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) October 21, 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
1
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
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), we hereby file the following
press release.
Exhibit
Number Description of Exhibit
------- -------------------------------------------------
99 Copy of the Registrant's Earnings Press Release,
dated October 21, 1998.
2
<PAGE>
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
October 21, 1998
3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- ------------------------------------------------------------
99 Copy of the Registrant's Earnings Press Release, dated
October 21, 1998.
4
<PAGE>
EXHIBIT 99
Contact: Susan Gaffney
(302) 774-2698
DUPONT REPORTS THIRD QUARTER 1998 EARNINGS
------------------------------------------
Wilmington, Del., Oct., 21 -- DuPont reported $.67 third
quarter diluted earnings per share before nonrecurring items
compared with a third quarter record $.85 earned in 1997.
A reported net loss of $.54 per share occurred for the
quarter including a net charge of $1.21 per share for nonrecur-
ring items. These include an $.18 per share extraordinary
charge for early redemption of debt, $.83 per share for the
write-off of acquired in-process R&D, a $.23 per share charge
related to company-wide productivity improvement initiatives,
partly offset by a $.03 per share gain on sale of assets.
Diluted Earnings Per Share Comparisons
--------------------------------------
3 Mos. 3 Mos. 9 Mos. 9 Mos.
9/30/98 9/30/97 9/30/98 9/30/97
------- ------- ------- -------
Underlying* $ .67 $ .85 $2.46 $2.73
Reported $(.54) $(.02) $1.09 $1.86
- ---------------
*Includes discontinued operations (Conoco).
Third Quarter Highlights:
- ------------------------
During the third quarter, the company took major steps
toward positioning itself for greater competiveness in selected
markets:
o Completed acquisition of Merck & Co.'s interest in The
DuPont Merck Pharmaceutical Company and successfully
launched SustivaTM, a drug for the treatment of HIV and
AIDS.
5
<PAGE>
o Announced the fourth quarter IPO of Conoco followed by
the planned "split off" of remaining shares next year
via an exchange to DuPont shareholders.
o Identified and began implementing productivity improve-
ment initiatives including personnel reductions in the
company's core businesses.
o Announced planned fourth quarter sale of remaining
interest in coal operations.
In view of the planned divestiture of Conoco, beginning
this quarter results for the company's core businesses will be
reported as earnings from continuing operations, and results for
Conoco reported as discontinued operations as reflected in the
table below:
Diluted Earnings ($) Per Share
------------------------------
3 Mos. 3 Mos. 9 Mos. 9 Mos.
9/30/98 9/30/97 9/30/98 9/30/97
------- ------- ------- -------
Continuing Operations
- ---------------------
Underlying .53 .63 1.94 2.05
Reported (.50) (.24) .75 1.18
Discontinued Operations .14 .22 .52 .68
- -----------------------
Extraordinary Item (.18) - (.18) -
- ------------------
Total Company
- -------------
Underlying* .67 .85 2.46 2.73
Reported (.54)** (.02) 1.09** 1.86
- ---------------------
*Includes per share amounts from discontinued operations.
**Includes 3Q98 extraordinary charge of $.18 per share for early
redemption of $1.6 billion of high interest rate long-term
debt, $.83 for write-off of in-process R&D, a $.23 charge
for productivity initiatives, and a $.03 gain from an asset
sale.
6
<PAGE>
"The combination of lower demand from weakening global
economies, lower oil prices and the negative impact of a strong
U.S. dollar on selling prices resulted in a decline from record
third quarter earnings last year," said DuPont President and
Chief Executive Officer Charles O. Holliday, Jr. "We are
responding directly to these difficult business conditions by
intensifying our previously announced productivity actions,
which include reduction of employment costs, rationalization of
assets and our increased emphasis on cost-effective raw material
sourcing."
Holliday added, "With the expectation of a challenging
global economy in 1999, we intend to maintain our emphasis on
productivity while we continue to aggressively focus our
businesses."
Results From Continuing Operations
- ----------------------------------
Income from continuing operations before nonrecurring
items was $610 million or $.53 per share compared with
$725 million or $.63 per share. For the nine months to-date,
income from continuing operations was $2,231 million, or $1.94
per share versus $2,359 million, or $2.05 per share, down
5 percent. Year-to-date sales were $18.7 billion, up 3 percent.
Sales in the third quarter were $6.0 billion, up
7 percent, compared with $5.7 billion in the prior year adjusted
to exclude sales from divested businesses. Sales from acquired
7
<PAGE>
businesses added $695 million or 12 percent. Excluding sales
from acquired businesses, third quarter sales were 5 percent
below last year.
