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 June 30, 1996
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
561,057,690 shares (excludes 17,985,035 shares held by DuPont's
Flexitrust) of common stock, $0.60 par value, were outstanding at
July 30, 1996.
1
<PAGE>
Form 10-Q
E. I. DU PONT DE NEMOURS AND COMPANY
Table of Contents
Page(s)
-------
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 ................................ 7-9
Consolidated Industry Segment Information ................... 10
Financial Condition ......................................... 11
Part II
Item 1. Legal Proceedings .................................... 12-13
Item 6. Exhibits and Reports on Form 8-K ..................... 13-14
Signature ....................................................... 15
Exhibit Index ................................................... 16
Exhibit 10.3 - DuPont Stock Accumulation and Deferred
Compensation Plan for Directors ............................... 17-23
Exhibit 10.12 - Warrant Repurchase Agreement .................... 24-27
Exhibit 11 - Computation of Earnings Per Share .................. 28
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges .. 29
2
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<TABLE>
Form 10-Q
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Six Months Ended
CONSOLIDATED INCOME STATEMENT<Fa><Fb> June 30 June 30
- ------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES ................................................... $11,148 $11,076 $21,917 $21,578
Other Income ............................................ 405 247 775 585
------- ------- ------- -------
Total ............................................... 11,553 11,323 22,692 22,163
------- ------- ------- -------
Cost of Goods Sold and Other Expenses ................... 8,296 8,031 16,289 15,634
Selling, General and Administrative Expenses ............ 718 805 1,458 1,522
Depreciation, Depletion and Amortization ................ 605 642 1,258 1,290
Exploration Expenses, Including Dry Hole Costs
and Impairment of Unproved Properties ................. 68 88 147 142
Interest and Debt Expense ............................... 172 236 376 356
------- ------- ------- -------
Total ............................................... 9,859 9,802 19,528 18,944
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES ............................ 1,694 1,521 3,164 3,219
Provision for Income Taxes .............................. 693 583 1,284 1,322
------- ------- ------- -------
NET INCOME .............................................. $ 1,001 $ 938 $ 1,880 $ 1,897
======= ======= ======= =======
EARNINGS PER SHARE OF COMMON STOCK<Fc>................... $ 1.78 $ 1.70 $ 3.35 $ 3.07
======= ======= ======= =======
DIVIDENDS PER SHARE OF COMMON STOCK ..................... $ .57 $ .52 $ 1.09 $ .99
======= ======= ======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
3
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<TABLE>
Form 10-Q
<CAPTION>
Six Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS<Fa><Fb> June 30
- ---------------------------------------------------------------------------------------------
(Dollars in millions) 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS
Net Income ........................................................ $ 1,880 $ 1,897
Adjustments to Reconcile Net Income to Cash
Provided by Operations:
Depreciation, Depletion and Amortization ...................... 1,258 1,290
Dry Hole Costs and Impairment of Unproved Properties .......... 46 50
Other Noncash Charges and Credits - Net ....................... (436) (47)
Change in Operating Assets and Liabilities - Net .............. (392) (862)
------- -------
Cash Provided by Operations ................................. 2,356 2,328
------- -------
INVESTMENT ACTIVITIES
Purchases of Property, Plant and Equipment ........................ (1,442) (1,482)
Investment in Affiliates .......................................... (159) (87)
Proceeds from Sales of Assets ..................................... 1,224 185
Investments in Short-Term Financial Instruments - Net ............. (191) 249
Miscellaneous - Net ............................................... (32) (26)
------- -------
Cash Used for Investment Activities ......................... (600) (1,161)
------- -------
FINANCING ACTIVITIES
Dividends Paid to Stockholders .................................... (615) (613)
Net Increase (Decrease) in Borrowings ............................. (1,074) 6,022
Purchase of Treasury Stock ........................................ - (8,347)
Proceeds from Issuance of Common Stock Through
Public and Private Offerings .................................... - 1,747
Common Stock Issued in Connection with Compensation Plans ......... 205 35
Additions to Minority Interests ................................... 297 -
------- -------
Cash Used for Financing Activities .......................... (1,187) (1,156)
------- -------
Effect of Exchange Rate Changes on Cash ............................. (50) 70
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS ............................... $ 519 $ 81
======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Form 10-Q
CONSOLIDATED BALANCE SHEET<Fa><Fb> June 30 December 31
- -------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1996 1995
- -------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents .......................................................... $ 1,927 $ 1,408
Marketable Securities .............................................................. 238 47
Accounts and Notes Receivable ...................................................... 5,670 4,912
Inventories<Fd> .................................................................... 3,621 3,737
Prepaid Expenses ................................................................... 338 276
Deferred Income Taxes .............................................................. 538 575
------- -------
Total Current Assets ............................................................. 12,332 10,955
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation, depletion and
amortization (June 30, 1996 - $28,353; December 31, 1995 - $29,044) ................ 20,635 21,341
INVESTMENT IN AFFILIATES ............................................................. 2,356 1,846
OTHER ASSETS ......................................................................... 3,163 3,170
------- -------
TOTAL ............................................................................ $38,486 $37,312
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ................................................................... $ 2,485 $ 2,636
Short-Term Borrowings and Capital Lease Obligations ................................ 5,249 6,157
Income Taxes ....................................................................... 792 470
Other Accrued Liabilities ........................................................... 3,731 3,468
------- -------
Total Current Liabilities ........................................................ 12,257 12,731
LONG-TERM BORROWINGS AND CAPITAL LEASE OBLIGATIONS ................................... 5,515 5,678
OTHER LIABILITIES .................................................................... 8,400 8,454
DEFERRED INCOME TAXES ................................................................ 1,858 1,783
------- -------
Total Liabilities ................................................................ 28,030 28,646
------- -------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES ...................................... 601 230
------- -------
STOCKHOLDERS' EQUITY
Preferred Stock .................................................................... 237 237
Common Stock, $.60 par value; 900,000,000 shares authorized; shares issued
at June 30, 1996 - 735,042,725; December 31, 1995 - 735,042,724 .................. 441 441
Additional Paid-In Capital ......................................................... 8,730 8,689
Reinvested Earnings ................................................................ 10,768 9,503
Cumulative Translation Adjustment<Fe> .............................................. (98) -
Common Stock Held in Trust for Unearned Employee Compensation and Benefits, at
Market (Shares: June 30, 1996 - 18,123,543; December 31, 1995 - 23,546,176) ..... (1,434) (1,645)
Common Stock Held in Treasury, at Cost (Shares: June 30, 1996 and
December 31, 1995 - 156,000,000) ................................................. (8,789) (8,789)
------- -------
Total Stockholders' Equity ....................................................... 9,855 8,436
------- -------
TOTAL ............................................................................ $38,486 $37,312
======= =======
See page 6 for Notes to Financial Statements.
