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) July 22, 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 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 July 22, 1998.
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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
July 22, 1998
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EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- ------------------------------------------------------------
99 Copy of the Registrant's Earnings Press Release, dated
July 22, 1998.
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EXHIBIT 99
Contact: Susan Gaffney
(302) 774-2698
DUPONT REPORTS SECOND QUARTER 1998 EARNINGS
Wilmington, Del., July 22 -- DuPont reported second
quarter diluted earnings per share before nonrecurring charges
of $.87, down 12 percent compared to $.99 per share earned in
the second quarter of 1997. Including net nonrecurring charges
of $.04 per share, diluted earnings per share were $.83.
Highlights Include:
o Sales of $11.1 billion were flat with 1997 when adjusted
for divested operations.
o After-tax operating income (ATOI) before nonrecurring
items was $1.1 billion, down 8 percent from last year's
all-time record.
o Chemicals and specialties underlying ATOI was down
4 percent compared to 1997.
o Conoco underlying ATOI was down 27 percent, with
30 percent lower realized average crude oil prices.
Diluted Earnings Per Share Comparisons
3 Mos. Percent 6 Mos. Percent
Ended Change Ended Change
6/30/98 From 1997 6/30/98 From 1997
Underlying $.87 (12) $1.79 (5)
Reported $.83 (16) $1.62 (14)
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"Business conditions in the first half have been some of
the most difficult that we have experienced in recent years,"
said DuPont President and Chief Executive Officer Charles O.
Holliday, Jr. "The effects of lower oil prices on Conoco,
interest expense from acquisitions, and a weaker performance in
our polyester and crop protection businesses were not suffi-
ciently offset by a strong performance in white pigments and
nylon."
"We have greatly intensified our commitment to improved
performance in the second half, focusing on all aspects of total
cost productivity. Results from these actions are expected in
the fourth quarter," Holliday said. "We expect the challenges
we faced in the second quarter to continue, exacerbated by
slowing volumes from the growing effects of the General Motors
strike and the Asian financial crisis. Consequently, we expect
third quarter results to be below last year's third quarter."
"As we look ahead to 1999 and beyond, we remain on track
with our fundamental strategy - transforming DuPont to a higher
growth, more profitable company. With our intensified efforts
we are confident that the competitive strengths of our materials
and life sciences businesses will lead to improved results by
the end of this year, setting a positive trend for 1999, despite
difficult economic conditions," Holliday said.
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Net income for the quarter before nonrecurring items
totaled $1,001 million, down 12 percent from the second quarter
1997 net income of $1,140 million which was an all-time record.
The nonrecurring items include a fibers segment after-tax charge
of $45 million, principally for employee separation costs taken
in connection with the modernization program for global nylon
operations. In the petroleum segment, a $31 million tax benefit
recognized from the sale of a subsidiary outside the United
States was substantially offset by litigation charges in the
United States of $28 million.
Chemicals and Specialties
Chemicals and specialties after-tax income before
nonrecurring charges was $935 million, down 4 percent from
$969 million in 1997.
o Sales for the quarter, including acquisitions, were up
1 percent on a continuing business basis, reflecting
3 percent higher volume, partly offset by 2 percent
lower selling prices.
o Without negative currency effects, average worldwide
selling prices would have been up 1 percent, with prices
outside the United States up 4 percent.
o Regionally, volume was flat in the United States, up
11 percent in Europe and up 2 percent in Asia. The flat
U.S. volume principally reflects additional sales from
acquisitions offset by weakness in "Dacron" polyester,
automotive products, and nylon for textile applications.
o For the first six months of 1998, sales were up
4 percent on a continuing business basis, while
underlying after-tax operating income increased
3 percent.
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Petroleum
Conoco had underlying earnings of $180 million, down
27 percent, reflecting lower upstream earnings due to a
significant decline in crude oil prices, partly offset by
slightly improved downstream results.
o Downstream operations earned $95 million, up 8 percent,
principally due to higher European refinery runs.
o Upstream operations earned $85 million, down 46 percent.
Crude oil prices averaged $12.37 per barrel for the
quarter, $5.41 per barrel or 30 percent less than last
year.
o Worldwide natural gas prices averaged 2 percent higher
than last year with 22 percent higher volume in the
United States.
o Year-to-date underlying earnings were $467 million, down
19 percent from last year.
