PAGE 1
================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
THRIFT PLAN FOR EMPLOYEES OF
CONOCO INC.
(FULL TITLE OF THE PLAN)
CONOCO INC.
600 NORTH DAIRY ASHFORD ROAD
HOUSTON, TX 77079
(NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER)
================================================================
<PAGE>
PAGE 2
INDEX
-----
Page(s)
-------
Report of Independent Accountants ..................... 4
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, with Fund Information as of
December 31, 1997 and 1996 ....................... 5-12
Statements of Changes in Net Assets Available
for Plan Benefits, with Fund Information for
the Years Ended December 31, 1997 and 1996 ....... 13-20
Notes to Financial Statements ....................... 21-29
Supplemental Schedules*:
Schedule I: Schedule of Assets Held for Investment
Purposes at December 31, 1997 .................... 30-31
Schedule II: Schedule of Reportable Transactions
for the Year Ended December 31, 1997 ............. 32
EXHIBITS
--------
Exhibit
Number Description
------- -----------
24 Consent of Independent Accountants 33
- ----------------
*Other supplemental schedules required by Section 2520.103-10 of
the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not
applicable.
<PAGE>
PAGE 3
Pursuant to the requirements of the Securities and
Exchange Act of 1934, Conoco Inc. has duly caused this Annual
Report to be signed by the undersigned hereunto duly authorized.
Thrift Plan for Employees of
Conoco Inc.
Date: June 18, 1998
By
------------------------------------
Mario Rocconi, Jr.
Vice President of Human Resources
<PAGE>
PAGE 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of the Thrift Plan for Employees of
Conoco Inc. and the Employee Benefit Plans Board of Conoco Inc.
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects, the
net assets available for plan benefits of the Thrift Plan for
Employees of Conoco Inc. (the "Plan") at December 31, 1997 and
1996, and the changes in net assets available for Plan benefits
for the years then ended, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Plan Administrator; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by the Plan Administrator, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
additional information included in Schedules I and II is not a
required part of the basic financial statements but is addi-
tional information required by ERISA. The Fund Information in
the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes
in net assets available for plan benefits of each fund.
Schedules I and II and the Fund Information have been subjected
to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial
statements taken as a whole.
Price Waterhouse LLP
Houston, Texas
June 10, 1998
<PAGE>
<TABLE>
PAGE 5
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
3-Way DuPont
Fixed Fidelity Asset Common
Income Magellan Allocation Stock Loan
Fund Fund Fund Fund Fund
------------- ----------- ---------- ------------- --------
<S> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) ................. $ 750,575<Fa>
Mutual Funds
(Cost $294,603) ................. $148,389
Common/Collective Trusts
(Cost $140,855) ................. $ 63,489
Short-Term Investments and Cash
(Cost $23,722) .................. $ 23,220 59 25 300
Loans to Participants Principal
Balance ......................... $ 36,156
---------- -------- -------- ---------- --------
23,220 148,448 63,514 750,875 36,156
Investments, at Contract Value
Fixed Income Fund ................. 1,772,699<Fa>
---------- -------- -------- ---------- --------
Total Investments ............... 1,795,919 148,448 63,514 750,875 36,156
Receivables
Due from Conoco Inc. .............. 2,461 376 171 2,035
---------- -------- -------- ---------- --------
Net Assets Available for Plan
Benefits .......................... $1,798,380 $148,824 $ 63,685 $ 752,910 $ 36,156
========== ======== ======== ========== ========
Unit or Share Values (Note 2) ....... $ 108.61 $ 95.27 $ 20.14 $ 60.06<Fb>
========== ======== ======== ==========
<FN>
- -------------------------
<Fa> Represents more than 5% of the net assets available for plan benefits.
<Fb> Reflects stock split which occurred on June 12, 1997.
The accompanying notes are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 6
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997 (Continued)
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------
Merrill
Merrill Lynch Merrill Merrill
Merrill Merrill Lynch Small Lynch Lynch
Lynch Lynch Basic Company Int'l Equity
Global Capital Value Stock Stock Index
Holdings Fund Fund Index Index Tier 6
-------- -------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) .................
Mutual Funds
(Cost $294,603) ................. $21,194 $ 31,930 $ 43,690
Common/Collective Trusts
(Cost $140,855) ................. $ 4,988 $ 969 $ 94,160
Short-Term Investments and Cash
(Cost $23,722) .................. 9 13 17 2 38
Loans to Participants Principal
Balance .........................
------- -------- -------- ------- ------ --------
21,203 31,943 43,707 4,990 969 94,198
Investments, at Contract Value
Fixed Income Fund .................
------- -------- -------- ------- ------ --------
Total Investments ............... 21,203 31,943 43,707 4,990 969 94,198
Receivables
Due from Conoco Inc. .............. 77 93 136 22 10 265
------- -------- -------- ------- ------ --------
Net Assets Available for Plan
Benefits .......................... $21,280 $ 32,036 $ 43,843 $ 5,012 $ 979 $ 94,463
======= ======== ======== ======= ====== ========
Unit or Share Values (Note 2) ....... $ 13.19 $ 34.51 $ 37.80 $ 11.91 $ 9.38 $ 65.44
======= ======== ======== ======= ====== ========
- -------------------------
The accompanying notes are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 7
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997 (Continued)
(Dollars In Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
Conservative Moderate Aggressive
Asset Asset Asset
Allocation Allocation Allocation AIM AIM Fidelity
Portfolio Portfolio Portfolio Constellation A Value A Fund
------------ ---------- ---------- --------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) .................
Mutual Funds
(Cost $294,603) ................. $2,265 $2,662 $2,283
Common/Collective Trusts
(Cost $140,855) ................. $3,608 $6,649 $2,213
Short-Term Investments and Cash
(Cost $23,722) .................. 1 3 1 1 1
Loans to Participants Principal
Balance .........................
------ ------ ------ ------ ------ ------
3,609 6,652 2,213 2,266 2,663 2,284
Investments, at Contract Value
Fixed Income Fund .................
------ ------ ------ ------ ------ ------
Total Investments ............... 3,609 6,652 2,213 2,266 2,663 2,284
Receivables
Due from Conoco Inc. .............. 3 8 15 13 15 5
------ ------ ------ ------ ------ ------
Net Assets Available for Plan
Benefits .......................... $3,612 $6,660 $2,228 $2,279 $2,678 $2,289
====== ====== ====== ====== ====== ======
Unit or Share Values (Note 2) ....... $10.57 $10.54 $10.55 $26.38 $32.42 $29.81
====== ====== ====== ====== ====== ======
- --------------------------
The accompanying notes are an integral part of these financial statements.
Continued next page.