The following compares third quarter 1998 with prior
year for segment results from continuing operations before
nonrecurring items described in the accompanying footnotes.
Chemicals segment earnings were $161 million compared
with $152 million earned last year, up 6 percent, principally
due to higher earnings from white pigments. Segment sales of
$1.0 billion were 4 percent lower, reflecting a 9 percent
decline from lower sales volume and divested hydrogen peroxide
production. Segment selling prices were up 5 percent reflecting
higher white pigment prices.
Fibers segment earnings were $207 million, 12 percent
below the $234 million earned in 1997. Lower earnings from
"Dacron" polyester and aramids were partly offset by better
earnings from nylon and nonwovens. "Dacron" polyester had
significant declines in volume and selling prices, largely due
to competitive pressure from Asian imports. Segment sales of
$1.8 billion were down 4 percent as selling prices averaged
3 percent lower and sales volumes 1 percent lower.
Earnings for the polymers segment were $208 million,
7 percent below $224 million earned in 1997, as improved results
from fluoropolymers were offset by lower earnings in the other
8
<PAGE>
businesses. Segment sales of $1.6 billion were 3 percent lower
than 1997, reflecting 2 percent lower volume and 1 percent lower
selling prices.
Life Sciences segment earnings were $48 million, down
60 percent from $121 million in 1997. Agricultural Products
earnings were substantially lower, as had been predicted, due to
three factors: (1) approximately $100 million lower sales
as a result of last year's change in inventory stocking
previously held on consignment, (2) bad debt expense for Brazil,
Eastern Europe and Russia and (3) the company's share of
Pioneer's seasonal quarterly loss. Pharmaceuticals earnings
were also lower due to R&D and launch costs for SustivaTM and a
less favorable pattern of "Coumadin" warfarin sodium sales in
the third quarter. Segment sales, including $466 million from
acquisitions, were $839 million, down 2 percent compared to 1997
sales adjusted to include pharmaceuticals on a 100 percent
basis. This reflects 5 percent lower prices partly offset by
3 percent higher volume.
Diversified businesses earnings were $63 million, up
26 percent from $50 million in 1997. This reflects the absence
of losses incurred last year from the now divested printing and
publishing business, partly offset by earnings declines in the
polyester businesses. Segment sales were $736 million, up
33 percent after adjusting third quarter 1997 to exclude sales
from divested businesses. This reflects a 41 percent increase
from the additional sales from acquired businesses, partly
offset by 8 percent lower prices.
9
<PAGE>
Results From Discontinued Operations
- ------------------------------------
After reflecting adjustments for discontinued operations
reporting, Conoco's third quarter 1998 after-tax operating
income was $220 million compared to a third quarter record of
$295 million in 1997. Income from discontinued operations for
the quarter was $160 million or $.14 per share compared to
$256 million or $.22 per share in 1997, with the primary differ-
ence versus after-tax operating income being the allocation of
interest expense based on net assets.
Results for the quarter were adversely affected by
market conditions that have affected the petroleum industry in
general. Conoco's worldwide net realized oil price was $12.29
per barrel, down $5.67 or 32 percent from last year's $17.96.
Worldwide natural gas prices averaged $2.08 per thousand cubic
feet for the quarter compared with $2.17 last year, down
4 percent. Worldwide crude oil production was down 10 percent
to 292,000 barrels per day (bpd) primarily due to the absence of
properties sold in late 1997. Worldwide natural gas production
was up 14 percent to 1,374 million cubic feet per day, with U.S.
production rising some 32 percent. Worldwide-refined product
sales were 1,081,000 bpd, down 1 percent versus 1997.
Last week Conoco Inc. reported its third quarter results
in an amendment to the registration statement covering the
planned initial public offering of Conoco stock. Those results
10
<PAGE>
were on a different reporting basis than the discontinued opera-
tions reporting discussed above. Because of the status of the
registration statement, the company is unable to make any other
comments regarding Conoco's third quarter performance.