</TABLE>
5
<PAGE>
Form 10-Q
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
[FN]
<Fa>These statements are unaudited, but reflect all adjustments that, in the
opinion of management, are necessary to provide a fair presentation 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 1995 data have been
made to conform to 1996 classifications.
<Fb>Subsequent Event - On July 24, 1996, DuPont repurchased from Seagram
for $500 warrants to purchase 156 million shares of DuPont common stock.
These are all of the warrants that were issued to Seagram in April 1995
in connection with DuPont's redemption of 156 million shares of its
common stock from Seagram. The repurchase was funded with private
placement commercial paper borrowings of the company. Coincident with
the repurchase, the company retired 156 million shares of common stock
held in treasury.
<Fc>Earnings per share are calculated on the basis of the following average
number of common shares outstanding:
Three Months Ended Six Months Ended
June 30 June 30
------------------- ----------------
1996 560,546,407 559,128,795
1995 550,445,989 615,537,673
The 18,123,543 shares held by the Flexitrust at June 30, 1996 are not
considered outstanding in computing the foregoing average shares
outstanding. Earnings per share calculations that reflect the impact of
common stock equivalents in the periods presented do not result in
materially dilutive primary or fully diluted earnings per share.
<Fd>Inventories June 30 December 31
----------- 1996 1995
------- -----------
Chemicals ............................... $ 251 $ 248
Fibers .................................. 583 569
Polymers ................................ 503 573
Petroleum ............................... 1,352 1,293
Diversified Businesses .................. 932 1,054
------ ------
Total ................................. $3,621 $3,737
====== ======
<Fe>Effective January 1, 1996, local currency was designated as functional
currency for the company's integrated European petroleum operations,
while the U.S. dollar continued as the functional currency for the
company's other worldwide operations. The amount of the cumulative
translation adjustment on January 1, 1996, was a reduction in stock-
holders' equity of $68.
6
<PAGE>
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 reported earnings of $1.78 per share for the
second quarter of 1996, exceeding the previous record of $1.70 per
share earned in the second quarter of 1995. Excluding nonrecurring
items from both periods, second quarter results were $1.84 per
share, up 5 percent from 1995. Net income totaled $1 billion
compared to $938 million earned in 1995, and marks the first time
quarterly net income exceeded $1 billion.
Chemicals and Specialties sales volumes from continuing
operations increased 4 percent compared to last year. Lower
selling prices, principally due to the stronger U.S. dollar
largely offset these volume gains, resulting in Chemicals and
Specialties earnings before nonrecurring items equal to last
year. Results from the Petroleum segment continued strong, with
earnings before nonrecurring items up 15 percent, benefiting
from higher oil and gas prices.
Nonrecurring items were recorded in both second quarter
periods -- a net after-tax charge of $34 million, or $.06 per share
in 1996, and a charge of $29 million, or $.05 per share, in 1995.
Current period charges include an additional accrual for crop
damage claims and legal expenses related to the recall of "Benlate"
50 DF fungicide, the writedown of certain petroleum assets and
employee separation costs, partly offset by gains on asset sales
and insurance recoveries.
For the first six months of 1996, earnings per share were
$3.35 compared to $3.07 in 1995 with net income of $1.9 billion,
equal to last year. Sales totaled $21.9 billion, up 2 percent.
Excluding nonrecurring items and adjusting for interest expense
associated with debt incurred to finance the 1995 redemption of
stock from Seagram, earnings were 3 percent higher than last year.
Average shares outstanding in the first half were 9 percent lower
than last year as a result of last year's stock redemption.
(2) Industry Segment Performance:
The following text compares second quarter 1996 results
with the prior year for each industry segment, excluding non-
recurring items and reflecting certain reclassifications as
described in the footnotes to the "Consolidated Industry Segment
Information" table.
7
<PAGE>
Form 10-Q
Sales for the second quarter were $11.1 billion, up
1 percent from last year. Petroleum segment sales were up
9 percent, reflecting higher worldwide oil and natural gas
prices and volumes. Combined sales for Chemicals and
Specialties segments were down 5 percent before adjusting for
changes in business composition. After adjusting to reflect the
absence of elastomers sales, now part of the DuPont Dow
Elastomers joint venture, and the divestiture of medical
products businesses, Chemicals and Specialties sales were up
1 percent, reflecting 4 percent higher volume offset by
3 percent lower selling prices. Volumes were up in all regions,
with the United States up 3 percent, Europe up 2 percent, and
Asia, Latin America and Mexico, on average, up more than
8 percent.
o Chemicals segment earnings were $165 million, down
$5 million, or 3 percent, as better earnings for fluoro-
chemicals and specialty chemicals were offset by lower
results for white pigments. Segment sales decreased
1 percent reflecting 6 percent lower selling prices,
partly offset by 5 percent higher sales volume.
o Fibers segment earnings of $208 million were up $5 million,
or 2 percent. Higher earnings for "Lycra" brand spandex
were partly offset by lower results for nylon in apparel
markets, and for aramids. Segment sales were 1 percent
lower, reflecting flat volumes and 1 percent lower prices.
o Polymers segment earnings were $244 million, up
$17 million, or 7 percent, reflecting improved earnings
from fluoropolymers, automotive products and packaging and
industrial polymers. Partly offsetting these improvements
were lower earnings in elastomers due to DuPont's reduced
ownership interest resulting from the formation of the
DuPont Dow Elastomers venture. Segment sales were up
5 percent, reflecting higher sales in all business units
except automotive products. Segment sales volume was up
6 percent, partly offset by 1 percent lower prices.
o Petroleum segment earnings were $218 million, up
$29 million, or 15 percent. Upstream earnings were
$175 million, up 41 percent, reflecting higher worldwide
crude oil and U.S. natural gas prices as well as increased
volumes outside the United States. Downstream earnings
were $43 million, down 34 percent from $65 million earned
in the prior year, principally attributable to lower
product prices outside the United States, partly offset by
improved U.S. marketing margins.
