UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-815
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0014090
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1007 Market Street, Wilmington, Delaware 19898
(Address of Principal Executive Offices)
(302) 774-1000
(Registrant's Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
680,898,159 shares of common stock, $0.60 par value, were outstanding at
October 31, 1994.
1
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Form 10-Q
E. I. DU PONT DE NEMOURS AND COMPANY
Table of Contents
Page
----
Part I
Item 1. Financial Statements
Consolidated Income Statement ................................. 3
Consolidated Statement of Cash Flows .......................... 4
Consolidated Balance Sheet .................................... 5
Notes to Financial Statements ................................. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Results ............................................. 7
Industry Segment Performance .................................. 7
Consolidated Industry Segment Information ..................... 9
Financial Condition ........................................... 11
Financial Instruments ......................................... 11
Restructuring ................................................. 13
Part II
Item 1. Legal Proceedings ...................................... 14
Item 6. Exhibits and Reports on Form 8-K ....................... 16
Signature ......................................................... 17
Exhibit Index ..................................................... 18
Exhibit 10.7 - Stock Performance Plan of E. I. du Pont
de Nemours and Company ........................................ 19
Exhibit 10.9 - Salary Deferral & Savings Restoration Plan of
E. I. du Pont de Nemours and Company .......................... 29
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges .. 32
2
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<TABLE>
Form 10-Q
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Nine Months Ended
CONSOLIDATED INCOME STATEMENT<Fa> September 30 September 30
- - ----------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1994 1993 1994 1993
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES ............................................ $ 9,845 $ 9,231 $29,196 $27,847
Other Income ..................................... 184 147 667 508
------- ------- ------- -------
Total ........................................ 10,029 9,378 29,863 28,355
------- ------ ------- -------
Cost of Goods Sold and Other Expenses ............ 7,373 6,951 21,540 20,823
Selling, General and Administrative Expenses ..... 708 782 2,081 2,331
Depreciation, Depletion and Amortization ......... 797<Fb> 716 2,170<Fb> 2,076
Exploration Expenses, Including Dry Hole Costs
and Impairment of Unproved Properties .......... 92 91 204 241
Interest and Debt Expense ........................ 145 132 435 452
Restructuring Charges<Fc>......................... - 1,835 - 1,835
------- ------- ------- -------
Total ........................................ 9,115 10,507 26,430 27,758
------- ------- ------- -------
EARNINGS (LOSS) BEFORE INCOME TAXES .............. 914 (1,129) 3,433 597
Provision for Income Taxes ....................... 267<Fd> (449)<Fe> 1,352<Fd> 268<Fe>
------- ------- ------- -------
NET INCOME (LOSS) ................................ $ 647 $ (680) $ 2,081 $ 329
======= ======= ======= =======
EARNINGS (LOSS) PER SHARE OF COMMON STOCK<Ff>..... $ .95 $ (1.01) $ 3.05 $ .48
======= ======= ======= =======
DIVIDENDS PER SHARE OF COMMON STOCK .............. $ .47 $ .44 $ 1.35 $ 1.32
======= ======= ======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
3
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<TABLE>
Form 10-Q
<CAPTION>
Nine Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS<Fa> September 30
- - ---------------------------------------------------------------------------------------------
(Dollars in millions) 1994 1993
- - ---------------------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS
Net Income ........................................................ $ 2,081 $ 329
Adjustments to Reconcile Net Income to Cash
Provided by Operations:
Depreciation, Depletion and Amortization ...................... 2,170 2,076
Dry Hole Costs and Impairment of Unproved Properties .......... 70 122
Other Noncash Charges and Credits - Net ....................... (148) 852
Change in Operating Assets and Liabilities - Net .............. 219 345
------- -------
Cash Provided by Operations ................................. 4,392 3,724
------- -------
INVESTMENT ACTIVITIES
Purchases of Property, Plant and Equipment ........................ (2,003) (2,634)
Investment in Affiliates .......................................... (67) (68)
Payments for Businesses Acquired .................................. - (409)
Proceeds from Sales of Assets ..................................... 262 792
Miscellaneous - Net ............................................... 107 (109)
------- -------
Cash Used for Investment Activities ......................... (1,701) (2,428)
------- -------
FINANCING ACTIVITIES
Dividends Paid to Stockholders .................................... (925) (900)
Net Increase (Decrease) in Borrowings ............................. (814) 19
Common Stock Issued in Connection with Compensation Plans ......... 88 56
------- -------
Cash Used For Financing Activities .......................... (1,651) (825)
------- -------
Effect of Exchange Rate Changes on Cash ............................. 122 (54)
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS ............................... $ 1,162 $ 417
======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
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Form 10-Q
<CAPTION>
CONSOLIDATED BALANCE SHEET<Fa> September 30 December 31
- - ---------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1994 1993
- - ---------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents .................................... $ 2,402 $ 1,240
Accounts and Notes Receivable ................................ 5,109 4,848
Inventories<Fg>............................................... 3,965 3,818
Prepaid Expenses ............................................. 261 231
Deferred Income Taxes ........................................ 469 762
------- -------
Total Current Assets ....................................... 12,206 10,899
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation,
depletion and amortization (September 30, 1994 - $27,982;
December 31, 1993 - $26,503) ................................. 20,959 21,423
INVESTMENT IN AFFILIATES ....................................... 1,709 1,607
DEFERRED INCOME TAXES .......................................... 124 198
OTHER ASSETS ................................................... 2,916 2,926
------- -------
TOTAL ...................................................... $37,914 $37,053
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ............................................. $ 2,470 $ 2,444
Short-Term Borrowings and Capital Lease Obligations .......... 2,081 2,796
Income Taxes ................................................. 551 321
Other Accrued Liabilities .................................... 3,734 3,878
------- -------
Total Current Liabilities .................................. 8,836 9,439
LONG-TERM BORROWINGS AND CAPITAL LEASE OBLIGATIONS ............. 6,517 6,531
OTHER LIABILITIES .............................................. 8,451 8,200
DEFERRED INCOME TAXES .......................................... 1,437 1,466
------- -------
Total Liabilities .......................................... 25,241 25,636
------- -------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES ................ 200 187
------- -------
STOCKHOLDERS' EQUITY
Preferred Stock .............................................. 237 237
Common Stock, $.60 par value; 900,000,000 shares authorized;
shares issued at September 30, 1994 - 680,828,164;
December 31, 1993 - 677,577,437 409 407
Additional Paid-In Capital ................................... 4,745 4,660
Reinvested Earnings .......................................... 7,082 5,926
------- -------
Total Stockholders' Equity ................................. 12,473 11,230
------- -------
TOTAL ...................................................... $37,914 $37,053
======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
5
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Form 10-Q
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions)
[FN]
<Fa>These statements are unaudited, but reflect all adjustments that, in the
opinion of management, are necessary to provide a fair statement of
the financial position, results of operations and cash flows for the
dates and periods covered. All such adjustments are of a normal
recurring nature. Certain reclassifications of 1993 data have been
made to conform to 1994 classifications.