Segment Results
Chemicals segment earnings were $159 million compared to
$137 million earned last year, up 16 percent, principally due to
higher earnings from white pigments. Segment sales of
$1.0 billion were 6 percent lower, reflecting a 12 percent
decline from lower sales volume and divested operations. Sell-
ing prices were up 6 percent reflecting higher white pigment
prices, particularly outside the United States.
Fibers segment earnings were $179 million. Excluding
nonrecurring charges of $45 million, earnings were $224 million,
9 percent below the $245 million earned in 1997. Better
earnings from nylon, principally in the flooring market, were
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offset by lower earnings from nylon apparel and "Dacron"
polyester, the latter largely a result of competitive pressure
from Asian imports. Sales of $1.9 billion were down 4 percent
as selling prices averaged 3 percent lower and sales volumes
1 percent lower.
Earnings for the polymers segment were $239 million,
8 percent below $259 million earned in 1997, as improved results
from engineering polymers and fluoropolymers were offset by
lower earnings from automotive products and elastomers. Segment
sales of $1.8 billion were 1 percent lower than 1997, reflecting
1 percent lower volume and flat selling prices.
Excluding nonrecurring items, petroleum segment earnings
were $180 million compared to $246 million in the second quarter
1997. U.S. upstream earnings totaled $50 million, down
29 percent principally due to lower crude oil prices. Partly
offsetting were higher natural gas volumes from increasing
production in the south Texas gas fields acquired in 1997, and
slightly higher gas prices. Outside the United States, upstream
earnings were $35 million, down 60 percent due to the effect of
lower crude oil prices and higher dry hole costs. While total
downstream earnings were up 8 percent, U.S. downstream earnings
of $65 million were 24 percent lower, principally due to lower
marketing margins and trading losses. Downstream earnings
outside the United States of $30 million were up $27 million
reflecting higher refinery runs.
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Life Sciences segment earnings were $251 million, up
3 percent from $244 million in 1997. Pharmaceuticals earnings
were slightly below 1997 as improved earnings from DuPont Merck
Pharmaceuticals were offset by somewhat higher "Cozaar"
expenses. Agricultural products earnings were about 4 percent
higher, with additional income from Pioneer and PTI largely
offset by lower crop protection products earnings. Segment
sales including acquisitions were $925 million, down 3 percent,
reflecting 7 percent lower prices partly offset by 4 percent
higher volume.
Diversified businesses earnings were $62 million, down
26 percent from $84 million in 1997. This reflects earnings
declines in the polyester businesses and the absence of earnings
from medical products businesses divested last year. Segment
sales were $830 million, up 46 percent on a continuing business
basis due to increased volumes from acquisitions.
7/22/98
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Six Months Ended
CONSOLIDATED INCOME STATEMENT June 30 June 30
- -------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES ......................................................... $11,140 $11,402 $22,105 $22,613
Other Income .................................................. 248 313 661 652
------- ------- ------- -------
Total ..................................................... 11,388 11,715 22,766 23,265
------- ------- ------- -------
Cost of Goods Sold and Other Expenses ......................... 8,371 8,314 16,622 16,564
Selling, General and Administrative Expenses .................. 677 719 1,327 1,351
Depreciation, Depletion and Amortization ...................... 607 584 1,265<Fa> 1,188
Exploration Expenses, Including Dry Hole Costs
and Impairment of Unproved Properties ....................... 109 101 176 192
Interest and Debt Expense ..................................... 195 155 385 304
Purchased In-Process Research and Development ................. - - 60<Fb> -
------- ------- ------- -------
Total ..................................................... 9,959 9,873 19,835 19,599
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES AND MINORITY INTERESTS ........... 1,429 1,842 2,931 3,666
Provision for Income Taxes .................................... 452<Fc> 688 1,035<Fc> 1,467
------- ------- ------- -------
EARNINGS BEFORE MINORITY INTERESTS ............................ 977 1,154 1,896 2,199
Minority Interests in Earnings of Consolidated Subsidiaries ... 18 14 31 39
------- ------- ------- -------
NET INCOME .................................................... $ 959 $ 1,140 $ 1,865 $ 2,160
======= ======= ======= =======
EARNINGS PER SHARE OF COMMON STOCK<Fd>:
Basic ....................................................... $ 0.85 $ 1.01 $ 1.65 $ 1.91
Diluted ..................................................... $ 0.83 $ 0.99 $ 1.62 $ 1.88
======= ======= ======= =======
DIVIDENDS PER SHARE OF COMMON STOCK ........................... $ .35 $ .315 $ .665 $ .60
======= ======= ======= =======
<FN>
<Fa> Includes a charge of $59 for asset write-downs related to the shutdown of
certain nylon manufacturing facilities.