</TABLE>
<PAGE>
<TABLE>
PAGE 8
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997 (Continued)
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------
Franklin
Fidelity Fidelity Fidelity Balance Franklin Franklin
Equity Growth & Low-Priced Sheet Custody Small Cap
Income Income Stock Investment Growth I Growth I
-------- -------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) .................
Mutual Funds
(Cost $294,603) ................. $ 7,393 $ 7,581 $10,164 $ 6,916 $1,526 $10,796
Common/Collective Trusts
(Cost $140,855) .................
Short-Term Investments and Cash
(Cost $23,722) .................. 3 3 4 3 1 4
Loans to Participants Principal
Balance .........................
------- ------- ------- ------- ------ -------
7,396 7,584 10,168 6,919 1,527 10,800
Investments, at Contract Value
Fixed Income Fund .................
------- ------- ------- ------- ------ -------
Total Investments ............... 7,396 7,584 10,168 6,919 1,527 10,800
Receivables
Due from Conoco Inc. .............. 22 22 40 26 8 48
------- ------- ------- ------- ------ -------
Net Assets Available for Plan
Benefits .......................... $ 7,418 $ 7,606 $10,208 $ 6,945 $1,535 $10,848
======= ======= ======= ======= ====== =======
Unit or Share Values (Note 2) ....... $ 52.41 $ 38.10 $ 25.13 $ 33.54 $27.09 $ 22.93
======= ======= ======= ======= ====== =======
- --------------------------
The accompanying notes are an integral part of these financial statements.
Continued next page.
</TABLE>
<PAGE>
<TABLE>
PAGE 9
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997 (Continued)
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------
Hotchkis Merrill MFS
& Wiley Janus Janus Lynch MFS Total
Int'l Enterprise Mercury Growth A Research A Return A
-------- -------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) .................
Mutual Funds
(Cost $294,603) ................. $ 7,118 $ 391 $ 1,143 $12,625 $2,411 $ 729
Common/Collective Trusts
(Cost $140,855) .................
Short-Term Investments and Cash
(Cost $23,722) .................. 3 5 1
Loans to Participants Principal
Balance .........................
------- ------- ------- ------- ------ -------
7,121 391 1,143 12,630 2,412 729
Investments, at Contract Value
Fixed Income Fund .................
------- ------- ------- ------- ------ -------
Total Investments ............... 7,121 391 1,143 12,630 2,412 729
Receivables
Due from Conoco Inc. .............. 21 2 8 66 12 1
------- ------- ------- ------- ------ -------
Net Assets Available for Plan
Benefits .......................... $ 7,142 $ 393 $ 1,151 $12,696 $2,424 $ 730
======= ======= ======= ======= ====== =======
Unit or Share Values (Note 2) ....... $ 22.67 $ 30.48 $ 16.50 $ 28.65 $21.29 $ 15.82
======= ======= ======= ======= ====== =======
- --------------------------
The accompanying notes are an integral part of these financial statements.
Continued next page.
</TABLE>
<PAGE>
<TABLE>
PAGE 10
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1997 (Continued)
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
---------------------
Total
Templeton Templeton All
Foreign I Growth I Funds
--------- --------- ----------
<S> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $443,865) ................. $ 750,575
Mutual Funds
(Cost $294,603) ................. $7,569 $4,717 333,492
Common/Collective Trusts
(Cost $140,855) ................. 176,076
Short-Term Investments and Cash
(Cost $23,722) .................. 3 2 23,722
Loans to Participants Principal
Balance ......................... 36,156
------ ------ ----------
7,572 4,719 1,320,021
Investments, at Contract Value
Fixed Income Fund ................. 1,772,699
------ ------ ---------
Total Investments ............... 7,572 4,719 3,092,720
Receivables
Due from Conoco Inc. .............. 29 20 6,030
------ ------ ---------
Net Assets Available for Plan
Benefits .......................... $7,601 $4,739 $3,098,750
====== ====== ==========
Unit or Share Values (Note 2) ....... $ 9.95 $ 19.40
======= =======
- --------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
PAGE 11
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1996
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
3-Way DuPont
Fixed Fidelity Asset Common
Income Magellan Allocation Stock Loan
Fund Fund Fund Fund Fund
------------- ----------- ---------- ------------- --------
<S> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $257,308).................. $ 475,483<Fa>
Mutual Funds
(Cost $213,929).................. $141,847
Common/Collective Trusts
(Cost $86,909)................... $ 62,973
Short-Term Investments and Cash
(Cost $39,562) .................. $ 38,605 163 72 547
Loans to Participants Principal
Balance ......................... $ 36,945
---------- -------- -------- ---------- --------
38,605 142,010 63,045 476,030 36,945
Investments, at Contract Value
Fixed Income Fund ................. 1,952,549<Fa>
---------- -------- -------- ---------- --------
Total Investments ............... 1,991,154 142,010 63,045 476,030 36,945
Receivables
Due from Conoco Inc. .............. 3,079 533 212 1,386
---------- -------- -------- ---------- --------
Net Assets Available for Plan
Benefits .......................... $1,994,233 $142,543 $ 63,257 $ 477,416 $ 36,945
========== ======== ======== ========== ========
Unit or Share Values (Note 2) ....... $ 100.93 $ 80.65 $ 16.37 $ 47.06<Fb>
========== ======== ======== ==========
<FN>
- -------------------------
<Fa> Represents more than 5% of the net assets available for plan benefits.
<Fb> Reflects stock split which occurred on June 12, 1997.
