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) March 15, 1999
(March 12, 1999)
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-815 51-0014090
(State or Other Jurisdiction (Commission (I.R.S Employer
of Incorporation) File Number) Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 774-1000
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Item 5. Other Events
------------
In connection with Debt and/or Equity Securities that may be offered
on a delayed or continuous basis under Registration Statements on Form S-8
(No. 33-53327, No. 33-61339 and No. 33-60069), we hereby file the following
press release.
Contact: Susan Gaffney
(302) 774-2698
DUPONT OUTLINES SUSTAINABLE GROWTH STRATEGY FOR INVESTORS
WILMINGTON, Del., March 12 -- At a meeting here today for securities
analysts and investors, DuPont's Chairman and Chief Executive Officer,
Charles O. Holliday, Jr., outlined a broad strategy for the company to achieve
sustainable growth.
"DuPont is a science company. We bring science to the marketplace in
ways that benefit people and generate value for our shareholders," Holliday
said. "Through science, our goal is to accelerate the transformation of
DuPont using a combination of portfolio adjustments, new business models based
more on knowledge intensity and less on capital investment, and the use of Six
Sigma technology for productivity improvement."
Speaking to the audience of more than 200 securities analysts and
institutional investors, Holliday outlined the company's progress toward
becoming a faster growing, more profitable and less cyclical company. "We
called this meeting to address the issues that are on your mind, and our
agenda is designed to deal specifically with the information that you need to
value our efforts and our businesses." Highlights included:
o DuPont announced that it is in discussion with Pioneer Hi-Bred
International Inc. regarding a possible business combination. There
can be no assurances that any transaction will be concluded.
o On the productivity front, Holliday announced that DuPont will
implement Six Sigma quality programs throughout the company. "We will
create significant productivity improvements through cost reduction
and revenue enhancement, and we expect to see some positive impact as
early as this year," he said.
o DuPont's annual capital expenditure budget is being reduced - totaling
about $2 billion in 1999, down from $2.3 billion (excluding Conoco,
which is reported as discontinued operations) in 1998.
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o Plans to improve polyester operations, currently at a deep cyclical
trough, include significant cost and capital reduction, introduction
of new technologies, and creating alliances and joint ventures. "If
we do not see the anticipated improvements, we will pursue other
alternatives," Holliday said.
o DuPont is "changing the business model" under which its large nylon
enterprise operates. Although profitable today, the imperative is to
grow the business with less capital intensity and further reduce
cyclicality.
o DuPont also noted that it expects by mid-2000 to begin receiving its
full 50 percent share of earnings from "Cozaar", an antihypertension
drug, under the equalization agreement with Merck. It is difficult to
determine the exact date because of the complicated formula under
which equalization will occur.
o Holliday said the company would aggressively and rapidly pursue
efforts to grow its Life Sciences businesses: Crop Protection
Products, Nutrition & Health, and Pharmaceuticals. Earlier this week
DuPont announced that it is actively seeking alliances with strong
partners in the pharmaceuticals industry, and that its board has
authorized actions toward the creation and issuance of a "tracking"
stock for its life sciences businesses.
o DuPont also noted at the meeting that the previously announced
negotiations with Tongkook, a Korean elastane fiber producer, have
been terminated.
In response to new financial reporting requirements, and to help
investors better understand its businesses, the company also unveiled a new
financial reporting structure for its business portfolio. With its 1998
annual report, DuPont will begin discussing its performance according to eight
reportable segments: Agriculture & Nutrition, Nylon Enterprise, Performance
Coatings & Polymers, Pharmaceuticals, Pigments & Chemicals, Polyester
Enterprise, Specialty Fibers and Specialty Polymers. In addition, the company
has an "Other" segment which represents less than 2 percent of total 1998
segment sales.
The company also made available today three-year summary financial
data for consolidated operations according to the new segment alignment.
Those data are attached to this release and will be available at the company's
website, http://www.dupont.com/corp/ir/98/3yrsum.html.
