SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) December 4, 1998
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-815 51-0014090
(State or Other Jurisdiction (Commission (I.R.S Employer
of Incorporation) File Number) Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 774-1000
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Item 5. Other Events
------------
On September 28, 1998, the company's Board of Directors approved a plan
to divest Conoco. An initial public offering of Conoco common stock was made
on October 21, 1998. The company now indirectly owns approximately 70 percent
of Conoco common stock, which represents approximately 92 percent of the
combined voting rights of all classes of common stock. The company intends to
follow this with a tax-free split off of its remaining Conoco shares to DuPont
shareholders no later than third quarter 1999. Accordingly, beginning in the
third quarter of 1998, the company's consolidated financial statements and
notes report its petroleum business as discontinued operations.
Attachment I - Consolidated Industry Segment Information - Continuing
Operations
- Consolidated Industry Segment Information Excluding Impact of
Nonrecurring items - Continuing Operations
Attachment II - Five-Year Financial Review
Restated presentation reflects the petroleum business as discontinued
operations.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
E. I. DU PONT DE NEMOURS AND COMPANY
(Registrant)
/s/ D. B. Smith
------------------------------------
D. B. Smith
Assistant Controller
December 4, 1998
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<TABLE>
ATTACHMENT I
PAGE 1 OF 3
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION - CONTINUING OPERATIONS (unaudited)
(Dollars in millions)
<CAPTION>
1998
----------------------------------------------
Sept.
1st Qtr. 2nd Qtr. 3rd Qtr. YTD
-------- -------- -------- -------
<S> <C> <C> <C> <C>
AFTER-TAX OPERATING INCOME (LOSS)<Fa>
- ------------------------------------
Chemicals<Fb> .......................... $174 $155 $ 146 $ 475
Fibers ................................. 138 175 125 438
Polymers ............................... 226 235 181 642
Life Sciences<Fc> ...................... 89 249 (813) (475)
Diversified Businesses<Fd> ............. 80 61 (126) 15
---- ---- ----- ------
ATOI from Continuing Operations ........ 707 875 (487) 1,095
Interest and Other Corporate Expenses,
Net of Tax ........................... (70) (81) (77) (228)
---- ---- ----- ------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE EXTRAORDINARY
ITEM ................................. $637 $794 $(564) $ 867
==== ==== ===== ======
1997
-----------------------------------------------------------
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total
-------- -------- -------- -------- -------
AFTER-TAX OPERATING INCOME (LOSS)
- ---------------------------------
Chemicals ........................ $140 $135 $ 152 $ 163 $ 590
Fibers ........................... 229 239 234 260 962
Polymers ......................... 205 255 224 227 911
Life Sciences<Fe> ................ 140 243 (657) (516) (790)
Diversified Businesses<Ff> ....... 54 83 (170) 18 (15)
---- ---- ----- ----- ------
ATOI from Continuing Operations .. 768 955 (217) 152 1,658
Interest and Other Corporate
Expenses, Net of Tax ........... (58) (31) (56) (81) (226)
---- ---- ----- ----- ------
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEM ............. $710 $924 $(273) $ 71 $1,432
==== ==== ===== ===== ======
- ------------------
See Notes on the following page.
</TABLE>
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ATTACHMENT I
PAGE 2 OF 3
[FN]
1998
- ----
<Fa> First quarter and second quarter include charges of $85 and $45, respec-
tively, within the Fibers segment attributable to employee separation
costs and the shutdown of related manufacturing facilities. Third
quarter includes a charge of $256 resulting from a Company-wide produc-
tivity improvement initiative as follows: Chemicals - $51; Fibers - $82;
Polymers - $27; Life Sciences - $16; and Diversified Businesses - $80.
<Fb> Includes a $36 gain in third quarter on the sale of Hydrogen Peroxide
assets.
<Fc> First quarter includes a $60 charge in Life Sciences for revision, based
on independent appraisals, of the purchase price allocation related to
purchased in-process research and development in conjunction with the
purchase of Protein Technologies International. Third quarter includes a
charge of $845 in Life Sciences related to purchased in-process research
and development in conjunction with the purchase of Merck's interest in
The DuPont Merck Pharmaceutical Company based on preliminary allocations
of purchase price which are subject to revision upon obtaining
independent valuations by an outside appraisal firm and completion of
purchase accounting allocations.