The accompanying notes are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 12
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1996 (Continued)
(Dollars in Thousands, Except Unit or Share Values)
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------
Merrill
Merrill Merrill Lynch Merrill
Lynch Lynch Basic Lynch Total
Global Capital Value Equity All
Holdings Fund Fund Index Funds
-------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at Fair Value
(Notes 1, 2 and 3)
DuPont Company Common Stock
(Cost $257,308) ................. $ 475,483
Mutual Funds
(Cost $213,929) ................. $32,682 $ 31,264 $ 30,303 236,096
Common/Collective Trusts
(Cost $ 86,909) ................. $57,610 120,583
Short-Term Investments and Cash
(Cost $39,562) .................. 38 36 35 66 39,562
Loans to Participants Principal
Balance ......................... 36,945
------- -------- -------- ------- ----------
32,720 31,300 30,338 57,676 908,669
Investments, at Contract Value
Fixed Income Fund ................. 1,952,549
------- -------- -------- ------- ----------
Total Investments ............... 32,720 31,300 30,338 57,676 2,861,218
Receivables
Due from Conoco Inc. .............. 127 116 135 252 5,840
------- -------- -------- ------- ----------
Net Assets Available for Plan
Benefits .......................... $32,847 $ 31,416 $ 30,473 $57,928 $2,867,058
======= ======== ======== ======= ==========
Unit or Share Values (Note 2) ....... $ 14.08 $ 31.05 $ 31.00 $ 49.16
======= ======== ======== =======
- -------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
PAGE 13
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
---------- --------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ........................... $ 141,038 $ 26 $ 12 $ 105 $ 2,997 $ 2
Dividends .......................... 10,053 13,579
Distribution of loan
interest income .................. 1,500 169 84 965 (2,997) 46
Net realized gains (losses) ........ 7,548 6,703 44,852 26,849
Net unrealized appreciation
(depreciation) in fair
value of investments ............. 16,903 6,439 88,535 (13,437)
---------- --------- ---------- ---------- -------- -------
Total investment income .......... 142,538 34,699 13,238 148,036 13,460
Contributions
Conoco Inc. contributions
(net of forfeitures applied
of $10)............................ 11,099 1,824 784 7,021 564
Participants ....................... 16,256 3,129 1,263 10,976 17 1,000
Rollovers .......................... 26,449 692 150 3,994 696
---------- --------- ---------- ---------- -------- -------
196,342 40,344 15,435 170,027 17 15,720
---------- --------- ---------- ---------- -------- -------
Withdrawals .......................... (195,785) (7,325) (3,697) (23,203) (2,610) (1,244)
Net transfers among funds
Loans .............................. (11,221) (1,140) (479) (3,985) 17,829 (190)
Loan principal payments ............ 8,043 853 357 4,725 (15,443) 297
Interfund transfers ................ (190,792) (26,150) (11,100) 128,320 6 (72,464)
Assets transferred in (out), net ..... (2,174) (270) (85) (358) (559) (47)
Affiliated company
transfers in (out), net ............ (266) (31) (3) (32) (29)
---------- --------- ---------- ---------- -------- -------
(392,195) (34,063) (15,007) 105,467 (806) (73,648)
---------- --------- ---------- ---------- -------- -------
Net increase(decrease) ............... (195,853) 6,281 428 275,494 (789) (57,928)
Net assets available
for plan benefits:
Beginning of year .................. 1,994,233 142,543 63,257 477,416 36,945 57,928
---------- --------- ---------- ---------- -------- -------
End of year ........................ $1,798,380 $ 148,824 $ 63,685 $ 752,910 $ 36,156 $
========== ========= ========== ========== ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 14
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
Merrill
Merrill Lynch Merrill Merrill
Merrill Merrill Lynch Small Lynch Lynch
Lynch Lynch Basic Company Int'l Equity
Global Capital Value Stock Stock Index
Holdings Fund Fund Index Index Tier 6
-------- -------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ............................ $ 5 $ 6 $ 7 $ 11
Dividends ........................... 2,493 2,830 3,391
Distribution of loan
interest income ................... 34 34 53 $ 4 $ 2 61
Net realized gains (losses) ......... 2,955 1,346 2,119 71 59 890
Net unrealized appreciation
(depreciation) in fair
value of investments .............. (2,406) 2,106 4,771 93 (45) 8,102
-------- -------- --------- --------- -------- -------
Total investment income ........... 3,081 6,322 10,341 168 16 9,064
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $10)........ 453 427 618 37 20 692
Participants ........................ 801 742 1,071 65 34 1,169
Rollovers ........................... 124 289 603 106 280
-------- -------- --------- --------- -------- -------
4,459 7,780 12,633 376 70 11,205
-------- -------- --------- --------- -------- -------
Withdrawals ........................... (1,586) (2,226) (1,968) (22) (2) (1,470)
Net transfers among funds
Loans ............................... (115) (147) (200) (8) (233)
Loan principal payments ............. 160 144 263 19 8 306
Interfund transfers ................. (14,443) (4,873) 2,655 4,660 903 84,697
Assets transferred in (out), net ...... (26) (49) (13)
Affiliated company
transfers in (out), net ............. (16) (9) (13) (42)
-------- -------- --------- --------- -------- -------
(16,026) (7,160) 737 4,636 909 83,258
-------- -------- --------- --------- -------- -------
Net increase (decrease) ............... (11,567) 620 13,370 5,012 979 94,463
Net assets available for plan benefits:
Beginning of year ................... 32,847 31,416 30,473
-------- -------- --------- --------- -------- -------
End of year ......................... $ 21,280 $ 32,036 $ 43,843 $ 5,012 $ 979 $94,463
======== ======== ========= ========= ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 15
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
Conserva- Moderate Aggressive
tive Asset Asset Asset AIM
Allocation Allocation Allocation Constella- AIM Fidelity
Portfolio Portfolio Portfolio tion A Value A Fund
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ............................
Dividends ........................... $ 148 $ 241 $ 169
Distribution of loan
interest income ................... $ 2 $ 1 1 2 1
Net realized gains (losses) ......... $ 50 4 (3) 7 6 (8)
Net unrealized appreciation
(depreciation) in fair
value of investments .............. 123 203 70 (226) (216) (25)
-------- --------- ---------- ---------- -------- -------
Total investment income ........... 173 209 68 (70) 33 137
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $10)........ 6 15 24 16 21 4
Participants ........................ 10 29 45 33 42 8
Rollovers ........................... 19 19
-------- --------- ---------- ---------- -------- -------
189 253 137 (2) 115 149
-------- --------- ---------- ---------- -------- -------
Withdrawals ........................... (395) (68) (72) (1) (5) (7)
Net transfers among funds
Loans ............................... (2) (5)
Loan principal payments ............. 5 4 5 11 5
Interfund transfers ................. 3,818 6,470 2,159 2,279 2,562 2,142
Assets transferred in (out), net ......
Affiliated company
transfers in (out), net .............
-------- --------- ---------- ---------- -------- -------
3,423 6,407 2,091 2,281 2,563 2,140
-------- --------- ---------- ---------- -------- -------
Net increase(decrease) ................ 3,612 6,660 2,228 2,279 2,678 2,289
Net assets available for plan benefits:
Beginning of year ...................