--------------------------------------------
Founded in 1802, DuPont is a global science and technology-based
company. DuPont serves worldwide markets including food and nutrition, health
care; agriculture, fashion and apparel; home and construction; electronics;
and transportation. The company operates in more than 70 countries and has
92,000 employees.
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Forward-Looking Statements: This news release contains forward-
looking statements based on management's current expectations, estimates and
projections. All statements that address expectations or projections about
the future, including statements about the company's strategy for growth,
product development, market position, expected expenditures, financial results
are forward-looking statements. Some of the forward-looking statements may be
identified by words like "expects," "anticipates," "plans," "intends,"
"projects," "indicates," and similar expressions. These statements are not
guarantees of future performance and involve a number of risks, uncertainties
and assumptions. Many factors, including those discussed more fully elsewhere
in this release and in DuPont's filings with the Securities and Exchange
Commission, particularly its Current Report on Form 8-K filed on November 13,
1998, as well as others, could cause results to differ materially from those
stated. These factors include, but are not limited to changes in the laws,
regulations, policies and economic conditions of countries in which the
company does business; competitive pressures; successful integration of
structural changes, including acquisitions, divestitures and alliances;
failure of the company or related third parties to become Year 2000 capable;
research and development of new products, including regulatory approval and
market acceptance.
###
3/12/99
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E. I. DU PONT DE NEMOURS AND COMPANY AND
CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
THREE-YEAR SUMMARY OF SEGMENT SALES AND NET ASSETS
(Dollars in millions)
Segment Sales(1)
--------------------------------
1998 1997 1996
-------- -------- --------
Agriculture & Nutrition $ 3,156 $ 2,513 $ 2,443
Nylon Enterprise 4,594 4,582 4,186
Performance Coatings & Polymers 4,607 4,676 4,573
Pharmaceuticals 1,109 753 721
Pigments & Chemicals 3,659 3,812 3,734
Polyester Enterprise 2,797 2,215 2,337
Specialty Fibers 3,296 3,320 3,095
Specialty Polymers 4,093 4,094 3,835
Other 445 1,022 1,542
------- ------- -------
Total Segment Sales 27,756 26,987 26,466
Elimination of Intersegment Transfers (729) (754) (818)
Elimination of Equity Affiliate Sales (2,260) (2,204) (2,045)
Miscellaneous - 60 41
------- ------- -------
Total Sales Per Consolidated
Financial Statements $24,767 $24,089 $23,644
======= ======= =======
Segment Net Assets(2)
--------------------------------
1998 1997 1996
-------- -------- --------
Agriculture & Nutrition $ 4,069 $ 3,231 $ 1,405
Nylon Enterprise 3,082 2,928 2,325
Performance Coatings & Polymers 2,214 2,043 1,879
Pharmaceuticals 1,843 404 439
Pigments & Chemicals 1,734 1,885 1,929
Polyester Enterprise 3,142 3,156 1,212
Specialty Fibers 2,574 2,332 2,232
Specialty Polymers 2,183 2,011 1,865
Other 260 375 1,123
------- ------- -------
Total Segment Net Assets 21,101 18,365 14,409
Corporate Assets 4,768 5,296 5,990
Liabilities Included in Net Assets 4,250 4,630 4,092
Net Assets of Discontinued Operations 8,417 8,398 7,851
------- ------- -------
Total Assets Per Consolidated
Financial Statements $38,536 $36,689 $32,342
======= ======= =======
- -----------------
(1) Segment sales include pro rata equity affiliate sales and intersegment
transfers.
(2) Segment net assets measures net working capital, net permanent
investment and other noncurrent operating assets and liabilities of
the segment.