<Fb>Includes $115 related to write-down of certain North Sea oil properties
held for sale.
<Fc>Includes charges for asset write-downs, employee separation costs,
facility shutdowns, and other restructuring costs.
<Fd>Includes a benefit of $127 principally related to a favorable change in
tax status resulting from a transfer of properties among certain North
Sea affiliates.
<Fe>Includes a benefit of $265 resulting from tax law changes, primarily in
the United Kingdom.
<Ff>Earnings per share are calculated on the basis of the following average
number of common shares outstanding.
Nine Months Ended September 30:
1994 -- 679,686,654
1993 -- 676,367,531
<Fg>Inventories September 30 December 31
----------- 1994 1993
------------ -----------
Chemicals ................................. $ 214 $ 250
Fibers .................................... 667 571
Polymers .................................. 596 550
Petroleum ................................. 1,358 1,367
Diversified Businesses .................... 1,130 1,080
------ ------
Total ................................... $3,965 $3,818
====== ======
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Form 10-Q
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(a) Results of Operations
(1) Financial Results:
The company's earnings improved in all chemical and
specialties segments, principally driven by higher sales volumes
and reduced fixed costs. Also, the Petroleum segment continued to
perform well in a challenging industry environment.
Net income for the third quarter 1994 was $647 million, or
$.95 per share, record earnings for any third quarter. This
compares to a net loss of $680 million, or $1.01 per share, for the
third quarter of 1993.
Last year's third quarter included nonrecurring charges of
$1.3 billion after-tax for restructurings, and tax benefits of
$265 million resulting from tax law changes. The current quarter
includes several offsetting nonrecurring items and tax benefits
that, in total, have no effect on earnings per share. After
adjusting both periods to exclude net nonrecurring charges and tax
benefits, earnings were up 86 percent.
Earnings per share for the first nine months of 1994 were a
record $3.05. This compares with $.48 earned in 1993. Excluding
nonrecurring charges and tax benefits from both periods,
year-to-date earnings were $3.12 per share versus $1.98 last year,
up 58 percent. Year-to-date sales totaled $29.2 billion, 5 percent
higher than prior year.
(2) Industry Segment Performance:
The following text and accompanying "Consolidated Industry
Segment Information" table compare business segment results for
the third quarter of 1994 with the same period last year, exclud-
ing the impact of nonrecurring items and special tax benefits
described in the accompanying segment footnotes.
Sales for the third quarter were $9.8 billion, up
7 percent from prior year. Petroleum segment sales were up
9 percent, principally reflecting increased U.S. refinery inputs
7
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Form 10-Q
and the impact of higher worldwide excise taxes. Combined
segments other than Petroleum were up 5 percent, all from higher
sales volume, as price levels, on average, were about equal to
last year. The largest percentage changes in sales volume were in
the European and Asian regions.
o Chemicals segment earnings were $104 million, up
$58 million, or 126 percent, principally attributable to
improved results for chemical specialties. Sales were up
11 percent, reflecting 9 percent higher volume and 2 percent
higher prices.
o Fibers segment earnings were $164 million, up $55 million,
or 50 percent, principally reflecting higher sales for
nylon, nonwovens, and "Lycra" spandex. Segment sales rose
6 percent, reflecting 6 percent higher sales volume, as
average selling prices remained unchanged.
o Polymers segment earnings were $177 million, up
$106 million, or 149 percent from last year. Engineering
polymers, packaging and industrial polymers, and
elastomers all continued strong. Segment sales were up
14 percent after adjusting for the absence of a previously
sold polyethylene business. The sales improvement
reflects 15 percent higher volume, partly offset by
1 percent lower prices.
o Petroleum segment earnings were $172 million, down
5 percent from prior year. Upstream earnings were
$84 million, 23 percent lower than last year, attributable
to lower international gas volumes, higher worldwide
exploration costs, lower U.S. natural gas prices and crude
oil volumes, more than offsetting lower costs. Downstream
earnings were $88 million, up 22 percent, largely
reflecting higher U.S. refined product margins and
refinery inputs.
o Diversified Businesses segment earnings totaled
$135 million, up $129 million from last year. This
reflects the recovery of coal earnings which were
adversely affected last year by strikes, and higher
earnings from crop protection chemicals and medical
products. Segment sales were up 1 percent after adjusting
for the absence of the sporting goods business which was
sold last year. Sales volume was equal to last year,
while prices were 1 percent higher, primarily reflecting a
weaker U.S. dollar.
8
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<TABLE>
Form 10-Q
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Nine Months Ended
CONSOLIDATED INDUSTRY SEGMENT INFORMATION September 30 September 30
- - ----------------------------------------------------------------------------------------------------------------
(Dollars in millions) 1994 1993 1994 1993
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES
- - -----
Chemicals ........................................ $ 983 $ 884 $ 2,790 $ 2,665
Fibers ........................................... 1,677 1,588 5,044 4,565
Polymers ......................................... 1,577 1,424 4,679 4,411
Petroleum ........................................ 4,344 3,995 12,345 11,712
Diversified Businesses ........................... 1,264 1,340 4,338 4,494
------- ------ ------- -------
Total ........................................ $ 9,845 $9,231 $29,196 $27,847
======= ====== ======= =======
AFTER-TAX OPERATING INCOME (LOSS)<Fa><Fb><Fc>
- - ---------------------------------
Chemicals ........................................ $ 77 $ (60) $ 261 $ 100
Fibers ........................................... 164 (147) 485 65
Polymers ......................................... 193 (67) 523 117
Petroleum ........................................ 146 239 562 649<Fd>
Diversified Businesses ........................... 169 (582) 525<Fe> (354)
------- ------ ------- -------
Total ........................................ 749 (617) 2,356 577
Interest and Other Corporate
Expenses Net of Tax ............................ (102) (63) (275) (248)
------- ------ ------- -------
NET INCOME (LOSS) ................................ $ 647 $ (680) $ 2,081 $ 329
- - ----------------- ======= ====== ======= =======
<FN>
<Fa>1994 includes the following third-quarter (charges)/benefits:
Chemicals $(27) (1)
Polymers 16 (2)
Petroleum (26) (2)
Diversified Businesses 34 (2)
----
$ (3)
====
(1) Associated with discontinuation of certain products and asset sales
and write-downs.