-------- --------- ---------- ---------- -------- -------
End of year ......................... $ 3,612 $ 6,660 $ 2,228 $ 2,279 $ 2,678 $ 2,289
======== ========= ========== ========== ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 16
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
Franklin Franklin
Fidelity Fidelity Fidelity Balance Franklin Small
Equity Growth & Low-Priced Sheet Custody Cap
Income Income Stock Investment Growth I Growth I
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ............................ $ 1 $ 1
Dividends ........................... $ 234 $ 231 543 $ 384 $ 37 451
Distribution of loan
interest income ................... 3 3 4 2 1 4
Net realized gains (losses) ......... (4) (1) 31 12 (3) 35
Net unrealized appreciation
(depreciation) in fair
value of investments .............. 94 161 4 (116) 16 (639)
-------- --------- ---------- ---------- -------- -------
Total investment income ........... 327 394 583 282 51 (148)
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $10)........ 35 38 63 49 13 68
Participants ........................ 67 72 141 87 22 127
Rollovers ........................... 164 4 152 31 1
-------- --------- ---------- ---------- -------- -------
593 508 939 449 86 48
-------- --------- ---------- ---------- -------- -------
Withdrawals ........................... (42) (18) (49) (17) (28) (63)
Net transfers among funds
Loans ............................... (4) (11) (7) (7) (4) (15)
Loan principal payments ............. 9 12 28 40 9 23
Interfund transfers ................. 6,862 7,115 9,297 6,480 1,472 10,855
Assets transferred in (out), net ......
Affiliated company
transfers in (out), net .............
-------- --------- ---------- ---------- -------- -------
6,825 7,098 9,269 6,496 1,449 10,800
-------- --------- ---------- ---------- -------- -------
Net increase(decrease) ................ 7,418 7,606 10,208 6,945 1,535 10,848
Net assets available for plan benefits:
Beginning of year ...................
-------- --------- ---------- ---------- -------- -------
End of year ......................... $ 7,418 $ 7,606 $ 10,208 $ 6,945 $ 1,535 $10,848
======== ========= ========== ========== ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 17
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
Hotchkis Merrill MFS
& Wiley Janus Janus Lynch MFS Total
Int'l Enterprise Mercury Growth A Research A Return A
---------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ............................ $ 1 $ 1
Dividends ........................... 127 $ 26 $ 120 907 $ 107 $ 56
Distribution of loan
interest income ................... 3 1 9 1
Net realized gains (losses) ......... 10 (1) (21) (56) 3 (24)
Net unrealized appreciation
(depreciation) in fair
value of investments .............. (525) (149) (1,149) (83) (6)
-------- --------- ---------- ---------- -------- -------
Total investment income ........... (384) 25 (49) (288) 28 26
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $10) ....... 42 2 11 100 20 1
Participants ........................ 85 3 24 187 36 2
Rollovers ........................... 117 75
-------- --------- ---------- ---------- -------- -------
(257) 30 (14) 116 159 29
-------- --------- ---------- ---------- -------- -------
Withdrawals ........................... (9) (2) (132) (9) (1)
Net transfers among funds
Loans ............................... (2) (26) (22)
Loan principal payments ............. 14 1 10 35 8 1
Interfund transfers ................. 7,406 388 1,157 12,699 2,266 701
Assets transferred in (out), net ......
Affiliated company
transfers in (out), net ............. (10)
-------- --------- ---------- ---------- -------- -------
7,399 363 1,165 12,580 2,265 701
-------- --------- ---------- ---------- -------- -------
Net increase(decrease) ................ 7,142 393 1,151 12,696 2,424 730
Net assets available for plan benefits:
Beginning of year ...................
-------- --------- ---------- ---------- -------- -------
End of year ......................... $ 7,142 $ 393 $ 1,151 $ 12,696 $ 2,424 $ 730
======== ========= ========== ========== ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 18
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
----------------------- Total
Templeton Templeton All
Foreign I Growth I Funds
--------- --------- -----------
<S> <C> <C> <C>
Investment income
Interest ............................ $ 1 $ 144,214
Dividends ........................... 730 $ 665 37,522
Distribution of loan
interest income ................... 4 3
Net realized gains (losses) ......... (16) (33) 93,380
Net unrealized appreciation
(depreciation) in fair
value of investments .............. (1,115) (677) 106,806
------- ------ ----------
Total investment income ........... (396) (42) 381,922
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $10) ....... 56 31 24,154
Participants ........................ 96 60 37,699
Rollovers ........................... 52 52 34,069
------- ------ ----------
(192) 101 477,844
------- ------ ----------
Withdrawals ........................... (15) (49) (242,120)
Net transfers among funds
Loans ............................... (3) (3)
Loan principal payments ............. 25 23
Interfund transfers ................. 7,786 4,667
Assets transferred in (out), net ...... (3,581)
Affiliated company
transfers in (out), net ............. (451)
------- ------ ----------
7,793 4,638 (246,152)
------- ------ ----------
Net increase (decrease) ............... 7,601 4,739 231,692
Net assets available for plan benefits:
Beginning of year ................... 2,867,058
------- ------ ----------
End of year ......................... $ 7,601 $4,739 $3,098,750
======= ====== ==========
- -------------------------
The accompanying note are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
PAGE 19
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
---------- --------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Interest ............................ $ 148,182 $ 31 $ 13 $ 87 $ 3,111 $ 8
Dividends ........................... 25,201 11,531
Distribution of loan
interest income ................... 1,788 258 99 761 (3,111) 69
Net realized gains (losses) ......... 1,852 2,898 52,664 1,190
Net unrealized appreciation
(depreciation) in fair
value of investments .............. (10,957) 4,197 77,915 6,946
---------- --------- ---------- ---------- -------- -------
Total investment income ........... 149,970 16,385 7,207 142,958 8,213
Contributions
Conoco Inc. contributions (net of
forfeitures applied of $456) ...... 13,396 2,833 983 5,734 827
Participants ........................ 19,136 4,536 1,463 8,218 17 1,342
Rollovers ........................... 42,900 2,135 724 3,039 2,154
---------- --------- ---------- ---------- -------- -------
225,402 25,889 10,377 159,949 17 12,536
---------- --------- ---------- ---------- -------- -------
Withdrawals ........................... (153,038) (9,406) (4,294) (15,148) (3,556) (1,747)
Net transfers among funds
Loans ............................... (12,903) (1,317) (573) (3,306) 18,748 (172)
Loan principal payments ............. 9,025 1,447 524 4,054 (16,291) 406
Interfund transfers ................. 52,265 (29,011) (2,308) (52,560) 20,373
Assets transferred in (out), net ......
Affiliated company
transfers in (out), net ............. (787) (98) 10 (813) (47)
---------- --------- ---------- ---------- -------- -------
(105,438) (38,385) (6,641) (67,773) (1,146) 18,860
---------- --------- ---------- ---------- -------- -------
Net increase(decrease) ................ 119,964 (12,496) 3,736 92,176 (1,129) 31,396
Net assets available for plan benefits:
Beginning of year ................... 1,874,269 155,039 59,521 385,240 38,074 26,532
---------- --------- ---------- ---------- -------- -------
End of year ......................... $1,994,233 $ 142,543 $ 63,257 $ 477,416 $ 36,945 $57,928
========== ========= ========== ========== ======== =======
- -------------------------
The accompanying note are an integral part of these financial statements.