10/21/98
11
<PAGE>
<TABLE>
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) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES .............................................................. $ 6,042 $ 5,794 $18,668 $18,186
Other Income<Fb> ................................................... 136 348 625 836
------- ------- ------- -------
Total .......................................................... 6,178 6,142 19,293 19,022
------- ------- ------- -------
Cost of Goods Sold and Other Expenses .............................. 4,155 4,039 12,844 12,495
Selling, General and Administrative Expenses ....................... 519 460 1,459 1,452
Depreciation and Amortization ...................................... 368 349 1,067 1,015
Interest and Debt Expense .......................................... 160 92 416 268
Purchased In-Process Research and Development<Fc> .................. 1,441 850 1,501 850
Employee Separation Costs and Write-Down of Assets<Fd> ............. 391 340 577 340
------- ------- ------- -------
Total .......................................................... 7,034 6,130 17,864 16,420
------- ------- ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES,
MINORITY INTERESTS AND EXTRAORDINARY ITEM ........................ (856) 12 1,429 2,602
Provision for Income Tax Expenses (Credits)<Fc> .................... (290) 277 543 1,207
Minority Interests in Earnings (Loss) of Consolidated Subsidiaries . (2) 8 19 34
------- ------- ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EXTRAORDINARY ITEM . (564) (273) 867 1,361
Income from Discontinued Operations, Net of Income Tax Provisions of:
$109, $117, $311 and $654, respectively ............................ 160 256 594 782
------- ------- ------- -------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (404) (17) 1,461 2,143
Extraordinary Charge From Early Extinguishment of Debt, Net of
Income Taxes<Fe> ................................................. (201) - (201) -
------- ------- ------- -------
NET INCOME (LOSS) .................................................. $ (605) $ (17) $ 1,260 $ 2,143
======= ======= ======= =======
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK<Ff>
Continuing Operations Before Extraordinary Item ................. $ (.50) $ (.24) $ .76 $ 1.20
Discontinued Operations ......................................... .14 .22 .53 .69
Extraordinary Charge ............................................ (.18) - (.18) -
------- ------- ------- -------
Net Income (Loss) ............................................... $ (.54) $ (.02) $ 1.11 $ 1.89
======= ======= ======= =======
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK<Ff>
Continuing Operations Before Extraordinary Item ................. $ (.50) $ (.24) $ .75 $ 1.18
Discontinued Operations ......................................... .14 .22 .52 .68
Extraordinary Charge ............................................ (.18) - (.18) -
------- ------- ------- -------
Net Income (Loss) ............................................... $ (.54) $ (.02) $ 1.09<Fg> $ 1.86
======= ======= ======= =======
DIVIDENDS PER SHARE OF COMMON STOCK $ .35 $ .315 $ 1.015 $ .915
======= ======= ======= =======
</TABLE>
12
<PAGE>
[FN]
NOTES TO CONSOLIDATED INCOME STATEMENT
<Fa> Discontinued Operations:
On September 28, 1998, the Company's Board of Directors approved a plan to
divest Conoco. The Company plans to make an initial public offering of
Conoco common stock before the end of 1998, followed by a tax-free split
off of its remaining Conoco shares to DuPont shareholders. Accordingly,
the Company's consolidated financial statements and notes report its
petroleum business as discontinued operations. Prior periods have been
restated.
<Fb> Effective July 1, 1998, other income no longer reflects equity affiliate
earnings from the DuPont Merck Pharmaceutical Co. as these results are now
fully consolidated. 1998 includes a $55 gain on the sale of Hydrogen
Peroxide assets.
<Fc> Purchased in-process research and development represents the value
assigned in a purchase business combination to research and development
projects of the acquired business that were commenced but not yet
completed at the date of acquisition and which, if unsuccessful, have no
alternative future use in research and development activities or
otherwise.
In this regard, a charge of $1,300 was recorded in the quarter ending
September 30, 1998 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 completing
independent valuations by an outside appraisal firm and completion of
purchase accounting allocations. In addition, a charge of $141 was
recorded based on a revised estimate of the purchased in-process research
and development associated with the purchase of the polyester businesses
of Imperial Chemical Industries PLC. 1998 year to date also includes a
$60 charge for revision, based on independent appraisals, of the purchase
price allocation in conjunction with the purchase of Protein Technologies
International (PTI).
Third quarter and year to date 1997 includes a charge of $850 taken in
conjunction with the Company's acquisition of a 20% interest in Pioneer
Hi-Bred International, Inc.
The PTI and Pioneer charges were not tax effected because these
transactions were stock purchases rather than asset purchases.
<Fd> Third quarter 1998 charges of $391 result from implementation of
Company-wide productivity improvement initiatives. This includes $202
associated with separation costs for over 2,600 employees, and $189 in
asset write-downs, principally due to shutdown and dismantlement of excess
production capacity. 1998 year to date also includes $108 of employee
separation costs and $78 primarily for the shutdown of related
manufacturing facilities within the Nylon business.
The 1997 write-down represents charges associated with exiting the
Company's global graphic arts films and offset printing plates businesses.
13
<PAGE>
[FN]
<Fe> During the third quarter 1998, the Company recognized an extraordinary
after-tax charge of $201 ($274 pretax, less taxes of $73), as a result of
a debt call and tender offer with an aggregate principal amount of $1,633.