(2) Reflects adjustments in estimates associated with the third quarter
1993 restructuring charge. In addition, the Petroleum segment
also includes additional charges for employee separation costs, a
loss of $95 from write-down of certain North Sea oil properties
held for sale and a benefit of $127 principally related to a
favorable change in tax status resulting from a transfer of
properties among certain North Sea affiliates.
</TABLE>
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Form 10-Q
[FN]
<Fb>1993 includes the following third-quarter charges for asset write-downs,
employee separation costs, facility shutdowns, and other restructuring
costs:
Chemicals $ 112 (1)
Fibers 266 (2)
Polymers 148 (3)
Petroleum 172 (4)
Diversified Businesses 597 (5)
------
$1,295
======
(1) Includes $59 for asset write-downs and facility shutdowns for the
fluorochemicals and specialty chemicals businesses.
(2) Includes $46 for facility shutdowns and asset write-downs,
primarily for the nylon business.
(3) Includes $64 for shutdown of a portion of a polymers plant in
LaPorte, Texas.
(4) Includes $147 for asset write-downs of certain North American
petroleum-producing properties.
(5) Includes $448 for asset write-downs, primarily intangibles and
facilities for the printing and publishing business.
<Fc>1993 includes a third-quarter benefit of $265 resulting from tax law
changes. The Petroleum segment reflects $230, primarily due to a
reduction in deferred U.K. petroleum revenue taxes, and $35 is
reflected in the remaining segments (Chemicals, $6; Fibers, $10;
Polymers, $10; Diversified Businesses, $9).
<Fd>Includes a $21 loss from sale of petroleum-producing properties and a $32
gain from exchange of North Sea properties.
<Fe>Includes $47 charge associated with "Benlate" DF 50 fungicide recall.
10
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Form 10-Q
(b) Financial Condition at September 30, 1994
The following comments pertain to the "Consolidated Statement of
Cash Flows." DuPont recorded a net cash inflow before financing activities
of $2.7 billion for the first nine months of 1994, as compared to
$1.3 billion for the same period in 1993. The increase is attributable to
higher net income and reduced capital expenditures. The inflow was used to
pay dividends of $0.9 billion, increase cash and cash equivalents by
$1.2 billion and decrease consolidated borrowings by $0.8 billion.
"Payments for Businesses Acquired" reflects primarily the cash
payment for the 1993 purchase of Imperial Chemical Industries P.L.C.'s nylon
business ($380 million). "Proceeds from the Sales of Assets" for 1993
reflects mainly the cash inflow from the sale of the Connector Systems
business ($270 million) and the acrylics business ($280 million). There
have been no individually significant asset sales to date in 1994.
"Purchases of Plant, Property and Equipment" totaled $2.0 billion
during the first nine months of 1994, versus $2.6 billion during the same
period last year. This largely reflects planned reductions in capital
expenditures for the chemicals and specialties businesses across all
business segments. It is likely that capital expenditures will be less than
$3.0 billion for the year versus a budget of $3.4 billion.
Certain ratios are shown below:
At 9/30/94 At 12/31/93
---------- -----------
Debt Ratio (total debt to total
capitalization) 40.4% 45.0%
Current Ratio (current assets
to current liabilities) 1.4:1 1.2:1
Days' sales outstanding averaged 37 days in the third quarter, down one day
from both the second quarter of 1994 and the third quarter of 1993. The
ratio of earnings to fixed charges is 6.0 for the first nine months of 1994,
up from 2.0 for the year 1993. The 1993 ratio reflects $1.8 billion
(pretax) of restructuring charges.
(c) Financial Instruments
In the normal course of business the company enters into financial
instrument transactions in order to hedge its exposure to market risk
regarding currency translations, interest rates and petroleum prices.
Procedures are in place to regularly monitor and report to management on
market and counterparty credit risks associated with these financial
instruments.
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Form 10-Q
The company routinely uses forward exchange contracts to hedge its
net exposures, by currency, related to the foreign currency denominated
monetary assets and liabilities of its operations. The primary business
objective of this hedging program is to maintain an approximately balanced
position in foreign currencies so that translation gains and losses
resulting from exchange rate changes, net of related tax effects, are
minimized. In addition, the company, from time to time, will enter into
forward exchange contracts to establish with certainty the U.S. dollar
amount of a future firm commitment denominated in a foreign currency.
Decisions regarding whether or not to hedge a given firm commitment are made
on a case by case basis taking into consideration the amount and duration of
the exposure, market volatility, and economic trends.
DuPont uses interest rate swaps, interest and principal currency
swaps and structured medium-term financings as part of its financial risk
management program. Interest rate swaps involve the exchange of fixed for
floating rate interest payments that are fully integrated with underlying
fixed rate bonds or notes to effectively convert fixed rate debt into
floating rate debt. The swaps also involve the exchange of floating for
fixed rate interest payments that are fully integrated with commercial paper
or other floating rate borrowings to effectively convert floating rate debt
into fixed rate debt. Both types of interest rate swaps used by DuPont are
denominated in U.S. dollars, and do not involve the exchange of the
underlying notional principal amounts.
Interest and principal currency swaps are entered into by DuPont to
effectively convert concurrently issued foreign currency denominated bonds
into U.S. dollar denominated obligations (both interest and principal).
Interest and principal currency swaps allow the company to be fully hedged
against fluctuations in currency exchange rates and foreign interest rates
and to achieve U.S. dollar interest payments below the market rate for
borrowings of comparable maturity.
The company also enters into structured medium-term financings
consisting of: 1. a structured medium-term note with interest and/or
principal payments (denominated in either U.S. dollars or foreign
currencies) determined using a specified calculation incorporating changes
in currency exchange rates or some other financial indices, and 2. a
concurrently executed structured medium-term swap agreement that, for any
and all calculations of the note's interest and/or principal payments over
the term of the note, provides a dollar for dollar offset such that the note
is effectively converted to a U.S. dollar denominated fixed principal amount
with U.S. dollar denominated fixed or floating interest rate payments below
the market interest rate, at the date of issuance, for borrowings of
comparable maturity.
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Form 10-Q
The company trades futures contracts (commodity exchanges and over
the counter) for the purpose of hedging the net cash market risk exposure of
the Petroleum segment's marketing supply, refining supply, natural gas and
gas products supply, and equity production (crude and natural gas).
Commodity trading in futures contracts is a natural extension of cash market
trading and is used to physically acquire about 15% of North America
refining crude supply requirements. The commodity futures market has
underlying principles of increased liquidity and longer trading periods than
the cash market and is one method of reducing exposure to the price risk
inherent in the petroleum business. Typically, trading is conducted to
manage price risk around near term (30-60 days) supply requirements.