Continued next page
</TABLE>
<PAGE>
<TABLE>
PAGE 20
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
(Dollars in Thousands)
<CAPTION>
FUND INFORMATION
-----------------------------------------------
Merrill
Merrill Merrill Merrill Lynch
Lynch Lynch Lynch Basic Total
Global Balanced Capital Value All
Holdings Fund Fund Fund Funds
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment income
Interest ............................ $ 6 $ 6 $ 5 $ 151,449
Dividends ........................... 2,039 $ 106 3,077 1,954 43,908
Distribution of loan
interest income ................... 47 1 43 45
Net realized gains (losses) ......... 627 23 557 522 60,333
Net unrealized appreciation
(depreciation) in fair
value of investments .............. 1,035 (88) 1,401 80,449
-------- --------- ---------- ---------- ----------
Total investment income ........... 3,754 130 3,595 3,927 336,139
Contributions
Conoco Inc. contributions
(net of forfeitures applied
of $456) .......................... 579 9 540 528 25,429
Participants ........................ 958 13 870 889 37,442
Rollovers ........................... 235 148 888 52,223
-------- --------- ---------- ---------- ----------
5,526 152 5,153 6,232 451,233
-------- --------- ---------- ---------- ----------
Withdrawals ........................... (987) (52) (2,380) (1,215) (191,823)
Net transfers among funds
Loans ............................... (160) (196) (121)
Loan principal payments ............. 322 3 259 251
Interfund transfers ................. 2,781 (4,763) 3,869 9,354
Assets transferred in (out), net ......
Affiliated company
transfers in (out), net ............. 19 28 (88) (1,776)
-------- --------- ---------- ---------- ----------
1,975 (4,812) 1,580 8,181 (193,599)
-------- --------- ---------- ---------- ----------
Net increase (decrease) ............... 7,501 (4,660) 6,733 14,413 257,634
Net assets available for plan benefits:
Beginning of year ................... 25,346 4,660 24,683 16,060 2,609,424
-------- --------- ---------- ---------- ----------
End of year ......................... $ 32,847 $ $ 31,416 $ 30,473 $2,867,058
======== ========= ========== ========== ==========
- -------------------------
The accompanying note are an integral part of these financial statements.
</TABLE>
<PAGE>
PAGE 21
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
NOTE 1 -- DESCRIPTION OF THE THRIFT PLAN:
The following description of the Thrift Plan for Employees of Conoco
Inc. (the "Plan") provides only general information. Members should refer to
the Plan document for the Plan's provisions.
THE PLAN
The Plan is a defined contribution plan which was established in 1952
by Conoco Inc. (the "Company"), which became a wholly-owned subsidiary of
E. I. du Pont de Nemours and Company (DuPont) in 1981. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA)
and the Internal Revenue Code (the "Code").
The purpose of the Plan is to encourage employees to save
systematically a portion of their current compensation and to assist them to
accumulate additional means for the time of their retirement. The Plan is a
tax-qualified, contributory profit sharing plan. Employees of the Company,
including employees of Affiliated Companies that have adopted the Plan, who
have previously met the eligibility requirements of the Plan or who have
completed a designated period of 12 consecutive months during which they
complete 1,000 hours or more of service; who are regular, full time employees
and have completed at least one year of continuous service, who are eligible
to participate in a qualified profit-sharing plan of an Affiliated Company
from which they were transferred, or became, prior to January 1, 1993, and
remained members of the Retirement Plan of Conoco Inc. (now the Pension and
Retirement Plan of E. I. du Pont de Nemours and Company (Title 2)); are
eligible to participate in the Plan.
An eligible Participant may authorize the Company to make a payroll
deduction under the Plan ranging from 1% to 19% of monthly compensation. The
amount deducted can be deposited into a before-tax or after-tax account or
some combination thereof; however, no more than 15% may be deposited into a
before-tax account. Participants' monthly deductions up to 6% are called
Basic Deposits. The Company will contribute an amount equal to 100% of the
Participant's monthly Basic Deposits. Subject to certain limitations, certain
Participants are eligible to make Supplemental Deposits, either as lump sum
deposits or deposits in the form of monthly deductions in excess of 16%. Due
to the discrimination rules of the Internal Revenue Code, only "Non-highly
Compensated" Participants are currently able to make lump sum Supplemental
Deposits.
A Participant with less than five years of participation credit or
service, who withdraws any matched before-tax or after-tax deposits will
forfeit a portion of related Company Contributions in accordance with the
specific Plan provisions. Company Contributions will be suspended for six
months if a Participant makes an in-service withdrawal of any earnings in the
before-tax or after-tax accounts, or Basic Deposits or Company Contributions
contributed during the last 24 months. Employee deposits and matching Company
Contributions will be suspended for up to 12 months if a Participant withdraws
any before-tax contribution prior to age 59-1/2. In certain circumstances
such a withdrawal may also preclude a Participant from making any before-tax
contributions in the year following the withdrawal.
<PAGE>
PAGE 22
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Any vested Participant who separates from service, including one
who retires, may elect to make a full account withdrawal at any time.
Required minimum distributions commence in March following the year in
which a former Participant reaches age 70-1/2. A Participant who is an
active employee may elect to defer minimum distributions until he separates
from service or may elect to commence minimum distribution payments in
March following the year in which he reaches age 70-1/2.
Participants may borrow up to one-half of their nonforfeitable
account balances subject to certain minimum and maximum loan limitations.
The loans are executed by promissory notes and have a minimum term of 12
months and a maximum term of 60 months, except for qualified residential
loans which have a maximum term of 120 months. The loans bear an interest
rate equal to the average rate charged by selected major banks to prime
customers for secured loans. The loans are repaid over the term in monthly
installments of principal and interest by payroll deduction. A Participant
also has the right to repay the loan in full at any time without penalty.
INVESTMENT FUNDS
The following investment funds have been established for the
investment of Employee Deposits and Company Contributions. Effective
July 1, 1997, 22 new investment options were added to the Plan to expand
the investment choices available to Participants. The new options included
two index funds, seventeen mutual funds and three asset allocation
portfolios. The investment options offered are described below:
Fixed Income Fund
- -----------------
Investments under agreement with one or more financial institutions,
including insurance companies, banks and other investment entities which
provide for a predetermined or stable rate of return and are held at
contract value.
DuPont Common Stock Fund
- ------------------------
Common Stock of E. I. du Pont de Nemours and Company, Conoco's ultimate
parent company.
Loan Fund
- ---------
Participant loans--amounts transferred from other funds that are loaned to
participants.
