could give some color on that.

[Nicholas Fanandakis:]

Yes, I think if you look at Performance Materials and you got to look at their position in the supply chain and where they service industries such as the Automotive segment, and really, we don't see the level of holiday time that was originally projected, so we continue to see some volume increases in that regard. But as we said, we're not going to have the same level of year-over-year increase in Automotive that we saw in quarter three, which was significantly up versus what we're going to see in quarter four, 8% year-over-year for global in quarter three and about down 1% in quarter four.

[Operator:]

Our next question comes from P.J. Juvekar from Citi.

[P.J. Juvekar:]

Good question as an overall company. You mentioned that you're still benefiting from some inventory builds in end markets. Where do you think inventories are in different end markets? Can you just give us a flavor whether we're coming through the end of it or you're going to see auto declines of up 1% or auto build declines of 1% in 4Q? Just give us some flavor about where do you see inventories in end market?

[Ellen Kullman:]

So in the comment on inventory builds, it's been stance but it's been there, especially in places like Performance Materials where they are third tier, so the funnel has to be filled. We don't see it as much for instance in Coatings, which is first tier and direct with the automotive maker. We believe people are going to be conservative with inventories coming through the end of the year. At the end of the day for all of us, cash still remains to be a focus area, and we think that the people are going to be cautious and are going to make decisions right for them. So we're not anticipating an increase in inventories. As a matter of fact, we're anticipating the people will be very moderating with them as they exit the year.

[Operator:]

Our next question comes from Laurence Alexander from Jefferies.

[Lucy Watson:]

This is Lucy Watson on for Laurence this morning. I guess going back to Rynaxypyr, with your expectation of sales exceeding $300 million this year, does that reset the bar or should we consider 2010 as a peak year?

[Ellen Kullman:]

No, I'd suggest I have that conversation with the president of that unit, and that's just great, great performance by our guys. And I think the bar is going to get reset there as we go through these execution reviews in the next couple of weeks.

[Operator:]

Our next question comes from Mark Connelly from CLSA.

[Mark Connelly:]

When I look at photovoltaics, the performance obviously has been excellent. As we see all the new polysilicon capacity coming online in the next couple of years, do you worry about the impact on the module market if we start to see inflation in the underlying raw materials?

[Ellen Kullman:]

I think that cost have come down with capacity increases in the module market. I think we've seen that in the last year. I think that's been an enabler as some of the movement in feed and tariffs and things like that in different countries to enable there still to be a value proposition for the installation of these. We're focused on innovation on our materials that go into these markets to provide higher efficiency and to really help them create the payback and the return on the modules. There are still a way to go there but we see constantly company is reaching out to us, engaging around the efficiency equation and how to create more in that space. So I still think there's a way to go there.

[Operator:]

We have a question from Frank Mitsch from BB&T Capital Markets.

[Frank Mitsch:]

Ellen, you were talking during the discussion about the fourth quarter progressing in a more moderate pace. Now your volumes were up 21% in the second quarter, up 14% in the third quarter, obviously, 14% is still extremely strong. Are you just looking at the pace of business moderating in terms of being more difficult comps, or do you believe that the absolute level of business absent seasonality has been moderating as well?

[Ellen Kullman:]

I think it's the comps and I think it's the seasonality. And I think that that's what we have to take into account as we look at the fourth quarter.

[Operator:]

Our next question comes from Jeff Zekauskas from JPMorgan.

[Jeffrey Zekauskas:]

Maybe this is a question for Nick. Your SG&A expense had been running up about $100 million per quarter for the first two quarters. And in this quarter, it was basically flat or up $10 million. Why was that? What was the change in this quarter relative to the previous quarters? And can you also say what the change in your raw materials was sequentially?

[Nicholas Fanandakis:]

So when you look at SG&A, let me take a step back. When we look at how we're going to spend our investment dollars, whether that be R&D, sales and marketing, et cetera, we have a rigorous process we go through around portfolio of initiatives. And we went through that and decided there were going to be certain strategic areas that we were going to focus on in sales and marketing initiatives. And a lot of that work was done in that first half of the year. Areas such as in Pioneer, for example. And so that's what you're seeing there, Jeff. As far as the second part on raw material costs, sorry. When you look at the raw material costs, keep in mind a couple of things, Jeff. Keep in mind, first, that we're looking and comparing this against an all-time low point in the third quarter of 2009. When you look at the first half, we said we are about 1% increase year-over-year. We're seeing 5% to 6% for the full year increased. So what you're seeing here is with the productivity work that we've been doing around our working capital, some of these price increases are coming through, are getting through our inventory much quicker and getting to the earnings at a faster, faster rate as a result of that working capital productivity and the growth that we're seeing. Fourth quarter, we're seeing somewhere around similar year-over-year sort of increases and probably slightly less. But as I say for the full year, it'll be 5% to 6% year-over-year increase in raws.

[Operator:]

This concludes the Q&A portion of the conference call. I will now turn the call back over to Ms. Kullman for closing remarks.

[Ellen Kullman:]

Great. Thank you. And I want to close with a comment I made last quarter, and that comment was that we will continue to earn your expect and confidence with each quarter. Today's results reflect strong market positions, robust R&D pipelines, ongoing productivity and disciplined execution. And now our focus is on the fourth quarter and equally as important, position our businesses for continuing success in 2011. So I look forward to seeing many of you at our Investor Event on December 9 in Wilmington. You'll hear from the top leaders of the company, including the presidents of our 13 businesses, and we'll share details of our 2011 plans, as well as expectations for long-term growth and profitability. So thank you all for joining us on today's call, and I look forward to talking to you soon.

[Operator:]

This concludes today's DuPont 2010 Third Quarter Investor Call. You may now disconnect your lines at this time, and have a wonderful day.