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
THREE-YEAR SUMMARY OF UNDERLYING AND REPORTED ATOI
(Dollars in millions)
<CAPTION>
Underlying ATOI Reported ATOI
----------------------------- ---------------------------------------
1998 1997 1996 1998 1997 1996
------- ------- ------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Agriculture & Nutrition $ 330 $ 448 $ 461 $ 257 <Fa> $(1,017)<Ff> $ 351 <Fj>
Nylon Enterprise 406 372 354 244 <Fb> 372 334 <Fk>
Performance Coatings & Polymers 525 519 447 508 <Fb> 519 502 <Fl>
Pharmaceuticals 185 162 305 (668)<Fc> 234 <Fg> 305
Pigments & Chemicals 581 513 507 577 <Fb> 513 493 <Fk>
Polyester Enterprise (7) 187 177 (228)<Fd> 124 <Fh> 161 <Fk>
Specialty Fibers 662 708 624 659 <Fb> 708 624
Specialty Polymers 608 577 496 598 <Fb> 577 496
Other 105 (5) (69) 183 <Fe> (225)<Fi> (24)<Fm>
------ ------ ------ ------ ------- ------
Total After-Tax Operating Income 3,395 3,481 3,302 2,130 1,805 3,242
Interest and Exchange Gain (Losses) (292) (226) (182) (292) (226) (182)
Corporate Expenses (190) (147) (129) (190) (147) (129)
------ ------ ------ ------ ------- ------
Income From Continuing Operations $2,913 $3,108 $2,991 $1,648 $ 1,432 $2,931
====== ====== ====== ====== ======= ======
Diluted EPS for Continuing Operations $ 2.55 $ 2.70 $ 2.61 $ 1.43 $ 1.24 $ 2.56
<FN>
- -----------------------
1998
- ----
<Fa> Includes a $60 charge to adjust the preliminary allocation of purchased
in-process research and development for PTI and a $13 charge related to
productivity improvement initiatives.
<Fb> Includes charges associated with productivity improvement initiatives
(Nylon Enterprise - $162; Performance Coatings & Polymers - $17; Pigments
& Chemicals - $4; Specialty Fibers - $3; Specialty Polymers - $10).
<Fc> Includes a $799 charge for purchased in-process research and development
associated with the purchase of Merck's 50 percent interest in The DuPont
Merck Pharmaceutical Company and a $54 impairment write-down to fair
value of certain Pharmaceuticals assets.
<Fd> Includes a $123 charge for adjustments to the preliminary allocation of
purchased in-process research and development for the purchase of the ICI
polyester businesses and a $98 charge associated with productivity
improvement initiatives.
<Fe> Includes a $121 gain on the sale of CONSOL Energy Inc. and a $43 charge
related to productivity improvement initiatives.
</TABLE>
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[FN]
1997
- ----
<Ff> Includes charges of $1,403 for purchased in-process research and develop-
ment related to the Pioneer transaction ($903) and PTI transaction ($500)
and $62 associated with the "Benlate" 50 DF fungicide recall.
<Fg> Includes a benefit of $72 from the gain on the sale by DuPont Merck of
its generic and multisource product lines.
<Fh> Includes a charge of $63 for purchased in-process research and develop-
ment related to the ICI polyester resins and intermediates transaction.
<Fi> Includes a charge of $220 associated with the divestiture of certain
printing and publishing businesses.
1996
- ----
<Fj> Includes $110 charge associated with the "Benlate" 50 DF fungicide
recall.
<Fk> Includes charges associated principally with employee separation costs in
the United States (Nylon Enterprise - $20; Pigments & Chemicals - $14;
Polyester Enterprise - $16).
<Fl> Includes $55 benefit associated with formation of DuPont Dow elastomers
joint venture.
<Fm> Includes gains of $41 from the sale of certain medical products
businesses and $33 related to sale of stock received in connection with
the previously sold connector systems business, and a charge of $29,
principally employee separation costs outside the United States,
associated with the printing and publishing business.