Occasionally, as market views and conditions allow, longer term (usually 3-9
months, but generally not more than 12 months) positions will be taken to
manage price risk for the company's equity production (crude and natural
gas) or net supply requirements (anticipatory hedges). These positions may
not exceed equity production or net supply requirements for the hedge
period. The company's use of futures contracts reduces the effects of price
volatility, thereby protecting against adverse short-term price movements
and, limiting, somewhat, the benefits of favorable short-term price
movements.
In addition to hedge positions, the company, on a limited basis,
enters into other trading positions. These positions are marked to market
at the end of each period. After-tax gain/(loss) from such trading has been
insignificant.
(d) Restructuring
In the third quarter 1993, the company recorded a $1.8 billion
(pretax) restructuring charge. A principal component of such charge related
to employee separation costs (approximately $665 million pretax). As of
September 30, 1994, about $395 million (pretax) is reflected as a liability
in the company's balance sheet. Under the terms of separation arrangements,
certain of the deferred payments extend beyond 1995.
The remaining portion ($1.2 billion pretax) of the $1.8 billion
restructuring charge related to asset write-downs and facility shutdowns.
As of September 30, 1994, this portion of the restructuring is substantially
complete.
Third quarter 1994 results for the Polymers and Diversified
Businesses segments included a $78 million (pretax) benefit associated with
adjustments of restructuring provisions established in September 1993. Such
adjustments reflect the higher than anticipated proceeds from the disposal
of a portion of a plant previously written down and further refinement of
certain of the other items reflected in the 1993 restructuring charge. The
Petroleum segment's results for the current quarter reflected a pretax
charge of about $25 million related to changes in estimates of prior
restructuring charges.
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Form 10-Q
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
In 1991, DuPont received claims by growers that use of "Benlate"
DF 50 fungicide had caused crop damages. Based on the belief that "Benlate"
DF 50 would be found to be a contributor to the claimed damage, DuPont paid
claims. In 1992, after 18 months of extensive research, DuPont scientists
concluded that "Benlate" DF 50 was not responsible for plant damage reports
received since March 1991. Concurrent with these research findings, DuPont
stopped paying claims relating to those reports. To date, DuPont has been
served with more than 550 lawsuits in several jurisdictions, principally
Florida, Hawaii, and Puerto Rico, by growers who allege plant damage from
using "Benlate" DF 50 fungicide. Currently two trials are underway in
Hawaii involving 11 lawsuits, one trial in Puerto Rico involving eight
lawsuits, and one other trial is expected to commence before the end of the
year. In addition, DuPont has recently settled a block of 10 other lawsuits
containing 37 consolidated cases in Hawaii. This is in addition to the two
large blocks of 220 cases (187 lawsuits) and 59 cases (29 lawsuits) settled
earlier this year. In the three jury trials in 1994, juries in Florida and
Alabama found no product defect and no damages attributable to "Benlate".
Over half of the lawsuits brought against the company since 1991 have been
disposed of. Where juries have in previous years awarded growers any
damages, those damages have been, on average, less than a third of what they
sought, and growers have been found to share responsibility for their
claimed losses. DuPont believes that "Benlate" DF 50 fungicide did not
cause the alleged damages and intends to continue to prove this in ongoing
matters.
Since 1989 DuPont has been served with approximately 100 lawsuits
in several jurisdictions, principally Texas, Florida, Maryland and Arizona,
alleging damages as a result of leaks in certain polybutylene plumbing
systems. In most cases, DuPont is a codefendant with Shell, Hoechst-
Celanese and other plumbing parts manufacturers. The polybutylene plumbing
systems consist of flexible pipe extruded from polybutylene connected by
fittings made of acetal resin. Shell Chemical is the sole producer of
polybutylene; the acetals are provided by Hoechst-Celanese and DuPont. The
number of commercial and dwelling units nationwide that have such plumbing
systems containing DuPont's acetal is unknown. During 1994, DuPont settled
a majority of the Texas lawsuits in which it was a defendant. The settle-
ments totaled approximately $34 million and covered 50,000 claimants. There
have been 81 settlements and three dismissals. DuPont has not been to trial
in any case. In addition, a nationwide class action is still pending in
Texas state court, and on October 24, 1994, a certification hearing was held
in the matter in Houston, Texas. Although the state court has not yet ruled
on the issue, certification of the class could lead to a class action
14
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Form 10-Q
settlement under the terms of which Shell, Hoechst-Celanese and DuPont would
establish a settlement fund of initially up to $750 million to be paid out
over a 13 year period. DuPont expects its share of the fund would be
relatively modest. The company's balance sheets reflect accruals for
estimated costs associated with these matters. Adverse changes in estimates
of such costs could result in additional future charges.
On October 15, 1993, the EPA filed a complaint in the U.S. District
Court for the Eastern District of Texas (Beaumont), against DuPont alleging
various violations of the Clean Water Act at the Sabine River Works.
Included in the complaint, which sought civil penalties of $1.4 million,
were alleged unauthorized discharges, effluent limitation violations and
monitoring and reporting violations under the plant's water permit. On
April 20, 1994, the government and DuPont negotiated a settlement under the
terms of which DuPont agreed to pay a civil penalty of $516,430 and to
implement a Supplemental Environmental Project with an estimated cost to
DuPont of $3.2 million. A consent decree incorporating the terms of the
settlement was entered by the District Court on October 11, 1994. DuPont is
required to pay the penalty portion of the settlement by November 11, 1994.
On April 11, 1994, the Texas Natural Resource Conservation
Commission (TNRCC) issued a Notice of Executive Director's Preliminary
Report and Petition for TNRCC Order assessing penalties of $122,640 for
alleged violations at DuPont's Beaumont Works Plant of the Texas Solid Waste
Disposal Act, the Texas Water Code and the applicable regulations. The
matter has been resolved at the staff level through settlement. DuPont,
without admitting the truth of any allegation, has agreed to pay a penalty
of $90,000. The Consent Order is expected to be approved by the Commission
before year-end 1994 with payment due within thirty days of approval.
On July 15, 1994, Conoco's (DuPont's energy subsidiary) Denver,
Colorado, refinery received a Notice of Violation (NOV) and Cease and Desist
Order from the State of Colorado for violations of its state clean water
permit. The NOV alleges twenty-one violations of effluent parameters and
other permit conditions from January 1993, to the present. Although the
State had indicated previously it would seek a penalty in excess of
$100,000, Conoco has reached an agreement with the State to settle the
alleged permit variances for payment of a fine of $30,000 and performance of
two supplemental environmental projects (SEP). The estimated cost of the
SEPs is around $150,000.
On August 26, 1994, DuPont was advised by the Delaware Attorney
General's Office that it was seeking a civil penalty of $100,000 in
connection with the accidental release on March 13, 1994, of low
pH wastewater from a landfill waste pond containing waste from DuPont's
Edge Moor, Delaware, titantium dioxide pigment plant. DuPont is seeking a
substantial reduction of the penalty sought.