<Fd> Third quarter includes a charge of $109 in Diversified Businesses based
on a revised estimate of the purchased in-process research and develop-
ment associated with the purchase of the polyester businesses of Imperial
Chemical Industries PLC.
1997
- ----
<Fe> Includes charges of $1,403 for acquired in-process research and develop-
ment relating to the Pioneer transaction ($850 in third quarter and $53
in fourth quarter) and the PTI transaction ($500 in fourth quarter). In
addition, Life Sciences includes a $62 charge associated with the
"Benlate" 50 DF fungicide recall taken in the fourth quarter and a
benefit of $72 from the company's equity interest in the gain on the sale
by DuPont Merck of its generic and multisource product lines in the third
quarter.
<Ff> Includes charges in the third quarter of $220 associated with exiting the
company's global graphics arts films and offset printing plates busi-
nesses and a fourth quarter charge of $63 for acquired in-process
research and development relating to the ICI polyester intermediates and
resins transaction.
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<TABLE>
ATTACHMENT I
PAGE 3 OF 3
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
EXCLUDING IMPACT OF NONRECURRING ITEMS - CONTINUING OPERATIONS (unaudited)
(Dollars in millions)
<CAPTION>
1998
----------------------------------------------
Sept.
1st Qtr. 2nd Qtr. 3rd Qtr. YTD
-------- -------- -------- -------
<S> <C> <C> <C> <C>
AFTER-TAX OPERATING INCOME
- --------------------------
Chemicals .............................. $174 $155 $161 $ 490
Fibers ................................. 223 220 207 650
Polymers ............................... 226 235 208 669
Life Sciences .......................... 149 249 48 446
Diversified Businesses ................. 80 61 63 204
---- ---- ---- ------
ATOI from Continuing Operations ........ 852 920 687 2,459
Interest and Other Corporate Expenses,
Net of Tax ........................... (70) (81) (77) (228)
---- ---- ---- ------
INCOME FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM ............ $782 $839 $610 $2,231
==== ==== ==== ======
1997
-----------------------------------------------------------
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total
-------- -------- -------- -------- -------
AFTER-TAX OPERATING INCOME
- --------------------------
Chemicals ........................ $140 $135 $152 $163 $ 590
Fibers ........................... 229 239 234 260 962
Polymers ......................... 205 255 224 227 911
Life Sciences .................... 140 243 121 99 603
Diversified Businesses ........... 54 83 50 81 268
---- ---- ---- ---- ------
ATOI from Continuing Operations .. 768 955 781 830 3,334
Interest and Other Corporate
Expenses, Net of Tax ........... (58) (31) (56) (81) (226)
---- ---- ---- ---- ------
INCOME FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM ...... $710 $924 $725 $749 $3,108
==== ==== ==== ==== ======
</TABLE>
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<TABLE>
ATTACHMENT II
PAGE 1 OF 2
E. I. DU PONT DE NEMOURS AND COMPANY
FIVE-YEAR FINANCIAL REVIEW (unaudited)<F1>
-----------------------------------------
(Dollars in millions, except per share)
<CAPTION>
1997 1996 1995 1994 1993
----------- ---------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Sales ..................................................... $ 24,089 $ 23,644 $ 24,500 $ 22,518 $ 21,327
Earnings (Loss) Before Income Taxes ....................... $ 2,786 $ 4,347 $ 4,290 $ 3,369 $ (83)
Provision for Income Taxes ................................ $ 1,354 $ 1,416 $ 1,432 $ 1,164 $ 1
Income (Loss) from Continuing Operations .................. $ 1,432 $ 2,931 $ 2,858 $ 2,205 $ (84)<F2>
Per Share of Common Stock - Basic<F3> ................... $ 1.26 $ 2.60 $ 2.43 $ 1.61 $ (0.07)<F2>
Per Share of Common Stock - Diluted<F3> ................. $ 1.24 $ 2.56 $ 2.41 $ 1.60 $ (0.07)<F2>
Net Income ................................................ $ 2,405 $ 3,636 $ 3,293 $ 2,727 $ 566 <F2>