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
THREE-YEAR SUMMARY OF ADDITIONAL SEGMENT DATA
(Dollars in millions)
<CAPTION>
Agriculture Performance Pigments
& Nylon Coatings & Pharma- & Polyester Specialty Specialty
Nutrition Enterprise Polymers ceuticals Chemicals Enterprise Fibers Polymers Other Total
----------- ---------- ----------- --------- --------- ---------- --------- --------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998
- ----
Depreciation and
Amortization<F1> $ 133 $236 $149 $ 60 $232 $ 419 $230 $169 $ 64 $1,692
Equity in Earnings
of Affiliates<F2> 10 35 16 77 (3) (1) 25 12 81 252
Provision for
Income Taxes 25 140 264 (317) 303 (100) 331 318 89 1,053
Affiliate Net
Assets<F3> 1,169 551 281 23 62 174 134 237 - 2,631
Expenditures for
Long-Lived
Assets<F4> 214 493 229 655 189 706 361 267 134 3,248
1997
- ----
Depreciation and
Amortization<F1> $ 73 $231 $157 $ - $241 $ 126 $240 $178 $ 64 $1,310
Equity in Earnings
of Affiliates<F2> (913) 42 67 232 - 3 23 21 67 (458)
Provision for
Income Taxes (16) 177 274 142 238 77 319 289 (178) 1,322
Affiliate Net
Assets<F3> 882 507 262 437 68 158 127 199 249 2,889
Expenditures for
Long-Lived
Assets<F4> 499 490 258 - 203 1,131 285 320 136 3,322
1996
- ----
Depreciation and
Amortization<F1> $ 70 $244 $198 $ - $253 $ 147 $247 $179 $ 101 $1,439
Equity in Earnings
of Affiliates<F2> 6 26 51 302 - 11 20 25 36 477
Provision for
Income Taxes 56 172 282 186 231 76 287 250 (63) 1,477
Affiliate Net
Assets<F3> 28 283 220 479 70 144 116 185 436 1,961
Expenditures for
Long-Lived
Assets<F4> 88 300 219 - 196 167 326 247 67 1,610
<FN>
- -----------------------------------
<F1> Depreciation and amortization includes depreciation on research and
development facilities and amortization of intangible assets.
<F2> Equity in earnings of affiliates are reported on an ATOI basis.
<F3> Affiliate net assets (pro rata share) exclude borrowings and other
long-term liabilities.
<F4> Expenditures for long-lived assets excludes investments in affiliates and
includes payments for long-lived assets as part of business acquisitions.
</TABLE>
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
THREE-YEAR SUMMARY OF GEOGRAPHIC INFORMATION
(Dollars in millions)
<CAPTION>
1998 1997 1996
------------------- ------------------- -------------------
Net Net Net Net Net Net
Sales<F1> Property Sales<F1> Property Sales<F1> Property
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
North America
United States $13,075 $ 8,454 $12,802 $ 7,469 $12,472 $ 6,690
Canada 881 459 867 559 808 526
Mexico 421 117 402 118 343 103
Other 93 135 65 74 66 74
------- ------- ------- ------- ------- -------
Total 14,470 9,165 14,136 8,220 13,689 7,393
Europe, Middle
East and Africa
Germany 1,450 388 1,300 384 1,214 517
United Kingdom 988 1,078 925 759 968 467
France 904 181 863 174 962 167
Italy 902 5 818 5 832 6
Other 2,108 1,188 2,029 1,102 2,091 1,023
------- ------- ------- ------- ------- -------
Total 6,352 2,840 5,935 2,424 6,067 2,180
Asia Pacific
Japan 820 159 914 77 1,020 101
Taiwan 591 707 396 688 356 219
China 398 208 373 205 348 161
Singapore 86 635 85 584 63 561
Other 947 244 1,157 212 1,138 190
------- ------- ------- ------- ------- -------
Total 2,842 1,953 2,925 1,766 2,925 1,232
South America
Brazil 659 83 642 106 560 101
Other 444 90 451 85 403 53
------- ------- ------- ------- ------- -------
Total 1,103 173 1,093 191 963 154
Total $24,767 $14,131 $24,089 $12,601 $23,644 $10,959
======= ======= ======= ======= ======= =======
<FN>
- ---------------
<F1> Sales are attributed to countries based on location of customer.
</TABLE>
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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
March 15, 1999
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