15
<PAGE>
Form 10-Q
On September 23, 1994, DuPont filed a consent agreement with the
U.S. Environmental Protection Agency (EPA) resolving civil penalty claims
arising out of an EPA administrative complaint alleging that benomyl
products containing atrazine were distributed in violation of the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA). The settlement covers
products made from 1988 through early 1991. Under the settlement agreement,
DuPont will pay $1 million on behalf of itself and two contractors, Platte
Chemical Inc., and Lesco, Inc., also named as respondents in EPA's com-
plaint, and whom DuPont had earlier agreed to indemnify. The EPA had
brought the civil complaint in 1991 against DuPont, Platte, Lesco, and
another company, Terra International, Inc., seeking approximately
$2.3 million in civil penalties against the four companies. Terra settled
on its own behalf in 1992. Although DuPont continues to deny the allega-
tions stated in the EPA's complaint, the company believed it was in its best
interests to end this long running dispute.
The EPA filed on October 7, 1994, an administrative complaint
against DuPont proposing to assess $1.9 million in civil penalties for
distributing triazine herbicides with product labels that the EPA alleges
were not in compliance with its new Worker Protection Standards. The labels
were submitted to the EPA for approval in July 1993 and accepted by the EPA
in November. However, in March of 1994, the EPA notified DuPont of alleged
errors in the labels after most of the products had been shipped and were in
the distribution chain. DuPont has cooperated with the EPA in making label
changes and has issued supplemental labeling for all products that had been
distributed. DuPont believes the proposed penalties are unwarranted and
excessive and plans to contest or seek a substantial reduction of them.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibit index filed with this Form 10-Q is on page 18.
(b) Reports on Form 8-K
1. The company filed a Current Report on Form 8-K, dated
July 27, 1994, in connection with Debt Securities that
may be offered on a delayed or continuous basis under
Registration Statements on Form S-3 (No. 33-48128 and
No. 33-53327). Through this Form 8-K, a copy of the
Registrant's Earnings Press Release, dated July 27, 1994,
was filed under Item 7.
16
<PAGE>
Form 10-Q
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, thereunto duly authorized.
E. I. DU PONT DE NEMOURS AND COMPANY
(Registrant)
Date: November 10, 1994
--------------------------------------
By /s/C. L. Henry
--------------------------------------
C. L. Henry
Senior Vice President - DuPont Finance
(As Duly Authorized Officer
and Principal Financial
and Accounting Officer)
17
<PAGE>
Form 10-Q
EXHIBIT INDEX
Exhibit
Number Description
- - ------- -----------
10.7* Company's Stock Performance Plan, as last amended effective
September 28, 1994.
10.9* Company's Salary Deferral & Savings Restoration Plan effective
April 26, 1994.
12 Computation of Ratio of Earnings to Fixed Charges.
*Management contract or compensatory plan or arrangement required to be filed
as an exhibit to this Form 10-Q.
18
<PAGE>
Form 10-Q
Exhibit 10.7
E. I. DU PONT DE NEMOURS AND COMPANY
STOCK PERFORMANCE PLAN
Originally Adopted - November 12, 1957
Last Amended - September 28, 1994
19
<PAGE>
Form 10-Q
STOCK PERFORMANCE PLAN
I. PURPOSES
The purposes of this Stock Performance Plan (the "Plan") are:
(a) to provide greater incentive for employees who are or will be primarily
responsible for the growth and success of the business to exert their best
efforts on behalf of E. I. du Pont de Nemours and Company ("the Company");
and (b) to further the identity of interests of such employees with those of
the Company's stockholders generally by encouraging them to acquire stock
ownership in the Company.
II. FORM OF GRANTS
1. Grants under this Plan may be made in the form of stock
options, stock options accompanied by stock appreciation
rights, restricted stock or a combination of any of these forms
and may be made in replacement of or as alternatives to salary
or grants under any other plan or program of a plan company.
2. Stock options to purchase shares of the Company's common stock
granted under this Plan may be either incentive, performance or
other stock options qualified under the Internal Revenue Code
as in effect from time to time ("qualified stock options") or
stock options that are not qualified under the Internal Revenue
Code ("nonqualified stock options"), or a combination of
qualified and nonqualified stock options.
3. Stock appreciation rights may be granted by the Company under
this Plan upon such terms and conditions as the Compensation
and Benefits Committee may determine. Such rights may be
granted only when they accompany the concurrent grant of stock
options. Each stock appreciation right shall give the grantee
the right to receive a payment equal to the excess of the fair
market value of a share of the Company's common stock on the
date when such right is exercised over the option price
provided for in the accompanying stock option. Such rights may
be exercised only if the grantee exercises the accompanying
stock option by purchasing one share of the Company's common
stock for each stock appreciation right exercised. The number
of shares subject to exercise under an accompanying stock
option shall be automatically reduced by one share for each
stock appreciation right exercised.
4. Shares of restricted stock granted under this Plan shall be
subject to restriction, such as forfeiture and a minimum
vesting period. A grantee shall generally have all incidents
20
<PAGE>
Form 10-Q
of ownership in restricted stock, including the right to
dividends (unless otherwise restricted) and to vote. Shares
may be evidenced by book-entry registration, a stock
certificate registered in the grantee's name but held in the
Company's custody or issuance of an appropriate legended stock
certificate, as determined by the Compensation and Benefits
Committee.
III. LIMITATIONS ON GRANTS
1. The aggregate number of shares of the Company's stock which may
be made subject to stock options granted under this Plan shall
not exceed 36,000,000, or 5% of such number for any optionee,
during any five consecutive years, of which only 6,000,000
shares may be subject to restricted stock grants. The number
of stock appreciation rights which may be granted to any
optionee under this Plan shall not exceed 50% of the number of
shares made subject to an accompanying stock option.
2. If any stock option or restricted stock (without benefit of
dividends) granted under this Plan shall terminate or expire
for any reason without having been exercised or vested in full,
the shares not acquired under such grant shall become available
again for further grants under this Plan; provided also, that
shares withheld by or tendered to the Company as payment of
exercise price or other consideration or satisfaction of
withholding taxes shall become available again for further
grants to employees who are not executive officers; provided,
however, that the shares which become so available for further
grants shall not include any shares as to which a stock option
has been reduced by reason of receiving payments under
accompanying stock appreciation rights. The limitations set
forth above shall be subject to adjustment as provided in
Article XII hereof.
IV. ADMINISTRATION
1. Except as otherwise specifically provided, the Plan shall be
administered by the Compensation and Benefits Committee of the
Company's Board of Directors. The Compensation and Benefits
Committee shall be elected pursuant to the Bylaws of the
Company, and the members thereof shall be ineligible for grants
while serving on said Committee.
