Ei Du Pont/Titanium

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Exhibit 1
data)

Five-year Financial Summary, 1967-1971 ($ millions, except per share and ratio
1971

1970

1969

1968

1967

$3,848
357

$3,618
334

$3,632
356

$3,455
372

$3,079
314

Cash flow from operations

727

684

677

659

583

Earnings per share

Dividends per share

7.33
5.00

6.86
5.00

7.62
5.25

7.99
5.50

6.73
5.00

Average shares outstanding (000)

47,281

47,257

47,076

46,285

46,158

Balance Sheet
Net working capital
Net property, plant and equipment
Total assets

$1,221
2,002
3,999

$1,100
1,923
3,740

$1,107
1,803
3,453

$996
1,738
3,289

$874
1,724
3,071

307
3,095
3,402

216
2,964
3,180

186
2,854
3,040

162
2,697
2,859

125
2,557
2,682

60.23
143.75

57.67
113.38

55.53
133.38

53.09
162.75

50.22
163.25

$480
21
91

$438
37
30

$423
35
24

$394
23
37

$308
19
67

$592

$505

$482

$454

$394

Capital Expenditures

$454

$471

$391

$332

$454

Key Financial Ratios

Growth rate (%)
Sales
Profits

6.4
6.9

(0.4)
(6.2)

5.1
(4.3)

12.2
18.5

(2.5)
(19.3)

9.3
11.5

9.2
11.3

9.8
12.5

10.8
11.3

10.2
12.3

Current ratio

3.5

3.6

3.6

3.6

3.2

Debt and total capital (%)

9.0

6.8

6.1

5.7

4.7

Price earnings ratioa

Market value/Book valuea

19.6
2.4

16.5
2.0

17.5
2.4

20.4
3.1

24.2
3.3

Income Statement
Sales
Net income

Total debt
Shareholders equity
Total capital
Book value per share
Market value per sharea
Capital Sources
Cash flow retained
External equity financing (net)
Debt financing (net)
Total capital added

Return on sales (%)

Return on equity (%)

Based on midpoint of the years trading range for Du Ponts common shares.

Exhibit 2
Domestic TiO2 Production Capacity by Firm
1972 est.
1971
1970
000 tons
% 000 tons
% 000 tons
Du Pont
NL Industries
American Cyanamid
SCM
Gulf & Western
Kerr-McGee
Sherwin-Williams
PPG
Total (U.S. firms)
Imports
Total

325
230
90
75
70
45
25

860

860

38
27
10
9
8
5
3

100

100

277
268
82
78
70
39
27

841

841

33
32
10
9
8
5
3

100

100

252
268
90
78
70
37
27
18
840

840

%
30
32
11
9
8
5
3
2
100

100

1972 est.
000 tonsb
220
180
80
65
60
45
30

680
50
730

%
30
25
11
9
8
6
4

93
7
100

Total Domestic TiO2 Shipments by Firm, Including Importsa

1971
1970
1972 est.
1971
000 tonsb
%
000 tonsb
% $ millionsc
% $ millionsc
222
209
72
64
26
37
26
10
666
41
707

31
30
10
9
4
5
4
1
94
6
100

Source: Federal Trade Commission, In the Matter of E. I. du Pont de Nemours & Co., Docket No. 9108, Complaint Counsels Exhibits Nos. CX121A, B; CX223A, B; and CX222.
a

Excluded exports.

Thousands of tons shipped.

Dollar value of shipments.

206
210
53
58
30
31
21
9
618
58
676

30
31
8
9
4
5
3
1
91
9
100

100
95
40
25
30
20
10

320
20
340

29
28
12
7
9
6
3

94
6
100

98
102
30
26
11
12
12
4
296
15
311

1970
% $ millionsc
31
33
10
9
3
4
4
1
95
5
100

100
112
24
27
13
16
8
4
304
21
325

%
31
35
7
8
4
5
2
1
93
7
100

Exhibit 3
(tons 000)

TiO2 Production by Firm and Type of Process, 1970

Du Pontb
NL Industries
American Cyanamid
SCM
Gulf & Western
Kerr-McGee
Sherwin-Williams
PPG
Total

Total
Productiona

Sulfate
Process

Chloride
Process

211
229
56
51
33
35
19
10
644

43
193
47
48
33

364

168
36
9
3

35
19
10
280

Source: Federal Trade Commission, In the Matter of E. I. du Pont de Nemours &

Co., Docket No. 9108, Initial Decision, p. 11.
Differences between total production and total shipments (see Exbibit 2)
represent adjustments to TiO2 nventory.
a

Only Du Pont had chloride process production using low-grade feedstock; all
others used high-grade feedstock.
b

Exhibit 4

TiO2 Market Forecasts under Alternative Strategies for Du Pont, 1973-1985

Growth Strategy
Size of
Marketa
(tons 000)

1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

752
774
798
822
846
872
898
925
952
981
1,010
1,041
1,072

Cost of New
Capacity ($
per ton)
900
927
955
983
1,013
1,043
1,075
1,107
1,140
1,174
1,210
1,246
1,283

Pretax
Operating
Expensesb
($ per ton)
330
390
460
540

Average Gross
Selling Price ($
per ton)
540
640
750
880

580
620
660
690
710
740
770
810
850

Du Pont
Market
Share (%)
35
40
47
47

950
1,010
1,070
1,130
1,190
1,250
1,310
1,370
1,430

Maintain Strategy
Du Pont
Capacity
(tons 000)
350
375
400
421

51
52
52
55
58
59
61
62
64

Total demand for TiO2 is forecast to grow at 3% annually and is not considered to be very sensitive to price.