Merrill Lynch Funds
- -------------------
A total of seven Merrill Lynch investment options are offered, each with its
own investment objective:
Mutual Funds:
Merrill Lynch Global Holdings - seeks highest total investment return
consistent with prudent risk through global diversification.
<PAGE>
PAGE 23
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Merrill Lynch Capital Fund - seeks highest total investment return consistent
with prudent risk.
Merrill Lynch Basic Value Fund - seeks capital appreciation and income.
Merrill Lynch Growth A - seeks growth of capital and income.
Index Funds:
Merrill Lynch Small Company Stock Index - seeks to track the holdings and
total return of the Russell 2000 Index.
Merrill Lynch International Stock Index - seeks to track the holdings and
total return of the Morgan Stanley Capital International EAFE (Europe,
Australia, and Far East) Index.
Merrill Lynch Equity Index Tier 6 - seeks to track the holdings and total
return of the Standard & Poor's 500 Composite Stock Price Index (S&P
500 Index).
Effective July 1, 1997, the Merrill Lynch Growth A mutual fund, Merrill Lynch
Small Company Stock Index and Merrill Lynch International Stock Index were
added to the Plan as new investment options.
Also on July 1, 1997, the assets of the Merrill Lynch Equity Index were
transferred into the Merrill Lynch Equity Index Tier 6 Trust, thereby
eliminating the Equity Index from Merrill Lynch's investment portfolio. The
Equity Index Tier 6 Trust is referred to as the Large Company Stock Index in
Participant communications. The underlying investment objective, which is to
track the S&P 500 Index, remains unchanged.
Mutual Funds
- ------------
In addition to the four Merrill Lynch mutual funds listed above, seventeen
other mutual funds are offered as investment options. Each of the mutual
funds has its own investment objective and varying degrees of risk. The list
of mutual funds available is:
AIM Constellation A - seeks aggressive capital growth.
AIM Value A - seeks long-term capital growth.
Fidelity Fund - seeks long-term capital growth.
Fidelity Equity-Income - seeks reasonable income and potential for capital
appreciation.
Fidelity Growth & Income - seeks high total return.
Fidelity Low-Priced Stock - seeks capital appreciation.
Fidelity Magellan Fund - seeks capital appreciation.
Franklin Balance Sheet Investment - seeks high total return.
Franklin Custody Growth I - seeks capital appreciation.
Franklin Small Cap Growth I - seeks long-term capital growth.
Hotchkis & Wiley International - seeks current income, long-term growth of
income and growth of capital.
Janus Enterprise - seeks long-term growth of capital.
Janus Mercury - seeks long-term growth of capital.
MFS Research A - seeks long-term growth of capital and future income.
MFS Total Return A - seeks above-average income consistent with prudent
employment of capital, and growth of capital and income.
Templeton Foreign I - seeks long-term capital growth.
Templeton Growth I - seeks long-term capital growth.
<PAGE>
PAGE 24
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
All of these mutual funds, excluding the Fidelity Magellan Fund, were added as
new investment options effective July 1, 1997.
Asset Allocation Portfolios
- ---------------------------
Four Asset Allocation Portfolios are offered as investment options for
balancing risk and return:
3-Way Asset Allocation Portfolio - seeks long-term return while controlling
risk.
Conservative Asset Allocation Portfolio - seeks lower risk with lower
potential return.
Moderate Asset Allocation Portfolio - seeks moderate risk and return.
Aggressive Asset Allocation Portfolio - seeks higher return with higher
potential risk.
The Conservative, Moderate and Aggressive Asset Allocation Portfolios were
added as new investment options effective July 1, 1997. All three portfolios
are composed of other investment options which are available in the Plan. All
three asset allocation portfolios have as their components the Fixed Income
Fund, Merrill Lynch Small Company Stock Index Trust and the Merrill Lynch
Equity Index Tier 6 Trust. The Moderate and Aggressive portfolios also
include the Merrill Lynch International Stock Index. The percentage of
investment in the Fixed Fund or the other Merrill Lynch options varies
depending on the risk.
Participants may allocate their Employee Deposits and Company
Contributions among all funds at their discretion and may reallocate the
amounts in their accounts among all funds at their discretion. Members may
reallocate the amounts in their accounts among all funds, except the Loan
Fund, at their discretion.
Affiliated Company transfers in(out) represent the net movement of
Participant account balances among the Plan and other defined contribution
benefit plans of Affiliated Companies.
ADMINISTRATION
The designated trustee of all the aforementioned funds is Merrill
Lynch Trust Company of America (Merrill Lynch). The administration of the
Plan is vested in the Employee Benefit Plans Board. The Board of Directors of
Conoco Inc. or its delegate may designate three or more persons to serve on
the Employee Benefit Plans Board, which has the authority to prescribe
regulations for the administration of the Plan, review all claims for benefits
under the Plan and enter into agreements with one or more entities, including,
but not limited to insurance companies, banks, and other investment
organizations, to provide a stable rate of return for the Fixed Income Fund.
Brokerage fees, transfer taxes, investment fees and other expenses
incident to the purchase and sale of securities and investments in the Fixed
Income Fund, DuPont Common Stock Fund, Asset Allocation Funds, Index Funds,
and Mutual Funds shall be included in the cost of such securities of
investments, or deducted from the sales proceeds, as the case may be. All
administrative expenses not specified in the preceding sentence, shall be paid
<PAGE>
PAGE 25
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
out of rebates of record keeping costs and other discounts in connection with
investment vehicles available in the Plan. If such assets or other discounts
are paid to the Plan, any excess remaining after the reasonable administration
expenses of the Plan have been paid shall be allocated to the accounts of all
Participants in the Plan who have an Employee Account balance greater than
zero on an allocation date designated by the Plan Administrator. The balance
of any administrative expenses not paid as described above, shall be paid by
the Company.
While the Company has not expressed any intent to terminate the Plan,
it is free to do so at any time. In the event the Plan is terminated, all
Participants become vested and the distribution of all account balances will
be made based upon the valuation of the Participant's account on the
termination date.
RECEIVABLES
Receivables are comprised of Employee Deposits of $2,905 and $2,666,
Company Contributions of $1,997 and $2,023, and loan repayments of $1,128 and
$1,151, which are amounts due as of December 31, 1997 and 1996, respectively.
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The accompanying financial statements are prepared on the accrual
basis of accounting. The Plan's investments are stated at fair value, except
for the Fixed Income Fund, which is stated at contract value. The Fixed
Income Fund guaranteed investment contracts, separate account guaranteed
investment contracts and synthetic guaranteed investment contracts are fully
benefit responsive and thus, are stated at cost plus accrued interest, using
the contracted interest rates applied to the daily account balances. Mutual
Funds are valued at quoted market prices which represent the net asset value
of shares held by the Plan at year-end. Common/Collective Trust Funds are
stated at the fair value of all underlying assets as reported by the
applicable custodian. Loans to Participants, short-term investments, and cash
are valued at cost which approximates fair value. DuPont common stock is
valued at its quoted market price at year-end.