8
<PAGE>
Form 10-Q
o Diversified Businesses segment earnings totaled
$300 million, down $17 million or 5 percent. Higher
earnings from a more favorable allocation to DuPont of
DuPont Merck Pharmaceutical venture results were offset by
lower earnings from printing and publishing and agri-
cultural products, and the loss of ongoing earnings from
medical products businesses that were divested. Segment
sales increased 1 percent, reflecting 5 percent higher
volume, partly offset by 4 percent lower selling prices.
9
<PAGE>
<TABLE>
Form 10-Q
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Six Months Ended
CONSOLIDATED INDUSTRY SEGMENT INFORMATION June 30 June 30
- ---------------------------------------------------------------------------------------------------------------
(Dollars in millions) 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES
- -----
Chemicals .................................... $ 1,081 $ 1,088 $ 2,075 $ 2,123
Fibers ....................................... 1,822 1,832 3,566 3,686
Polymers ..................................... 1,714 1,844 3,498 3,621
Petroleum .................................... 4,963 4,556 9,620 8,809
Diversified Businesses ....................... 1,568 1,756 3,158 3,339
------- ------- ------- -------
Total .................................... $11,148 $11,076 $21,917 $21,578
======= ======= ======= =======
AFTER-TAX OPERATING INCOME<Fa>
- --------------------------
Chemicals .................................... $ 165 $ 177<Fb> $ 287<Fc> $ 342<Fb>
Fibers ....................................... 208 230<Fb> 355<Fc> 430<Fb>
Polymers ..................................... 299<Fd> 227 497<Fd> 459
Petroleum .................................... 177<Fe> 189 391<Fe> 366
Diversified Businesses ....................... 252<Ff><Fg> 254<Fg> 568<Ff><Fg><Fh> 489<Fg>
------- ------- ------- -------
Total .................................... $ 1,101 $ 1,077 $ 2,098 $ 2,086
Interest and Other Corporate
Expenses Net of Tax ........................ (100) (139) (218) (189)
------- ------- ------- -------
NET INCOME ................................... $ 1,001 $ 938 $ 1,880 $ 1,897
- ---------- ======= ======= ======= =======
<FN>
<Fa>Effective in the first quarter of 1996, the amortization of capitalized
interest associated with property, plant and equipment is included in
After-Tax Operating Income versus the previous practice of including
such amortization in Interest and Other Corporate Expenses Net of Tax.
Prior period data have been reclassified for comparative purposes.
This change has no effect on Net Income.
<Fb>The Chemicals and Fibers segments include a benefit of $7 and $27,
respectively, principally an adjustment of estimates associated with
the third quarter 1993 restructuring charge.
<Fc>The Chemicals and Fibers segments include a charge of $21 and $32,
respectively, principally for employee separation costs in the United
States.
<Fd>Includes a gain of $55 associated with the formation of the DuPont Dow
Elastomers joint venture.
<Fe>Includes charges of $63 for writedown of investment in a European
natural gas marketing joint venture, and $22, principally, for employee
separation costs in the United States, partly offset by a net benefit
of $44 related to environmental insurance recoveries.
<Ff>Includes a gain of $41 from the sale of certain medical products
businesses and a charge of $26, principally employee separation costs
outside the United States, associated with the printing and publishing
business.
<Fg>Includes a charge of $63 in quarters ended June 30, 1996 and 1995,
associated with "Benlate" 50 DF fungicide recall.
<Fh>Includes a gain of $33 related to sale of stock received in connection
with the previously sold connector systems business.
</TABLE>
10
<PAGE>
Form 10-Q
(b) Financial Condition at June 30, 1996
DuPont recorded a net cash inflow from operations of $2.4 billion
for the first half of 1996, as compared with $2.3 billion for the same
period in 1995. Cash from operations for the first half includes a larger
decrease for Other Noncash Charges and Credits - Net versus 1995, as is
shown on the Consolidated Statement of Cash Flows. This change is princi-
pally due to higher undistributed earnings from affiliates, primarily the
DuPont Merck Pharmaceutical Company, and higher gains on sales of assets.
The statement of cash flows also shows that net operating assets and
liabilities increased by a smaller amount than during the same period last
year, notably smaller increases in inventory for ongoing businesses.
Year-to-date capital expenditures for plant, property and equipment
and investments in equity affiliates were $1.6 billion, up 2 percent from
the same period last year. The company currently expects capital expendi-
tures for the year of about $3.8 billion. Proceeds from sales of assets
during the first half were $1.2 billion and included the sales of Medical
Products businesses, sales of assets to DuPont Dow Elastomers (a newly
formed joint venture with the Dow Chemical Company), the sale of a
30 percent interest in the Photomask business, as well as the sale of
various petroleum properties.
Cash flows from financing activities for the first half included
$297 million from outside investors in certain upstream petroleum proper-
ties. This investment is reflected as minority interest on the company's
consolidated balance sheet. Also, $205 million was received through stock
options exercised by employees, principally under the company's corporate
sharing programs.
As indicated in Note (b) to the Consolidated Financial Statements,
on July 24, 1996, DuPont repurchased warrants from Seagram. The cash
required to fund this transaction came from private placement commercial
paper borrowings. Following the repurchase, Standard & Poor's (S&P)
affirmed its ratings of the company's senior debt and preferred stock (AA-)
and commercial paper (A-1+). S&P's ratings outlook remains negative.
Certain ratios are shown below:
At 6/30/96 At 12/31/95
---------- -----------
Debt Ratio (total debt to total
capitalization) 51% 58%
Current Ratio (current assets
to current liabilities) 1.0:1 0.9:1
Earnings to Fixed Charges Ratio 7.1 5.9
Days' sales outstanding averaged 34 days in the second quarter,
down two days from the prior quarter and down four days from second quarter
of 1995.