Pretax operating expense per ton includes depreciation allowances but excludes interest expense.

Average Gross
Selling Price ($
per ton)
555
665
760
890

443
475
505
530
552
579
616
645
685

955
1,015
1,070
1,120
1,170
1,210
1,270
1,320
1,370

Du Pont
Market
Share (%)
35
40
45
45

Du Pont
Capacity
(tons 000)
340
350
360
370

45
45
45
45
45
45
45
45
45

381
392
404
416
428
441
455
468
482

Price
Differenti
al
-15
-25
-10
-10
-5
-5
0
10
20
40
40
50
60

Sales
Year
Total MKT Vol
Du Pont Mkt Share
Du Pont Volume
Existing Capacity
Incremental
Capacity
Price per ton

1973
752
35%

Profit per ton

1975
775

40%
263

45%
310
325

0
555

0
665

760

555
330

45%
325

760
460

45

225

275

300

56
955

40

890
540
34

381
325

890
26

665
390

846
45%

370

34

1977
822

359

325

1976
798

325

Incremental Sales
Profits
price per ton
Expenses Per ton
Incremental
Capacity

1974

53

955
580
45
350

56
375

1978

1979

1980

1981

1982

872
45%
392
325

898
45%
404
325

925
45%
416
325

953
45%
429
325

981
45%
442
325

67
1,015

79
1,070

91
1,120

104
1,170

117
1,210

102

121

141

68

1,015

85

1,070

1,120

1,170

1,210

620

660

690

710

740

67

79

91

104

117

395

410

430

460

470

1,983
1011
45%
455
325

1,984
1041
45%
468
325

1,985
1072
45%
482
325

130
1,270

143
1,320

157
1,370

165

189

216

1,270

1,320

1,370

770

810

850

130

143

157

500

510

520

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Sales
Year
Market Volume
Duponts SOM
Dupont's Expected Capcity
Duponts Volume
Existing Capacity
Increment Tonnage from New Capacity
Price per ton
Incremental Sales ( in'000)
Price per ton
Cost per ton
Pre Tax Profit/ton
Incremental Capacity Profit
Inc Pretax Profit
Tax ( @ 48%)
INC EBIAT
Cost of plants/per ton
Tons Added
Incremental Expenditure

1973
752
35
340
263.2
325
0
555
0
555
330
225
0
0
0
0
900
15
14

1974
774
40
350
309.6
325
0
665
0
665
390
275
0
0
0.0
0
927
10
9

1975
798
45
360
359.1
325
34.1
760
26
760
460
300
34
10
4.9
5
955
10
10

1976
822
45
370
369.9
325
44.9
890
40
890
540
350
45
16
7.5
8
983
10
10

1977
846
45
381
380.7
325
55.7
955
53
955
580
375
56
21
10.0
11
1,013
11
11

1978
872
45
392
392.4
325
67.4
1,015
68
1015
620
395
67
27
12.8
14
1,043
11
11

1979
898
45
404
404.1
325
79.1
1,070
85
1070
660
410
79
32
15.6
17
1,075
12
13

1980
925
45
416
416.25
325
91.25
1,120
102
1120
690
430
91
39
18.8
20
1,107
12
13

1981
952
45
428
428.4
325
103.4
1,170
121
1170
710
460
103
48
22.8
25
1,140
12
14

1982
981
45
441
441.45
325
116.45
1,210
141
1210
740
470
116
55
26.3
28
1,174
13
15

1,983
1,010
45
455
454.5
325
129.5
1,270
164
1270
770
500
130
65
31.1
34
1,210
14
17

1,984
1,041
45
468
468.45
325
143.45
1,320
189
1320
810
510
143
73
35.1
38
1,246
13
16

1,985
1,072
45
482
482.4
325
157.4
1,370
216
1370
850
520
157
82
39.3
43
1,283
14
18

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Sales
Year
Total Market Volume
Duponts Share
Duponts Volume
Duponts Existing Capcity
Incremental Ton from New Capacity
Price per ton
Incremental Rev from New Cap
Price/Ton diff * Tonnage of Old Cap
Inc Revenue old capacity

Price/Ton
Cost/Ton
Pretax Profit/ton
Incr ton over existing
Incr Pretax Profit
Tax(1-0.48)
Inc EBIAT New Cap
Inc Rev Old Capacity
*(1-t)=0.52
INC EBIAT Old Cap
Total EBIAT ( 21+18)
Capex/Ton Inc
Tons Added
Inc Exp Capital

1973
752
35
263
325
0
540
0
-5

1974
774
40
310
325
0
640
0
-8

1975
798
47
375
325
50
750
38
-3

1976
822
47
386
325
61
880
54
-3

1977
846
51
431
325
106
950
101
-2

540
330
210
0
0

640
390
250
0
0

750
460
290
50.06
15

880
540
340
61.34
21

950
580
370
106.46
39

1978
872
52
453
325
128
1,010
130
-2

1979
898
52
467
325
142
1,070
152
0

1980
925
55
509
325
184
1,130
208
3

1981
952
58
552
325
227
1,190
270
7

1982
981
59
579
325
254
1,250
317
13

1,983
1,010
61
616
325
291
1,310
381
13

1,984
1,041
62
645
325
320
1,370
439
16

1,985
1,072
64
686
325
361
1,430
516
20

1,010

1,070

1,130

1,190

1,250

1,310

1,370

1,430

620
390
128.44
50

660
410
141.96
58

690
440
183.75
81

710
480
227.16
109

740
510
253.79
129

770
540
291.1
157

810
560
320.42
179

850
580
361.08
209