<Ff> Earnings per share are calculated on the basis of the following average
number of common shares outstanding:
Three Months Ended
September 30
--------------------------------
Basic Diluted
------------- -------------
1998 1,130,461,535 1,130,461,535
1997 1,131,012,611 1,131,012,611
Nine Months Ended
September 30
--------------------------------
Basic Diluted
------------- -------------
1998 1,129,608,903 1,147,393,778
1997 1,130,030,845 1,149,075,652
Note: Diluted shares equal basic shares for the purposes of calculating
diluted earnings per share due to the loss from continuing operations for
the three months ended 1997 and 1998.
<Fg> Year to date earnings per share do not equal the sum of quarterly earnings
per share due to changes in average share calculations.
14
<PAGE>
<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
CONSOLIDATED INDUSTRY SEGMENT INFORMATION - Three Months Ended Nine Months Ended
CONTINUING OPERATIONS September 30 September 30
- ------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES
- -----
Chemicals ........................................... $ 1,026 $ 1,064 $ 3,094 $ 3,183
Fibers .............................................. 1,802 1,885 5,565 5,748
Polymers ............................................ 1,639 1,688 5,133 5,106
Life Sciences ....................................... 839 474 2,465 2,057
Diversified Businesses .............................. 736 683 2,411 2,092
------- ------- ------- -------
Total ........................................... $ 6,042 $ 5,794 $18,668 $18,186
======= ======= ======= =======
AFTER-TAX OPERATING INCOME (LOSS)<Fa><Fb>
- ---------------------------------
Chemicals ........................................... $ 146 <Fc> $ 152 $ 475 <Fc> $ 427
Fibers .............................................. 125 234 438 702
Polymers ............................................ 181 224 642 684
Life Sciences ....................................... (813)<Fd> (657)<Fe> (475)<Fd> (274)(e)
Diversified Businesses .............................. (126)<Fd> (170)<Ff> 15 <Fd> (33)(f)
------- ------- ------- -------
ATOI from Continuing Operations ................. (487) (217) 1,095 1,506
Interest and Other Corporate
Expenses, Net of Tax .............................. (77) (56) (228) (145)
------- ------- ------- -------
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM ......................... $ (564) $ (273) $ 867 $ 1,361
======= ======= ======= =======
<FN>
<Fa> Prior periods have been restated to reflect discontinued operations
status of petroleum operations.
<Fb> Third quarter 1998 includes a charge of $256 resulting from a
Company-wide productivity improvement initiative as follows: Chemicals -
$51; Fibers - $82; Polymers - $27; Life Sciences - $16; and Diversified
Businesses - $80. 1998 year to date also includes charges of $130 within
the Fibers segment attributable to employee separation costs and the
shutdown of related manufacturing facilities.
<Fc> Includes a $36 gain on the sale of Hydrogen Peroxide assets.
<Fd> Third quarter 1998 includes a charge of $845 in Life Sciences related to
purchased in-process R&D 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. An additional charge of
$109 was recorded in Diversified Businesses based on a revised estimate
</TABLE>
15
<PAGE>
[FN]
of the purchased in-process research and development associated with the
purchase of the polyester businesses of Imperial Chemical Industries PLC.
1998 year to date also includes a $60 charge in Life Sciences for
revision, based on independent appraisals, of the purchase price
allocation related to purchased in-process R&D in conjunction with the
purchase of Protein Technologies International.
<Fe> Includes a benefit of $72 from the Company's equity interest in the sale
by DuPont Merck of its generic and multisource product lines and an
estimated charge of $850 made in conjunction with the Company's
acquisition of a 20% interest in Pioneer Hi-Bred International, Inc.
<Ff> Includes a charge of $220 associated with exiting the Company's global
graphic arts films and offset printing plates businesses.
16
<PAGE>
<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
EXCLUDING IMPACT OF NONRECURRING ITEMS - Three Months Ended Nine Months Ended
CONTINUING OPERATIONS September 30 September 30
- ------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AFTER-TAX OPERATING INCOME
- --------------------------
Chemicals ........................................... $ 161 $ 152 $ 490 $ 427
Fibers .............................................. 207 234 650 702
Polymers ............................................ 208 224 669 684
Life Sciences ....................................... 48 121 446 504
Diversified Businesses .............................. 63 50 204 187
------ ------ ------ ------
ATOI from Continuing Operations ................. 687 781 2,459 2,504
Interest and Other Corporate
Expenses, Net of Tax .............................. (77) (56) (228) (145)
------ ------ ------ ------
NET INCOME FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM ......................... $ 610 $ 725 $2,231 $2,359
====== ====== ====== ======
</TABLE>
17