The company's goal is to reduce the debt ratio to about 45 percent
by year-end 1996 through a combination of internally generated funds and
additional proceeds from asset sales of about $500 million.
11
<PAGE>
Form 10-Q
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
In 1991, DuPont began receiving claims by growers that use of
"Benlate" 50 DF fungicide had caused crop damages. Based on the belief that
"Benlate" 50 DF would be found to be a contributor to the claimed damage,
DuPont began paying crop damage claims. In 1992, however, after 18 months
of extensive research, DuPont concluded that "Benlate" 50 DF was not
responsible for plant damage reports received since March 1991, and
concurrent with those research findings, DuPont stopped paying claims. To
date, DuPont has been served with more than 700 lawsuits by growers who
allege plant damage from using "Benlate" 50 DF fungicide. About 60 of the
lawsuits brought against the company since 1991 remain, the rest having been
disposed of by trial, dismissal or settlement. Two appeals from adverse
jury verdicts in crop damage cases are still pending. The appeal of an
order by a federal district court in Georgia finding that DuPont had engaged
in discovery abuse during the first "Benlate" 50 DF case to go to trial has
been argued before the United States Court of Appeals for the Eleventh
Circuit and remains pending. A shareholder derivative action filed in the
same court alleging that DuPont's Board of Directors breached various duties
in its role in the "Benlate" 50 DF litigation has been stayed pending the
resolution of DuPont's appeal of the Georgia court's order. A putative
class action filed by a shareholder in Federal District Court for the
Southern District of Florida against the company and the Chairman in
September 1995 is also still pending. A June 1996 jury verdict of
$3,980,000 against DuPont in a personal injury action involving "Benlate"
50 DF brought in Florida state court is also on appeal. DuPont continues to
believe that "Benlate" 50 DF fungicide did not cause the alleged damages and
intends to prove this in ongoing matters.
Since 1989, DuPont has been named as a defendant in homeowner
lawsuits in numerous state and federal courts alleging damages as a result
of leaks in certain polybutylene plumbing systems. Class actions alleging
the same damages have also been filed in a number of jurisdictions. In most
cases, DuPont is a codefendant with Shell, Hoechst-Celanese, and parts manu-
facturers. The polybutylene plumbing systems consist of flexible pipe
extruded from polybutylene connected by fittings made from acetal. Shell
Chemical is the sole producer of polybutylene; the acetals are provided by
Hoechst-Celanese and DuPont. DuPont, Shell and Hoechst-Celanese continue to
coordinate the terms of several class action settlements. Under those
settlements DuPont will contribute 10 percent of the cost of repairs to
plumbing systems up to a total DuPont contribution of $120 million. Several
dozen cases involving individual or groups of homeowners who have opted out
of the class action litigation remain pending.
The company's balance sheets reflect accruals for estimated costs
associated with both of these matters. Adverse changes in estimates of such
costs could result in additional future charges.
12
<PAGE>
Form 10-Q
On June 28, 1991, DuPont entered into a voluntary agreement with
the Environmental Protection Agency (EPA) to conduct an audit of the U.S.
sites under the Toxic Substances Control Act (TSCA). Agreement participa-
tion is not an admission of TSCA noncompliance. Maximum stipulated
penalties that DuPont could pay under the agreement are capped at
$1 million. The first phase of the audit was completed, but no findings
were issued at that time. A second phase of the audit, set to begin after
EPA's issuance of new reporting criteria (delayed since 1991), was cancelled
in June 1996 by the EPA. The EPA has not issued a consent order/agreement
containing its findings.
On January 19, 1995, EPA Region IV issued a "Notice of Violation
and Opportunity to Show Cause" against the Wurtland, Kentucky, sulphuric
acid plant for 192 alleged violations of release reporting obligations under
the Emergency Planning and Community Right to Know Act. The EPA has
proposed to reduce its civil penalty to $550,800, and the parties are
attempting to negotiate certain Supplemental Environmental Projects for
DuPont to undertake in order to resolve the matter.
On July 17, 1996, DuPont's Belle, West Virginia, plant entered
into a Final Order with the West Virginia Department of Environmental
Protection (WVDEP), resolving certain alleged violations at the Belle Plant
noted by the WVDEP during a series of audits. The violations cited centered
on certain training and recordkeeping practices as well as the handling of a
solvent characterized by the WVDEP as a hazardous waste. Under the terms of
the Order, DuPont will pay a fine of $274,075 and undertake several Supple-
mental Environmental Projects with an expected cost of $174,500.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibit index filed with this Form 10-Q is on page 16.
(b) Reports on Form 8-K
1. On April 24, 1996, a Current Report on Form 8-K was filed
in connection with Debt and/or Equity Securities that may
be offered on a delayed or continuous basis under
Registration Statements on Form S-3 (No. 33-48128,
No. 33-53327 and No. 33-61339). Under Item 7. "Financial
Statements and Exhibits," the Registrant's Earnings Press
Release, dated April 24, 1996, was filed.
2. On July 24, 1996, a Current Report on Form 8-K was filed
in connection with Debt and/or Equity Securities that may
be offered on a delayed or continuous basis under
Registration Statements on Form S-3 (No. 33-48128,
No. 33-53327, No. 33-61339 and No. 33-60069). Under
Item 7. "Financial Statements and Exhibits," the
Registrant's Earnings Press Release, dated July 24, 1996,
was filed.
13
<PAGE>
Form 10-Q
3. On July 24, 1996, the company filed a Current Report on
Form 8-K in connection with Debt and/or Equity Securities
that may be offered on a delayed or continuous basis
under Registration Statements on Form S-3 (No. 33-53327,
No. 33-61339 and No. 33-60069). Under Item 5. "Other
Events," the Registrant announced the repurchase of
warrants from Seagram.
14
<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: August 2, 1996
-----------------------------------------
By /s/ C. L. Henry
-----------------------------------------
C. L. Henry
Executive Vice President - DuPont Finance
(As Duly Authorized Officer
and Principal Financial
and Accounting Officer)
15
<PAGE>
Form 10-Q
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
10.3* The DuPont Stock Accumulation and Deferred Compensation Plan
for Directors, formerly the Deferred Compensation Plan for
Directors, as last amended effective January 1, 1996, and
approved by shareholders at the company's 1996 Annual Meeting
of Shareholders. (Previously filed as Exhibit 10.12 to the
company's Quarterly Report on Form 10-Q for the Period Ended
March 31, 1996.)