<Fb> Represents a charge for revision, based on independent appraisals, of the
purchase price allocation in connection with the purchase of Protein
Technologies International, related to the value assigned to research and
development in progress at the time of purchase for which technological
feasibility has not yet been established and no alternative future use is
anticipated. The charge was not tax effected because this transaction
was a stock acquisition rather than an asset purchase.
<Fc> Includes a $31 benefit related to the sale of an international
subsidiary.
<Fd> Earnings per share are calculated on the basis of the following average
number of common shares:
Three Months Ended Six Months Ended
June 30 June 30
------------------------------ ------------------------------
Basic Diluted Basic Diluted
------------- ------------- ------------- -------------
1998 1,129,926,272 1,151,784,525 1,129,175,175 1,148,733,824
1997 1,129,508,955 1,146,593,500 1,129,531,826 1,147,280,959
</TABLE>
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<TABLE>
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, except per share) 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES
- -----
Chemicals ................................................ $ 1,045 $ 1,113 $ 2,068 $ 2,119
Fibers ................................................... 1,867 1,950 3,763 3,863
Polymers ................................................. 1,765 1,788 3,494 3,418
Petroleum ................................................ 4,708 4,861 9,479 10,221
Life Sciences ............................................ 925 958 1,626 1,583
Diversified Businesses ................................... 830 732 1,675 1,409
------- ------- ------- -------
Total ................................................ $11,140 $11,402 $22,105 $22,613
======= ======= ======= =======
AFTER-TAX OPERATING INCOME
- --------------------------
Chemicals ................................................ $ 159 $ 137 $ 336 $ 280
Fibers ................................................... 179<Fa> 245 323<Fa> 478
Polymers ................................................. 239 259 469 467
Petroleum ................................................ 183<Fb> 246 470<Fb> 577
Life Sciences ............................................ 251 244 341<Fc> 385
Diversified Businesses ................................... 62 84 143 140
------- ------- ------- -------
Total ................................................ 1,073 1,215 2,082 2,327
Interest and Other Corporate
Expenses Net of Tax .................................... (114) (75) (217) (167)
------- ------- ------- -------
NET INCOME ............................................... $ 959 $ 1,140 $ 1,865 $ 2,160
- ---------- ======= ======= ======= =======
<FN>
<Fa> Includes charges of $45 for the quarter and $130 for the year to date,
principally related to global Nylon operations, primarily shutdown of
certain manufacturing facilities and employee separation costs.
<Fb> Includes a $31 tax benefit related to the sale of an international
subsidiary partly offset by a $28 litigation accrual in the United
States.
<Fc> Includes a charge of $60 for revision, based on independent appraisals,
of the purchase price allocation in connection with the purchase of
Protein Technologies International, related to the value assigned to
research and development in progress at the time of purchase for which
technological feasibility has not yet been established and no alternative
future use is anticipated.
</TABLE>
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
CONSOLIDATED INDUSTRY SEGMENT INFORMATION Three Months Ended Six Months Ended
EXCLUDING IMPACT OF NONRECURRING ITEMS June 30 June 30
- ---------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AFTER-TAX OPERATING INCOME
- --------------------------
Chemicals ................................................ $ 159 $ 137 $ 336 $ 280
Fibers ................................................... 224 245 453 478
Polymers ................................................. 239 259 469 467
Petroleum ................................................ 180 246 467 577
Life Sciences ............................................ 251 244 401 385
Diversified Businesses ................................... 62 84 143 140
------ ------ ------ ------
Total ................................................ $1,115 $1,215 $2,269 $2,327
Interest and Other Corporate
Expenses Net of Tax .................................... (114) (75) (217) (167)
------ ------ ------ ------
NET INCOME ............................................... $1,001 $1,140 $2,052 $2,160
====== ====== ====== ======
</TABLE>
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