21
<PAGE>
Form 10-Q
2. The Compensation and Benefits Committee is authorized, subject
to the provisions of the Plan, from time to time to establish
such rules and regulations as it deems appropriate for the
proper administration of the Plan, and to make such
determinations and take such steps in connection therewith as
it deems necessary or advisable.
3. The Compensation and Benefits Committee shall, subject to the
provisions of the Plan, determine the time or times when stock
options will be granted, which employees, if any, shall be
granted stock options, the types of stock options to be
granted, whether they shall be granted singly or in
combination, when they shall be exercisable, the number of
shares to be covered by each stock option or options, and the
terms and conditions of such stock options; which employees, if
any, shall also be granted accompanying stock appreciation
rights, the number of stock appreciation rights which shall be
granted to each of them, and the terms and conditions of such
rights; and the time or times when restricted stock will be
granted, which employees, if any, shall be granted restricted
stock, the number of restricted shares to be granted, the
restrictions or conditions on the right to transfer or dispose
of such shares, and the terms and conditions of such restricted
stock, including the number, amount, and timing of vesting
increments.
4. The decision of the Compensation and Benefits Committee with
respect to any questions arising as to interpretation of this
Plan, including the severability of any and all of the
provisions thereof, shall be final, conclusive and binding.
5. The Company's Board of Directors may elect a Special Stock
Performance Committee pursuant to the Bylaws of the Company
which shall have and may exercise all the rights, powers and
duties of the Compensation and Benefits Committee specified in
this Plan for purposes of making grants for significant
achievements by employees who are not directors or executive
officers of the Company. The Special Stock Performance
Committee may also be authorized by the Compensation and
Benefits Committee to assume certain administrative
responsibilities under this Plan.
V. ELIGIBILITY FOR GRANTS
1. Grants under this Plan may be made to employees (including
those who are directors or executive officers of the Company)
as determined by the Compensation and Benefits Committee (or
22
<PAGE>
Form 10-Q
Board of Directors, if the grantee is a director of the
Company). In determining those employees to whom grants are to
be made, the Compensation and Benefits Committee (or Board of
Directors, if the beneficiary is a director of the Company) may
take into consideration present and potential contributions to
the Company's success by such employees, and any other factors
which the Compensation and Benefits Committee (or Board of
Directors, if the grantee is a director of the Company) may
deem relevant in connection with accomplishing the purposes of
the Plan.
2. The term "employee" may include an employee of a corporation or
other business entity in which the Company shall directly or
indirectly own fifty percent or more of the outstanding voting
stock or other ownership interest, but shall exclude any
director who is not also an officer or a full-time employee of
a plan company. The term "plan company" as used in this Plan
shall mean a business entity whose employees are eligible for
grants under this Plan). The term "grantee" as used in this
Plan means an employee to whom a grant has been made under this
Plan or, where appropriate, his or her successor in interest
upon death.
VI. RECOMMENDATIONS AND GRANTS
1. Recommendations for grants to members of the Board of Directors
shall be made by the Compensation and Benefits Committee.
Recommendations for grants to employees who are not members of
the Board of Directors shall be made to the Compensation and
Benefits Committee by the Office of the Chairman.
2. Any grant to a director shall be made in the sole discretion of
the Board of Directors, a majority of whose members taking
final action on any such grant shall be ineligible for grants
under Article V. Any grant to an employee who is not a member
of the Board of Directors shall be made by the Compensation and
Benefits Committee which shall take final action on any such
grant.
3. Grants may be made at any time under this Plan and in any of
the forms or combinations thereof provided in Article II
hereof. A grantee may receive and may hold more than one grant
under this Plan.
4. The date on which a grant shall be deemed to have been made
under this Plan shall be the date of the Compensation and
Benefits Committee (or Board of Directors, if the grantee is a
23
<PAGE>
Form 10-Q
director) authorization of the award or such later date as may
be determined by the Compensation and Benefits Committee (or
Board of Directors, if the grantee is a director) at the time
the grant is authorized. Each grantee shall be advised in
writing by the Company of a grant and the terms and conditions
thereof, which terms and conditions, as the Compensation and
Benefits Committee from time to time shall determine, shall not
be inconsistent with the provisions of this Plan.
VII. OPTION PRICE
The price per share of the Company's common stock which may be
purchased upon exercise of a stock option granted under this Plan shall be
determined by the Compensation and Benefits Committee, but shall in no event
be less than the fair market value of such share on the date the stock option
is granted, and in no event less than the par value thereof. The price so
determined also shall be applicable to any accompanying stock appreciation
right. For purposes of this Plan, fair market value shall be the average of
the high and low prices of the Company's common stock as reported on the
"NYSE-Composite Transactions Tape" on the date of grant of a stock option or
the date of exercise of a stock option or stock appreciation right, or if no
sales of such stock were reported on said Tape on such date, the average of
the high and low prices of such stock on the next preceding day on which
sales were reported on said Tape. Such price shall be subject to adjustment
as provided in Article XII hereof.
VIII. OPTION TERM
The term of each stock option and each stock appreciation right
granted under this Plan shall be for such period as the Compensation and
Benefits Committee shall determine, but not for more than ten years from date
of grant.
IX. EXERCISE OF OPTIONS
1. Subject to the provisions of this Plan, each stock option and
each stock appreciation right granted hereunder shall be
exercisable on such date or dates and during such period and
for such number of shares or stock appreciation rights as the
Compensation and Benefits Committee may determine. However, in
no event shall a stock option or stock appreciation right be
exercisable prior to six months from date of grant. The
Compensation and Benefits Committee may fix from time to time a
minimum number of shares which must be purchased at the time a
stock option is exercised.
24
<PAGE>
Form 10-Q
2. A grantee electing to exercise a stock option shall at the time
of exercise pay the Company the full purchase price of the
shares he or she has elected to purchase. Payment of the
purchase price shall be made in cash, the Company's common
stock (valued at fair market value on the date of exercise), or
a combination thereof, as the Compensation and Benefits
Committee may determine from time to time. A grantee electing
to exercise a stock appreciation right granted under this Plan
shall so notify the Company at the same time he or she elects
to exercise an accompanying stock option. Payment by the
Company for such stock appreciation right may be in cash,
common stock (valued at fair market value on date of exercise),
or a combination thereof, as the Compensation and Benefits
Committee may determine from time to time, but no fractional
share of common stock shall be delivered. With respect to
shares of the Company's common stock to be delivered upon
exercise of a stock option or a stock appreciation right, the
Compensation and Benefits Committee shall periodically
determine whether, and to what extent, such stock shall be in
the form of new common stock issued for such purposes, or
common stock acquired by the Company.