10.12 Warrant Repurchase Agreement dated as of July 24, 1996, among
the company, The Seagram Company Ltd. and JES Developments,
Inc.
11 Computation of Earnings Per Share.
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-K.
16
<PAGE>
Form 10-Q
EXHIBIT 10.3
The DuPont Stock Accumulation and Deferred Compensation Plan for
Directors, formerly the Deferred Compensation Plan for Directors, as last
amended, effective January 1, 1996, and approved by the shareholders of
E. I. du Pont de Nemours and Company on April 24, 1996.
E. I. DU PONT DE NEMOURS AND COMPANY
STOCK ACCUMULATION AND DEFERRED
COMPENSATION PLAN FOR DIRECTORS
1. PURPOSE OF THE PLAN
The purpose of the DuPont Stock Accumulation and Deferred
Compensation Plan for Directors (the "Plan") is (1) to further the identity
of interests of members of the Board of Directors of E. I. du Pont de Nemours
and Company (the "Company") with those of the Company's stockholders
generally through the grant of common stock of the Company (the "Stock");
(2) to permit Directors to defer the payment of all or a specified part of
their compensation, including any grant of Stock by the Company, for services
performed as Directors; and (3) to provide for a grant of stock options to
Edgar S. Woolard, Jr. in connection with his service as Chairman of the Board
of Directors.
2. ELIGIBILITY
Members of the Board of Directors of the Company who are not
employees of the Company or any of its subsidiaries or affiliates and who do
not receive a form of compensation for Board service in lieu of customary
Directors' fees shall be eligible to receive grants of Stock under the Plan.
Members of the Board of Directors of the Company who are not employees of the
Company or any of its subsidiaries or affiliates shall be eligible under this
Plan to defer compensation for services performed as Directors.
3. ADMINISTRATION AND AMENDMENT
The Plan shall be administered by the Compensation and Benefits
Committee of the Board of Directors (the "Committee"). The decision of the
Committee with respect to any questions arising as to the interpretation of
this Plan, including the severability of any and all of the provisions
thereof, shall be final, conclusive and binding. The Board of Directors of
the Company reserves the right to modify the Plan from time to time, or to
repeal the Plan entirely, provided, however, that (1) no modification of the
Plan shall operate to annul an election already in effect for the current
calendar year or any preceding calendar year; and (2) to the extent required
under Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"),
Plan provisions relating to the amount, price and timing of stock grants and
options shall not be amended more than once every six months, except that the
foregoing shall not preclude any amendment necessary to conform to changes in
the Internal Revenue Code or the Employee Retirement Income Security Act.
17
<PAGE>
Form 10-Q
EXHIBIT 10.3
The 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.
4. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT/CHANGE IN LAW
It is the Company's intent that the Plan comply in all respects
with Rule 16b-3 of the Exchange Act, or its successor, and any regulations
promulgated thereunder. If any provision of this Plan is found not to be in
compliance with such rule and regulations, the provision shall be deemed null
and void, and the remaining provisions of the Plan shall continue in full
force and effect. All transactions under this Plan shall be executed in
accordance with the requirements of Section 16 of the Exchange Act and
regulations promulgated thereunder.
The Board of Directors may, in its sole discretion, modify the
terms and conditions of this Plan in response to and consistent with any
changes in applicable law, rule or regulation.
5. ANNUAL STOCK GRANT
Effective with the 1996 Annual Meeting and annually thereafter,
each Director eligible under Article 2 hereof shall be awarded an annual
grant of two hundred (200) shares of Stock following his/her election to the
Board of Directors at the Annual Meeting of Stockholders. A Director elected
to the Board at a time other than at the Annual Meeting shall receive a
grant of two hundred (200) shares of Stock following his/her first attendance
at a Board Meeting, provided, however, that no Director shall receive more
than two hundred (200) shares of Stock in any calendar year. A Director may
use shares of Stock granted hereunder to satisfy withholding taxes related to
grants under this Plan in accordance with terms and conditions established by
the Committee.
6. ELECTION TO DEFER
On or before December 31 of any year, a Director may elect to
defer, until a specified year or retirement as a Director of the Company, the
receipt of the Stock granted under Article 5 or the payment of all or a
specified part of all fees payable to the Director for services as a Director
during the calendar year following the election and succeeding calendar
years in the form of cash or stock units, provided, however, that Stock may
only be deferred as stock units. Any person who shall become a Director
during any calendar year, and who was not a Director of the Company on the
preceding December 31, may elect, within thirty days after election to the
Board, to defer in the same manner the receipt of the Stock granted under
Article 5 or the payment of all or a specified part of fees not yet earned
for the remainder of that calendar year and for succeeding calendar years in
the form of cash or stock units. Elections shall be made by written notice
delivered to the Secretary of the Committee.
18
<PAGE>
Form 10-Q
EXHIBIT 10.3
7. DIRECTORS' ACCOUNTS
Fees deferred in the form of cash shall be held in the general
funds of the Company and shall be credited to an account in the name of the
Director. On the first day of each quarter, interest shall be credited to
each account calculated on the basis of the cash balance in each account on
the first day of each month of the preceding quarter at the Prime Rate of
Morgan Guaranty Trust Company of New York (or at such other rate as may be
specified by the Committee from time to time) in effect on the first day of
each month. Stock granted under Article 5 to be deferred in the form of
stock units, or fees to be deferred in the form of stock units, shall be
allocated to each Director's account based on the closing price of the
Company's common stock as reported on the Composite Tape of the New York
Stock Exchange ("Stock Price") on the effective date of the Stock grant or
the date the fees would otherwise have been paid. The Company shall not be
required to reserve or otherwise set aside shares of common stock for the
payment of its obligations hereunder, but shall make available as and when
required a sufficient number of shares of common stock to meet the needs of
the Plan. An amount equal to any cash dividends (or the fair market value of
dividends paid in property other than dividends payable in common stock of
the Company) payable on the number of shares represented by the number of
stock units in each Director's account will be allocated to each Director's
account in the form of stock units based upon the Stock Price on the dividend
payment date. Any stock dividends payable on such number of shares will be
allocated in the form of stock units. If adjustments are made to outstanding
shares of common stock as a result of split-ups, recapitalizations, mergers,
consolidations and the like, an appropriate adjustment will also be made in
the number of stock units in a Director's account. Stock units shall not
entitle any person to rights of a stockholder unless and until shares of
Company common stock have been issued to that person with respect to stock
units as provided in Article 8.