The purchase of shares of DuPont common stock may be made in the open
market or from DuPont if it shall have made treasury or authorized but
unissued shares available for such purchases, in which event the purchase
price shall be the closing price of such stock as reported on the New York
Stock Exchange--Composite Transactions on the last day preceding the date of
such purchase from DuPont.
Dividend income is recorded on the ex-dividend date and interest
income is recorded when earned. Realized gains and losses on the sale of the
DuPont Common Stock Fund investment securities are based on average cost of
the securities sold. Purchases and sales are recorded on a trade date basis.
<PAGE>
PAGE 26
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan Administrator to make
estimates and assumptions that affect the reported amounts in the financial
statements. Actual results could differ from those estimates.
NOTE 3 -- INVESTMENTS
The Fixed Income Fund option provided by the Plan is also available to
Participants in the Investment Plan for Salaried Employees of Consol Inc. (the
"Consol Plan"), administered by Consol Inc., a corporate joint venture owned
equally by DuPont and subsidiaries of RWE AG of Germany, and Sentinel
Transportation Company Thrift Plan (the "Sentinel Plan") administered by
Sentinel Transportation Company, a wholly-owned subsidiary of DuPont.
Accordingly, the investments in these funds by Participants in the Plan and
the Consol and Sentinel Plans have been commingled for investment purposes;
however, the three Plans' assets are accounted for separately by the trustee.
The Fixed Income Fund consists of guaranteed investment contracts
(GICs), separate account GICs (SAGICs), and synthetic guaranteed investment
contracts (SYNs).
The following individual contracts represent more than 5% of the net
assets available for plan benefits as of December 31, 1997 and 1996:
Metropolitan Life Insurance Co. - 7.12%, No Maturity Date (SAGIC)
Prudential Insurance Co. - 8.55%, 7/01/2001 (SAGIC)
Prudential Insurance Co. - 7.08%, 7/01/2001 (SAGIC)
The ending balances of these contracts are listed below:
Current Value Current Value
12/31/97 12/31/96
Metropolitan Life Insurance Co. $ 210,565 $ 194,120
Prudential Insurance Co. 268,581 184,706
Prudential Insurance Co. 0 182,121
The crediting interest rates ranged from 5.74% to 9.96% for the years
ended December 31, 1997 and 1996. The fund's blended rate of return for the
year was 7.62% in 1997 and 7.99% in 1996.
The crediting rates for most SAGIC and SYN contracts are reset
annually and are based on the market value of the underlying portfolio of
assets backing these contracts. Inputs used to determine the crediting rate
include each contract's portfolio market value, current yield-to-maturity,
duration (i.e., the present value of the weighted average life), and market
value relative to contract value. All contracts have a guaranteed rate of 0%
or higher.
<PAGE>
PAGE 27
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
The contract values of investment contracts as of December 31,1997 are
as follows:
Contract Value
--------------
Guaranteed Investment Contracts $ 337,055
Separate Account Guaranteed Investment Contracts 479,146
Synthetic Guaranteed Investment Contracts 962,886
--------------
$ 1,779,087
==============
The total contract value of $1,779,087 includes direct Participant
investments of $1,772,699 and investments of $6,388 held by the Conservative,
Moderate and Aggressive Allocation Portfolios.
The fair value of synthetic guaranteed investment contracts is
$987,079. Included in the fair value of synthetic guaranteed investment
contracts is $24,193 related to wrapper contracts which guarantee the contract
value of the synthetic guaranteed investment contracts for participant
initiated withdrawal events.
NOTE 4 -- REALIZED AND UNREALIZED GAINS AND LOSSES
Realized and unrealized gains and losses are calculated based upon
historical cost of assets. Such gains and losses are computed on a current
value basis for Form 5500. The difference may result in a differing
classification between realized and unrealized but the total gain or loss will
be unaffected.
NOTE 5 -- INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company
by a letter dated August 7, 1995 that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of
the Code. The Plan has been amended since receiving the determination letter.
However, the Plan Administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Code.
<PAGE>
PAGE 28
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
NOTE 6 -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for
benefits per the financial statements to the Form 5500:
December 31,
1997 1996
----------- -----------
Net assets available for plan benefits
per the financial statements $ 3,098,750 $ 2,867,058
Less: Amounts allocated to withdrawing
participants (115) (1,802)
----------- -----------
Net assets available for plan benefits
per the Form 5500: $ 3,098,635 $ 2,865,256
=========== ===========
The following is a reconciliation of plan benefits paid to Participants per
the financial statements to the Form 5500:
Year Ended
December 31, 1997
-----------------
Plan benefits paid to Participants per the financial
statements $ 242,120
Add: Amounts allocated to withdrawing
Participants at December 31, 1997 115
Less: Amounts allocated to withdrawing
Participants at December 31,1996 (1,802)
-----------
Plan benefits paid to Participants per the Form 5500 $ 240,433
===========
Amounts allocated to withdrawing Participants are recorded on the Form 5500
for plan benefit claims that have been processed and approved for payment
prior to December 31 but not yet paid as of that date.
NOTE 7 -- RELATED PARTY TRANSACTION
Certain Plan investments are shares of mutual funds managed by the
Trustee. Therefore, transactions in these investments qualify as
party-in-interest transactions which are exempt from the prohibited
transaction rules.
NOTE 8 -- SUBSEQUENT EVENTS
Effective January 1, 1998, the maximum allowable monthly contribution
rate for the before-tax account will increase from 15% to 19%. Accordingly,
the total maximum monthly contribution rate (before-tax plus after-tax) will
increase to 38% subject to certain limitations on total annual contributions.
<PAGE>
PAGE 29
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
(Dollars in Thousands)
Effective May 11, 1998 DuPont announced that it plans to offer up to
20 percent of the common stock of its wholly-owned energy subsidiary, Conoco
Inc., to the public in an Initial Public Offering (IPO). The full impact of
this transaction on the Plan is unknown at this time.