Per Share of Common Stock - Basic<F3> ................... $ 2.12 $ 3.23 $ 2.81 $ 2.00 $ 0.41 <F2>
Per Share of Common Stock - Diluted<F3> ................. $ 2.08 $ 3.18 $ 2.77 $ 1.98 $ 0.41 <F2>
FINANCIAL POSITION AT YEAR END
Working Capital ........................................... $ (2,117) $ 15 $ (2,116) $ 3,208 $ 897
Total Assets .............................................. $ 36,842 $ 32,365 $ 32,748 $ 32,577 $ 33,204
Borrowings and Capital Lease Obligations:
Short Term .............................................. $ 6,152 $ 3,907 $ 6,152 $ 1,286 $ 2,790
Long Term ............................................... $ 5,897 $ 5,052 $ 5,646 $ 6,338 $ 6,524
Stockholders' Equity ...................................... $ 11,423 $ 10,616 $ 8,323 $ 12,743 $ 11,135
RATIOS - CONTINUING OPERATIONS BASIS
Dividends as Percent of Cash Provided by Operations ....... 35% 31% 23% 34% 35%
Cash Provided by Operations as Percent of Total Debt<F4> .. 33% 46% 44% 48% 37%
Total Debt as Percent of Total Capitalization<F4> ......... 51% 45% 58% 37% 45%
Return on Average Investors' Capital<F4> .................. 7.5% 15.6% 15.1% 11.5% 0.5%
Income From Continuing Operations as Percent of
Average Stockholders' Equity ............................ 12.5% 30.6% 28.6% 18.4% N/A
GENERAL
For the Year - Continuing Operations Basis:
Capital Expenditures .................................... $ 7,075<F5> $ 1,783 $ 1,810 $ 1,615 $ 1,820
Depreciation and Amortization ........................... $ 1,361 $ 1,525 $ 1,643 $ 1,748 $ 1,656
Research and Development Expense ........................ $ 1,072 $ 991 $ 1,031 $ 1,004 $ 1,086
As percent of Sales ................................... 4.5% 4.2% 4.2% 4.5% 5.1%
Average number of Shares (millions)<F3>
Basic ................................................... 1,131 1,121 1,170 1,360 1,353
Diluted ................................................. 1,150 1,140 1,183 1,371 1,363
Dividends Per Common Share<F3> ............................ $ 1.23 $ 1.115 $ 1.015 $ 0.91 $ 0.88
Common Stock Prices<F3>
High .................................................... $ 69 3/4 $49 11/16 $ 36 1/2 $31 3/16 $26 15/16
Low ..................................................... $ 46 3/8 $34 13/16 $ 26 5/16 $ 24 1/8 $ 22 1/4
Year-End Close .......................................... $60 1/16 $ 47 1/16 $34 15/16 $28 1/16 $ 24 1/8
At Year End:
Employees (thousands)<F6> ............................... 98 97 105 107 114
Common Stockholders of Record (thousands) ............... 154 158 166 172 181
Book Value Per Common Share<F3> ......................... $ 9.90 $ 9.21 $ 7.28 $ 9.18 $ 8.04
- ------------------
See Notes on the following page.
</TABLE>
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ATTACHMENT II
PAGE 2 OF 2
NOTES TO FIVE-YEAR FINANCIAL REVIEW
[FN]
<F1> Restated presentation to reflect petroleum business as discontinued
operations.
<F2> Before effect on income of extraordinary item.
<F3> Restated to reflect two-for-one split of common stock effective May 15,
1997.
<F4> Does not necessarily reflect the company's estimated debt after the
split off of the petroleum business. Restated ratios include 100% of
historical debt and equity, but exclude earnings and cash flow from the
petroleum business. Table below shows 1997 debt-related ratios adjusted
to provide a perspective of the company's financial position after the
split off of the petroleum business. These ratios have been adjusted
only to reflect an assumed $5,000 reduction in debt had the split off
occurred in 1997.
1997 Ratios - reflecting assumed $5,000 debt reduction
------------------------------------------------------
Cash Provided by Operations as Percent of Total Debt ... 57%
Total Debt as percent of Total Capitalization .......... 37%
Return on Average Investors' Capital ................... 9.7%
<F5> Includes strategic acquisitions.
<F6> Includes both continuing and discontinued operations.
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