8. PAYMENT FROM DIRECTORS' ACCOUNTS
The aggregate amount of Stock granted under Article 5 which has
been deferred and deferred fees, together with interest and dividend
equivalents accrued thereon, shall be paid in the year specified or after a
Director ceases to be a Director of the Company. Amounts deferred to a
specified year shall only be paid in a lump sum and shall be paid promptly at
the beginning of that specified year. Amounts deferred to retirement shall
be paid in a lump sum or, if the Director elects, in substantially equal
annual installments over a period of years specified by the Director. The
delivery election must be made by written notice delivered to the Secretary
of the Committee prior to the date of retirement, and the first installment
(or lump sum payment) shall be paid promptly at the beginning of the
following calendar year. Subsequent installments shall be paid promptly at
the beginning of each succeeding calendar year until the entire amount
credited to the Director's account shall have been paid. Amounts credited to
19
<PAGE>
Form 10-Q
EXHIBIT 10.3
a Director's account in cash shall be paid in cash and amounts credited in
stock units shall be paid in one share of common stock of the Company for
each stock unit, except that a cash payment will be made with any final
installment for any fraction of a stock unit remaining in the Director's
account. Such fractional share will be valued at the closing Stock Price on
the date of settlement.
9. PAYMENT IN EVENT OF DEATH
A Director may file with the Secretary of the Committee a written
designation of a beneficiary for his or her account under the Plan on such
form as may be prescribed by the Committee, and may, from time to time, amend
or revoke such designation. If a Director should die before all deferred
amounts credited to the Director's account have been distributed, the balance
of any deferred Stock and fees and interest and dividend equivalents then in
the Director's account shall be paid promptly to the Director's designated
beneficiary. If the Director did not designate a beneficiary, or in the
event that the beneficiary designated by the Director shall have predeceased
the Director, the balance in the Director's account shall be paid promptly to
the Director's estate.
10. TERMINATION OF ELECTION
A Director may terminate his/her election to defer payment of fees
in cash or stock units by written notice delivered to the Secretary of the
Committee. Termination shall become effective as of the end of the calendar
year in which notice of termination is given with respect to fees payable for
services as a Director during subsequent calendar years. Amounts credited to
the account of a Director prior to the effective date of termination shall
not be affected thereby and shall be paid only in accordance with Articles 7
and 8.
11. NONASSIGNABILITY
During the Director's lifetime, the right to any deferred Stock or
fees including interest and dividend equivalents thereon shall not be
transferable or assignable.
12. OPTION GRANT
A. Grant
In recognition of his current and future contributions to the
Company as Chairman of the Board of Directors and subject to approval by the
stockholders at the Company's 1996 Annual Meeting, Edgar S. Woolard, Jr.
(Grantee) is granted one hundred thousand (100,000) nonqualified options to
purchase shares of Stock, effective January 1, 1996. The terms and
conditions of such options shall be determined by the Committee consistent
with the provisions of this Plan.
20
<PAGE>
Form 10-Q
EXHIBIT 10.3
B. Non-Transferability Of Options
During Grantee's lifetime, no stock options granted under this Plan
shall be transferable, and stock options may be exercised only by Grantee,
except as may otherwise be provided in rules established by the Committee to
permit transfers or to authorize a third party to act on behalf of Grantee
with respect to any such stock options.
C. Option Price
The price per share of Stock which may be purchased upon exercise
of a stock option granted hereunder shall be determined by the 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. For purpose of this Plan, fair market value shall be the average of
the high and low prices of the 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 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 paragraph 12(D) hereof.
D. Adjustment
(i) In the event of any stock dividend, split-up, reclassification
or other analogous change in capitalization, the Committee
shall make such adjustments, in the light of the change, as it
deems to be equitable, both to Grantee and to the Company, in
the number of shares and prices per share applicable to out-
standing stock options. 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 Committee shall make such adjustments, in the light of the
distribution, as it deems to be equitable, both to Grantee and
to the Company, in respect to the item described herein.
(ii) Any fractional shares resulting from adjustments made pursuant
to this subparagraph shall be eliminated.
E. Option Term
The term of each stock option granted under this Plan shall be for
such period as the Committee shall determine, but not for more than ten (10)
years from the date of grant.
21
<PAGE>
Form 10-Q
EXHIBIT 10.3
F. Exercise of Options
(i) Subject to the provisions of this Plan, each stock option
granted hereunder shall be exercisable on such date or dates
and during such period and for such number of shares as the
Committee may determine. However, in no event shall a stock
option be exercisable prior to six months from the date of
grant. The Committee may fix from time to time a minimum
number of shares which must be purchased at the time a stock
option is exercised.
(ii) At the time he elects to exercise a stock option, Grantee
shall pay the Company the full purchase price of the shares he
has elected to purchase. Payment of the purchase price shall
be made in cash, Stock (valued at fair market value on the
date of exercise), or a combination thereof, as the Committee
may determine from time to time. With respect to Stock to be
delivered upon exercise of a stock option, the 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.
G. Tax Withholding
Grantee may use shares of Stock to satisfy withholding taxes
relating to the grants under this Plan to the extent provided in terms and
conditions established by the Committee.
H. Termination of Options
(i) The Committee shall, subject to the provisions of the Plan,
determine the rules relating to rights of Grantee in the event
Grantee ceases to be a director of the Company or in the event
of his death.
(ii) In the event the Committee establishes a period of time in
excess of six months from date of grant for the first date of
exercisability of options granted hereunder, the Board of
Directors, in its sole discretion, may waive such longer
period.