3. Notwithstanding any other provision of this Plan, when the fair
market value of a share of the Company's common stock on the
date a grantee elects to exercise a stock option is less than
such amount per share as may be determined by the Compensation
and Benefits Committee from time to time, the Company may at
its election pay the grantee in cash for each share he or she
elected to purchase an amount equal to the excess of such fair
market value over the option price provided for in the stock
option. The Compensation and Benefits Committee shall
periodically determine whether the Company shall make such cash
payment upon exercise of a stock option. When the Company
makes a payment to the grantee under this paragraph 3 of
Article IX, it shall not require the grantee to tender the full
purchase price of the shares he or she has elected to purchase,
the Company's obligation to issue or deliver such shares shall
be null and void, and the right to purchase such number of
shares subject to option shall be terminated. Such payment by
the Company shall be deemed to be an exercise of a stock option
and the purchase of shares thereunder for purposes of paragraph
3 of Article II and Article III.
X. NONTRANSFERABILITY OF GRANTS
During a grantee's lifetime no stock option or stock appreciation
right granted under this Plan shall be transferable, and stock options and
stock appreciation rights may be exercised only by the grantee, except as may
25
<PAGE>
Form 10-Q
otherwise be provided in rules established by the Compensation
and Benefits Committee to permit transfers or to authorize a
third party to act on behalf of the grantee with respect to any
stock options or stock appreciation rights.
XI. TERMINATION OF EMPLOYMENT
1. The Compensation and Benefits Committee shall, subject to the
provisions of the Plan, determine the rules relating to rights
under stock options, stock appreciation rights and restricted
stock grants upon a grantee's termination of employment.
2. A grantee shall forfeit all rights under stock options, stock
appreciation rights and restricted stock grants -
(a) if the grantee is dismissed or leaves the service of the
plan companies for any reason other than his or her death,
or retirement pursuant to the provisions of the pension or
retirement plan or policy of a plan company, or
(b) if the grantee retires pursuant to the provisions of the
pension or retirement plan or policy of a plan company,
and if thereafter the Compensation and Benefits Committee,
after a hearing at which the grantee shall be entitled to
be present, shall find that he or she has willfully
engaged in any activity which is harmful to the interest
of any of such companies;
provided, however, that such stock options, stock appreciation
rights and restricted stock grants may continue in effect to
such extent and under such conditions as the Compensation and
Benefits Committee may determine; and provided, further, that
the Compensation and Benefits Committee may accelerate or waive
any restrictions or conditions applicable to restricted stock
grants, in whole or in part, based on such factors and criteria
as the Compensation and Benefits Committee may determine.
3. Upon the death of the grantee or his or her retirement pursuant
to the provisions of the pension or retirement plan or policy
of a plan company, whichever shall first occur, the number of
shares subject to option and the number of stock appreciation
rights shall be limited to that number of shares and rights
which the grantee could have acquired or exercised under the
terms of his or her grant or grants on the date of such death
or retirement, and the options or rights representing the
remainder of the grant or grants shall terminate.
26
<PAGE>
Form 10-Q
XII. ADJUSTMENTS
1. In the event of any stock dividend, split-up, reclassification
or other analogous change in capitalization, the Compensation
and Benefits Committee shall make such adjustments, in the
light of the change, as it deems to be equitable, both to the
grantees and to the Company, in -
(a) the number of shares and prices per share applicable to
outstanding stock options,
(b) the number of outstanding stock appreciation rights and
their price,
(c) the number of shares applicable to outstanding restricted
stock grants,
(d) the aggregate limitation set forth in Article III with
respect to the number of shares which may be made subject
to options and restricted stock grants.
Furthermore, in the event of a distribution to common
stockholders other than interim or year-end dividends declared
as such by the Board of Directors, the Compensation and
Benefits Committee shall make such adjustments, in the light of
the distribution, as it deems to be equitable, both to the
grantees and to the Company, in respect of the items described
in (a), (b) and (c) above.
2. Any fractional shares or fractional stock appreciation rights
resulting from adjustments made pursuant to this Article shall
be eliminated.
XIII. AMENDMENTS
The Board of Directors reserves the right to modify this Plan from
time to time or to repeal the Plan entirely, or to direct the discontinuance
of grants either temporarily or permanently; provided, however, that no
modification of this Plan shall operate to annul, without the consent of the
grantee, a grant already made hereunder; provided, also, that no modification
without approval of the stockholders shall -
(a) increase the number of shares which may be made subject to
stock options or restricted stock grants, or the number of
stock appreciation rights which may be granted under this Plan
in the aggregate, except by way of adjustments as provided in
Article XII,
27
<PAGE>
Form 10-Q
(b) permit grant of stock options and stock appreciation rights at
a price less than fair market value,
(c) extend the maximum term of stock options and stock
appreciation rights, or
(d) permit a grant under this Plan to a member of the Compensation
and Benefits Committee;
except that the Board of Directors may take any action it deems advisable to
ensure that qualified stock options may be granted under this Plan in
accordance with the provisions of the Internal Revenue Code, as it may be
amended.
XIV. MISCELLANEOUS
1. The Compensation and Benefits Committee may adopt such
modifications, procedures, and subplans as may be necessary or
desirable to comply with provisions of the laws of countries
other than the United States in which the Company or a plan
company may operate to assure the viability of the benefits of
grants made to employees in such countries and to meet the
purposes of the Plan.
2. Grantees may use shares of the Company's common stock to
satisfy withholding taxes relating to grants under this Plan to
the extent provided in terms and conditions established by the
Compensation and Benefits Committee.
28
<PAGE>
Form 10-Q
Exhibit 10.9
E. I. DU PONT DE NEMOURS AND COMPANY
SALARY DEFERRAL & SAVINGS RESTORATION PLAN
I. PURPOSE
The purpose of this Plan is to provide an eligible employee with
the opportunity to defer, until termination of employment, receipt of
salary that, because of compensation limits imposed by law, is
ineligible to be considered in calculating benefits within the
Company's tax-qualified defined contribution plan(s) and thereby
recover benefits lost because of that restriction.
II. ADMINISTRATION
The administration of this Plan is vested in the Board of Benefits
and Pensions appointed by Company. The Board may adopt such rules as
it may deem necessary for the proper administration of the Plan, and
may appoint such person(s) or group(s) as may be judged necessary to
assist in the administration of the Plan. The Board's decision in all
matters involving the interpretation and application of this Plan shall
be final. The Board shall have the discretionary right to determine
eligibility for benefits hereunder and to construe the terms and
conditions of this Plan.
III. ELIGIBILITY
An employee of the Company who is participating in the Company's
tax-qualified defined contribution plan(s) and whose annual base
compensation exceeds the amount prescribed in Internal Revenue Code
Section 401(a)(17) shall be eligible to participate in this Plan
(hereinafter "Participant").