<PAGE>
<TABLE>
PAGE 30
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
(Dollars in Thousands)
<CAPTION>
Description Cost Current Value
----------- ----------- -------------
<S> <C> <C>
Aetna Life Insurance Co.--9.32%, 6/1/99 (GIC) .................................... $ 41,172 $ 41,172
Aetna Life Insurance Co.--9.89%, 6/1/00 (GIC) .................................... 54,873 54,873
Metropolitan Life Insurance Co.--7.12%, No Maturity Date (SAGIC) ................. 210,565 210,565
New York Life Insurance Co.--9.71%, 6/1/99 (GIC) ................................. 42,655 42,655
New York Life Insurance Co.--9.11%, 6/1/99 (GIC) ................................. 40,722 40,722
Principal Financial Group--9.50%, 6/1/98 (GIC) ................................... 21,768 21,768
Principal Financial Group--9.10%, 6/1/99 (GIC) ................................... 39,406 39,406
Prudential Insurance Co.--9.66%, 6/1/98 (GIC) .................................... 22,059 22,059
Prudential Insurance Co.--9.96%, 6/1/98 (GIC) .................................... 22,624 22,624
Prudential Insurance Co.--8.55%, 7/1/01 (SAGIC) .................................. 268,581 268,581
Travelers Insurance Co.--9.66%, 6/1/00 (GIC) ..................................... 51,776 51,776
---------- ----------
816,201 816,201
---------- ----------
Aetna Life Insurance Co.--7.47%, No Maturity Date (SYN), Aeltus Investment
Management ..................................................................... 117,198 123,736
Bankers Trust Co.--7.85%, 12/31/25 (SYN), Brundage, Story & Rose ................. 76,663 83,300
Bankers Trust Co.--5.736%, 12/31/99 (SYN), Pacific Investment Management ......... 98,353 97,530
CDC Capital Inc.--6.95%, 10/1/02 (SYN), CDC Capital Inc. ......................... 82,364 79,569
Citibank--7.42%, 8/31/01 (SYN), Merrill Lynch Institutional Fund Management ...... 48,663 49,229
Deutsche Bank--6.34%, No Maturity Date (SYN), Wellington Management Company ...... 104,128 106,307
Deutsche Bank--6.58%, No Maturity Date (SYN), Pacific Investment Management ...... 62,944 68,858
J. P. Morgan--5.78%, 6/3/00 (SYN), Sanford C. Bernstein and Co., Inc. ............ 110,891 109,562
Peoples Security Life Insurance Co., Aegon USA 6.588%, 1/1/04 (SYN), Loomis
Sayles & Co. ................................................................... 131,050 133,459
Union Bank of Switzerland--6.84%, 1/1/25 (SYN), DuPont Pension Fund Investment ... 130,632 135,529
Net Wrapper Value ................................................................ (24,193)
---------- ----------
962,886 962,886
---------- ----------
Total GIC, SAGIC and SYN <Fa> ................................................ 1,779,087 1,779,087
Less: Fixed Income Contracts held by Asset Allocation Portfolios <Fb> ........ (6,388) (6,388)
---------- ---------
$1,772,699 $1,772,699
---------- ----------
<FN>
- -----------------------------
<Fa> GIC = Guaranteed Investment Contract; SAGIC = Separate Account GIC;
SYN = Synthetic Guaranteed Investment Contract
<Fb> The Conservative, Moderate and Aggressive Asset Allocation Portfolios
hold investments in Fixed Income Fund Contracts of $2,542, $3,382 and
$464, respectively, totaling $6,388.
Continued on next page
</TABLE>
<PAGE>
<TABLE>
PAGE 31
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE I
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
(Continued)
(Dollars in Thousands)
<CAPTION>
Description Cost Current Value
----------- ---------- -------------
<S> <C> <C>
* DuPont Common Stock........................... $ 443,865 $ 750,575
* Aggressive Asset Allocation Portfolio <Fb>.... 2,143 2,213
* Conservative Asset Allocation Portfolio <Fb>.. 3,485 3,608
* Moderate Asset Allocation Portfolio <Fb>...... 6,446 6,649
Barclays 3-Way Asset Allocation Fund.......... 36,813 63,489
Fidelity Low Priced Stock..................... 10,160 10,164
Franklin Small Cap Growth I................... 11,435 10,796
Janus Enterprise.............................. 392 391
Janus Mercury................................. 1,292 1,143
Hotchkis & Wiley International................ 7,643 7,118
* Merrill Lynch Small Company Stock Index....... 4,895 4,988
* Merrill Lynch Equity Index Tier 6............. 86,059 94,160
* Merrill Lynch International Stock Index....... 1,014 969
MFS Total Return.............................. 736 729
* Merrill Lynch Global Holdings................. 21,324 21,194
Templeton Growth I............................ 5,394 4,717
AIM Value A................................... 2,878 2,662
Fidelity Growth & Income...................... 7,420 7,581
* Merrill Lynch Growth A........................ 13,774 12,625
AIM Equity Constellation A.................... 2,491 2,265
Franklin Balance Sheet Investment............. 7,032 6,916
Templeton Foreign I........................... 8,683 7,569
Fidelity Magellan Fund........................ 117,235 148,389
Fidelity Fund................................. 2,309 2,283
Fidelity Equity-Income........................ 7,299 7,393
Franklin Custody Growth I..................... 1,510 1,526
MFS Research A................................ 2,494 2,411
* Merrill Lynch Capital Fund A.................. 27,665 31,930
* Merrill Lynch Basic Value Fund A.............. 35,437 43,690
* Loans to Participants (8.25% - 8.75%)......... 36,156 36,156
Short Term Investments and Cash............... 23,722 23,722
---------- ----------
Total Investment Portfolio $2,711,900 $3,092,720
========== ==========
<FN>
- ----------------
* Party in interest to the Plan.
<Fa>GIC = Guaranteed Investment Contract; SAGIC = Separate Account GIC;
SYN = Synthetic Guaranteed Investment Contract
<Fb>The Conservative, Moderate and Aggressive Asset Allocation Portfolios hold
investments in Fixed Income Fund Contracts of $2,542, $3,382 and
$464, respectively, totaling $6,388.
</TABLE>
<PAGE>
<TABLE>
PAGE 32
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
SCHEDULE II
ITEM 27D-SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars In Thousands)
Transaction or Series of Transactions in Excess
of 5% of Current Value of Plan Assets as of January 1, 1997
<CAPTION>
Contract Current
Identity Value/ Value On
of Party Description Purchase Sales Cost of Transaction Gain on
Involved of Asset Price Price Asset Date Transaction
- ------------ ------------ -------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
DuPont Common Stock $358,834 $358,834 $358,834
DuPont Common Stock $210,978 166,126 210,978 $ 44,852
Fixed Income GIC 372,060 372,060 372,060
Fixed Income GIC 706,514 533,048 706,514 173,466
</TABLE>
<PAGE>
PAGE 33
EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-36339) of E. I. du Pont de Nemours and Company
of our report dated June 10, 1998 which appears on page 4 of this Annual
Report on Form 11-K.
PRICE WATERHOUSE LLP
Houston, Texas
June 22, 1998