(iii) Grantee shall forfeit all rights under stock options granted
hereunder if the Committee, after a hearing at which Grantee
shall be entitled to be present, shall find that Grantee has
willfully engaged in any activity harmful to the interest of
the Company or any of its subsidiaries or affiliates provided,
however, that such stock options may continue in effect to
such extent and under such conditions as the Committee may
determine.
22
<PAGE>
Form 10-Q
EXHIBIT 10.3
13. GOVERNING LAW
The validity and construction of the Plan shall be governed by the
laws of the State of Delaware.
14. EFFECTIVE DATE
This Plan shall become effective as of January 1, 1996, provided it
is approved by stockholders at the Company's 1996 Annual Meeting, and shall
continue in full force and effect until terminated by the Board of Directors.
23
<PAGE>
Form 10-Q
Exhibit 10.12
WARRANT REPURCHASE AGREEMENT
THIS WARRANT REPURCHASE AGREEMENT (this "Agreement") is entered
into this 24th day of July 1996, by and among The Seagram Company Ltd., a
Canadian corporation ("Seagram"), JES Developments, Inc., a Delaware
corporation and a wholly owned subsidiary of Seagram ("Subsidiary") and E. I.
du Pont de Nemours and Company, a Delaware corporation (the "Company").
WHEREAS, in connection with the Warrant Agreement, dated as of
April 6, 1995 (the "Warrant Agreement") and the Redemption Agreement, dated
as of April 6, 1995 (the "Redemption Agreement"), Subsidiary acquired
Warrants expiring October 6, 1997 to acquire 48 million shares of Common
Stock, par value $0.60 per share (the "Common Stock") of the Company at
$89.33 per share, Warrants expiring October 6, 1998 to acquire 54 million
shares of Common Stock at $101.14 per share, and Warrants expiring October 6,
1999 to acquire 54 million shares of Common Stock at $113.63 per share
(collectively, the "Warrants" and each, individually, a "Warrant"); and
WHEREAS, the Company has agreed to purchase and Seagram and
Subsidiary have agreed to sell all of the Warrants (the "Repurchase"), in
each case in accordance with the terms set forth below.
NOW THEREFORE, in consideration of the premises set forth above and
the mutual promises and agreements set forth herein, Seagram, Subsidiary and
the Company agree as follows:
1. Simultaneously with the execution and delivery of this Agreement,
(i) the Company is paying to Subsidiary by wire transfer in immediately
available funds $500 million and (ii) Subsidiary is delivering to the Company
for cancellation all of the Warrants and transfer forms attached thereto,
endorsed in blank or in favor of the Company, duly executed by Subsidiary.
Each of Seagram and Subsidiary acknowledges and agrees that upon consummation
of the Repurchase, it shall have no further rights under any of the Warrants.
The purchase and sale of the Warrants pursuant to this Agreement shall be
effective notwithstanding any provisions of the Redemption Agreement giving
Seagram, Subsidiary or the Company the right or the obligation, under the
circumstances specified therein, to purchase or sell, as the case may be, the
Warrants.
2. Each of Seagram and Subsidiary hereby jointly and severally
represent and warrant to the Company, and agree for the benefit of the
Company, that:
(i) Seagram is a corporation duly organized and validly existing under
the laws of Canada and has been duly qualified for the transaction
of business under the laws of the Province of Quebec;
24
<PAGE>
Form 10-Q
Exhibit 10.12
(ii) Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(iii) each of Seagram and Subsidiary has all necessary corporate power
and authority to execute and deliver this Agreement and perform its
obligations hereunder;
(iv) the execution and delivery by each of Seagram and Subsidiary of
this Agreement and the performance by each of its obligations
hereunder have been duly and validly authorized by the Board of
Directors of each of Seagram and Subsidiary, and by the sole
stockholder of Subsidiary, and no other corporate proceedings on
the part of Seagram or Subsidiary are necessary to authorize the
execution, delivery or performance of this Agreement;
(v) this Agreement has been duly and validly executed and delivered by
each of Seagram and Subsidiary and constitutes a valid and binding
agreement of each of Seagram and Subsidiary, enforceable against
each in accordance with its terms;
(vi) the execution and delivery by Seagram and Subsidiary of this
Agreement do not and the performance by Seagram and Subsidiary of
their obligations hereunder will not (a) contravene or conflict
with the certificate of incorporation, by-laws or similar charter
or other organizational documents of Seagram or Subsidiary or
(b) contravene or conflict with or constitute a violation of or
default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of Seagram or Subsidiary
under any provision of applicable law or regulation of the United
States or Canada or any state or province thereof or of any
agreement, contract, judgment, injunction, order, decree or other
instrument binding upon Seagram or Subsidiary, which contravention,
conflict, violation, default or right of termination, cancellation
or acceleration would result in the case of this clause (b) in a
material adverse effect on the business, assets, results of
operations or financial condition of Seagram and its subsidiaries,
taken as a whole, other than any such material adverse effect which
would have no effect on this Agreement and the performance of the
obligations and transactions contemplated hereby;
(vii) Subsidiary has good and marketable title to all of the Warrants,
free and clear of all liens, claims, options, proxies, voting
agreements, security interests, charges and encumbrances other than
the Redemption Agreement, and has complete and unrestricted power
to transfer, assign and deliver the Warrants to the Company, and
upon the transfer of the Warrants to the Company as provided
herein, the Company will acquire good and marketable title to the
Warrants, free and clear of all liens, claims, options, proxies,
voting agreements, security interest, charges and encumbrances; and
25
<PAGE>
Form 10-Q
Exhibit 10.12
(viii) Seagram, Subsidiary and their representatives have been given the
opportunity to ask questions of, and to receive answers from, the
Company and its representatives concerning the business affairs,
financial condition and other information relating to the Company
and to obtain any additional information which Seagram, Subsidiary,
or their representatives deem necessary.