For purposes of this Plan, the term "Company" means E. I. du Pont
de Nemours and Company, any wholly owned subsidiary or part thereof and
any joint venture or partnership in which E. I. du Pont de Nemours and
Company has an ownership interest, provided that such entity (1) adopts
this Plan with the approval of the E. I. du Pont de Nemours and Company
and (2) agrees to make the necessary financial commitment in respect of
any of its employees who become Participants in this Plan.
Participation in this Plan is entirely voluntary.
29
<PAGE>
Form 10-Q
IV. PARTICIPANTS' ACCOUNTS
(A) Participant Contributions. A Participant may elect to defer
receipt of a percentage of annual base compensation in excess of
the amount prescribed in Internal Revenue Code Section 401(a)(17),
and have the dollar equivalent of the deferral percentage credited
to a Participant Account under this Plan. The deferral percentage
elected under this Plan shall not exceed that allowed in the tax-
qualified defined contribution plan(s) of the Company in which
(s)he participates. Except as provided below, such deferral
election will be made prior to the beginning of each calendar year
and will be irrevocable for that calendar year.
For purposes of a Participant's first year of participation
in this Plan, the compensation deferral election must be made no
later than 30 days prior to the first day of the month for which
compensation is deferred and will be irrevocable for the remainder
of that calendar year.
(B) Company Contributions. To the extent that a Participant
makes a deferral election under the terms of subparagraph (A)
above, the Company will credit to that Participant's Account in
this Plan an amount equivalent to the Company matching contri-
bution that would be provided to that Participant under the terms
of the Company's tax-qualified defined contribution plan(s) in
which (s)he is participating.
(C) Earnings Equivalents. Credits for Participant Contributions
and Company Contributions shall be treated as having been invested
in one or more of the investment options available in the
Company's tax-qualified defined contribution plan(s) in which
(s)he is participating. Additional credit (or debit) amounts will
be posted to the Participant's Account in this Plan based on the
performance of those investment options.
The Participant shall have the right to:
(1) designate which investment options are to be used in valuing
his/her Account under this Plan, subject to the rules
governing investment direction in the Company's tax-qualified
defined contribution plan in which (s)he is participating;
and/or
(2) change the designated investment options used in valuing
his/her Account under this Plan, subject to the rules
governing investment direction and/or transfers among funds
in the Company's tax-qualified defined contribution plan(s)
in which (s)he is participating.
30
<PAGE>
Form 10-Q
(D) Credits to Accounts. Participant Contributions, Company
Contributions and Earnings Equivalents shall be credited (or
debited) to the Participant's Account under this Plan as unfunded
book entries stated as cash balances, and will not be payable to
Participants until such time as employment with the Company
terminates. The cash balances in Participant Accounts shall be
unfunded general obligations of the Company, and no Participant
shall have any claim to or security interest in any asset of the
Company on account thereof.
V. VESTING
Participant Contributions and Company Contributions and Earnings
Equivalents shall be vested at the time such amounts are credited to
the Participant's Account.
VI. PAYMENT OF BENEFITS
Amounts payable under this Plan shall be delivered in a cash lump
sum as soon as practical after termination of employment unless the
Participant irrevocably elects under rules prescribed by the Board of
Benefits and Pensions to receive payments in a series of annual
installments. All payments under this Plan shall be made by, and all
expenses of administering this Plan shall be borne by, the Company.
VII. RIGHT TO MODIFY
The Company reserves the right to change or discontinue this Plan
in its discretion by action of the Compensation & Benefits Committee.
31
<PAGE>
<TABLE>
Form 10-Q
Exhibit 12
E. I. DU PONT DE NEMOURS AND COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<CAPTION>
Nine Months Ended Years Ended December 31
September 30, 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Net Income .......................................... $2,081 $ 566<Fa> $ 975<Fa> $1,403 $2,310 $2,480
Provision for Income Taxes .......................... 1,352 392 836 1,415 1,844 1,844
Minority Interests in Earnings of Consolidated
Subsidiaries ...................................... 12 5 10 6 3 24
Adjustment for Companies Accounted for
by the Equity Method .............................. 8 41 6 35 29 38
Capitalized Interest ................................ (106) (194) (194) (197) (161) (108)
Amortization of Capitalized Interest ................ 90 144 101 94 84 78
3,437 954 1,734 2,756 4,109 4,356
Fixed Charges:
Interest and Debt Expense - Borrowings ............ 435 594 643 752 773 586
Adjustment for Companies Accounted for by the
Equity Method - Interest and Debt Expense ....... 42 42 62 11 9 23
Capitalized Interest .............................. 106 194 194 197 161 108
Rental Expense Representative of Interest Factor .. 107 143 151 162 163 149
690 973 1,050 1,122 1,106 866
Total Adjusted Earnings Available for Payment of
Fixed Charges ..................................... $4,127 $1,927 $2,784 $3,878 $5,215 $5,222
====== ====== ====== ====== ====== ======
Number of Times Fixed Charges are Earned ............ 6.0 2.0 2.7 3.5 4.7 6.0
====== ====== ====== ====== ====== ======
<FN>
<Fa>Income Before Extraordinary Item and
Transition Effect of Accounting Changes.
</TABLE>
32
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From
Form 10-Q For The Quarterly Period Ended September 30, 1994, And Is
Qualified In Its Entirety By Reference To Such Financial Statements
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 2,402
<SECURITIES> 0
<RECEIVABLES> 5,109<F1>
<ALLOWANCES> 0
<INVENTORY> 3,965
<CURRENT-ASSETS> 12,206
<PP&E> 48,941
<DEPRECIATION> 27,982
<TOTAL-ASSETS> 37,914
<CURRENT-LIABILITIES> 8,836
<BONDS> 6,517
<COMMON> 409
0
237
<OTHER-SE> 11,827
<TOTAL-LIABILITY-AND-EQUITY> 37,914
<SALES> 29,196
<TOTAL-REVENUES> 29,863
<CGS> 21,540<F2>
<TOTAL-COSTS> 25,995<F3>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 435
<INCOME-PRETAX> 3,433
<INCOME-TAX> 1,352
<INCOME-CONTINUING> 2,081
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,081
<EPS-PRIMARY> 3.05
<EPS-DILUTED> 0
<FN>
<F1>Includes Other Accounts In Addition To Notes and Accounts
Receivable-Trade.
<F2>Includes Other Expenses.
<F3>Cost of Goods Sold and Other Expenses; Depreciation, Depletion and
Amortization; Exploration Expenses, Including Dry Hole Costs and
Impairment of Unproved Properties; and Selling, General and
Administrative Expenses.
</FN>
</TABLE>