3. The Company hereby represents and warrants to Seagram and
Subsidiary, and agrees for the benefit of Seagram and Subsidiary, that:
(i) it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware;
(ii) it has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;
(iii) the execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations hereunder have been
duly and validly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of
this Agreement or the performance by the Company of its obligations
hereunder;
(iv) this Agreement has been duly and validly executed and delivered by
the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms; and
(v) the execution and delivery by the Company of this Agreement do not
and the performance by the Company of its obligations hereunder
will not (a) contravene or conflict with the certificate of incor-
poration or by-laws of the Company or (b) contravene or conflict
with or constitute a violation of or default under or give rise to
a right of termination, cancellation or acceleration of any right
or obligation of the Company or any of the Company's subsidiaries
under any provision of applicable law or regulation of the United
States or any state thereof or of any agreement, contract,
judgment, injunction, order, decree or other instrument binding
upon the Company or any of its subsidiaries, which contravention,
conflict, violation, default or right of termination, cancellation
or acceleration would result in the case of this clause (b) in a
material adverse effect on the business, assets, results of
operations or financial condition of the Company and its subsidi-
aries, taken as a whole, other than any such material adverse
effect which would have no effect on this Agreement and the per-
formance of the obligations and transactions contemplated thereby.
26
<PAGE>
Form 10-Q
Exhibit 10.12
4. Upon the execution and delivery of this Agreement by the parties
hereto, the Redemption Agreement and all rights and obligations thereunder
shall terminate.
5. The closing of the Repurchase is taking place at the offices of
Skadden, Arps, Slate, Meagher & Flom, at 919 Third Avenue, New York, New York
10022, simultaneously with the execution and delivery of this Agreement.
6. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
7. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the principles of
conflicts of law thereof.
8. This Agreement may be executed in counterparts, each of which shall
be a valid and binding obligation of the parties thereto, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its representatives thereunto duly
authorized, all as of the day and year first above written.
E. I. DU PONT DE NEMOURS AND COMPANY
By: /s/ C. L. Henry
---------------------------------
Name:
Title:
THE SEAGRAM COMPANY LTD.
By: /s/ Edgar Bronfman, Jr.
---------------------------------
Name:
Title:
JES DEVELOPMENTS, INC.
By: /s/ Daniel R. Paladino
---------------------------------
Name:
Title:
27
<PAGE>
<TABLE>
Form 10-Q
Exhibit 11
E. I. DU PONT DE NEMOURS AND COMPANY
COMPUTATION OF EARNINGS PER SHARE<Fa>
(Dollars in millions, except per share)
<CAPTION>
Primary and Fully Diluted
---------------------------------------
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
------------------ ----------------
<S> <C> <C>
Net income less dividends on preferred
stock .................................. $ 998 $1,875
Adjustment for interest, net of income
tax, determined under "Modified
Treasury Stock Method" ................ 135 281
------ ------
Earnings applicable to common stock ..... $1,133 $2,156
====== ======
Average number of common shares
outstanding (excludes treasury
stock and shares held by DuPont
Flexitrust) ........................... 560,546,407 559,128,795
Adjustments required for common share
equivalents:
(1) shares awarded but undelivered
under the Variable Compensation
Plan, (2) shares held by the
DuPont Flexitrust, and (3) shares
assumed to be issued due to stock
options and warrants, net of
shares acquired, as determined
under "Modified Treasury Stock
Method" ............................. 90,518,010 90,741,012
----------- -----------
Adjusted average number of common
shares ................................ 651,064,417 649,869,807
=========== ===========
Earnings per share ...................... $ 1.74 $ 3.32
====== ======
Earnings per share - as published ....... $ 1.78 $ 3.35
====== ======
<FN>
<Fa>1995 calculations either resulted in dilution of less than 3 percent or
were antidilutive.
</TABLE>
28
<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>
Six Months Ended Years Ended December 31
June 30, 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net Income .......................................... $1,880 $3,293 $2,727 $ 566<Fa> $ 975<Fa> $1,403
Provision for Income Taxes .......................... 1,284 2,097 1,655 392 836 1,415
Minority Interests in Earnings of Consolidated
Subsidiaries ...................................... 28 30 18 5 10 6
Adjustment for Companies Accounted for
by the Equity Method .............................. 32 41 18 41 6 35
Capitalized Interest ................................ (68) (170) (143) (194) (194) (197)
Amortization of Capitalized Interest ................ 116<Fb> 154 154 144 101 94
------ ------ ------ ------ ------ ------
3,272 5,445 4,429 954 1,734 2,756
------ ------ ------ ------ ------ ------
Fixed Charges:
Interest and Debt Expense - Borrowings ............ 376 758 559 594 643 752
Adjustment for Companies Accounted for by the
Equity Method - Interest and Debt Expense ....... 35 71 55 42 62 11
Capitalized Interest .............................. 68 170 143 194 194 197
Rental Expense Representative of Interest Factor .. 56 113 118 143 151 162
------ ------ ------ ------ ------ ------
535 1,112 875 973 1,050 1,122
------ ------ ------ ------ ------ ------
Total Adjusted Earnings Available for Payment of
Fixed Charges ..................................... $3,807 $6,557 $5,304 $1,927 $2,784 $3,878
====== ====== ====== ====== ====== ======
Number of Times Fixed Charges are Earned ............ 7.1 5.9 6.1 2.0 2.7 3.5
====== ====== ====== ====== ====== ======
<FN>
<Fa>Income Before Extraordinary Item and Transition Effect of Accounting
Changes.
<Fb>Includes write-off of capitalized interest associated with divested
businesses.
</TABLE>
29
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From The
Consolidated Balance Sheet and Consolidated Income Statement Filed As A
Part Of Form 10-Q For The Quarterly Period Ended June 30, 1996, And Is
Qualified In Its Entirety By Reference To Such Financial Statements
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,927
<SECURITIES> 238
<RECEIVABLES> 5,670<F1>
<ALLOWANCES> 0
<INVENTORY> 3,621
<CURRENT-ASSETS> 12,332
<PP&E> 48,988
<DEPRECIATION> 28,353
<TOTAL-ASSETS> 38,486
<CURRENT-LIABILITIES> 12,257
<BONDS> 5,515
0
237
<COMMON> 441
<OTHER-SE> 9,177
<TOTAL-LIABILITY-AND-EQUITY> 38,486
<SALES> 21,917
<TOTAL-REVENUES> 22,692
<CGS> 16,289<F2>
<TOTAL-COSTS> 19,152<F3>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 376
<INCOME-PRETAX> 3,164
<INCOME-TAX> 1,284
<INCOME-CONTINUING> 1,880
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,880
<EPS-PRIMARY> 0
<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>
