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) April 27, 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 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 April 27, 1999.
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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
April 27, 1999
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EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- ------------------------------------------------------------
99 Copy of the Registrant's Earnings Press Release, dated
April 27, 1999.
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EXHIBIT 99
Contact: Susan Gaffney
(302) 774-2698
DUPONT REPORTS FIRST QUARTER 1999 EARNINGS
------------------------------------------
Wilmington, Del., April 27 -- DuPont reported first
quarter diluted earnings per share from continuing operations
before nonrecurring items of $.66 as compared to a first quarter
record of $.68 achieved last year. Including discontinued
operations and nonrecurring items, diluted earnings per share
were $.58 compared to $.79 in 1998.
Earnings Comparisons - First Quarter
------------------------------------
Including
Nonrecurring
(per share diluted) Underlying Items
-------------- --------------
1999 1998 1999 1998
---- ---- ---- ----
Continuing Operations $.66 $.68 $.55 $.55
Discontinued Operations .03 .24 .03 .24
---- ---- ---- ----
$.69 $.92 $.58 $.79
Highlights
- ----------
o Underlying after-tax operating income from continuing
operations equaled last year's record first quarter.
o Took several major actions toward transforming both
the mature and growing portions of the DuPont portfolio,
further positioning DuPont for greater competitive
advantage:
- Completed the purchase of Herberts, Hoechst AG's
automotive coatings business, making DuPont
Performance Coatings the world's leading automotive
coatings supplier.
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- Announced an agreement to purchase the 80 percent of
Pioneer Hi-Bred International, Inc., not currently
owned by DuPont.
- Stated intentions to actively seek alliances with
strong partners in the pharmaceuticals industry.
- Announced the intention to issue a tracking stock
for the life science businesses.
- Signed letters of intent to form several joint
ventures for the global Polyester Enterprise.
"We are encouraged by our near-record first quarter
earnings per share despite continuing difficulties in the
overall global business environment," said Charles O.
Holliday, Jr. chairman and chief executive officer. "In addi-
tion, we began a series of transactions that are critical to
transforming our business model for mature businesses. We also
took steps to grow DuPont's businesses where our science offers
competitive advantage. This combination of earnings performance
and the speed with which we are shifting into higher growth
businesses and repositioning our mature businesses demonstrates
our commitment to execute simultaneously both our short- and
long-term objectives."
RESULTS FROM CONTINUING OPERATIONS
- ----------------------------------
Sales in the quarter were $6.3 billion, up 2 percent
from $6.2 billion in the first quarter of 1998. Volumes,
including acquisitions, were up 4 percent while worldwide
average prices were down 2 percent, including currency effects.
Excluding acquisitions, worldwide volumes were down about
2 percent from the record first quarter of last year.
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Regionally, U.S. volumes were comparable with last
year's first quarter, while prices were down 3 percent,
adversely affected by a significant decrease in polyester fiber
prices. In Europe, volumes were down 8 percent while prices
were generally flat. In Asia Pacific, volumes were up 6 percent
and prices were down 2 percent.
Raw material costs were down significantly in the first
quarter. In addition, comparable fixed costs were down
2 percent, and the impact of currency increased sales outside
the United States by about 1 percent. As a result, the total
after-tax operating income of the nine business segments
achieved the record level set in the first quarter last year.
Income from continuing operations for the first quarter
1999 was $628 million, compared to $637 million in 1998.
Excluding net charges for nonrecurring items totaling
$121 million and $145 million in 1999 and 1998, respectively,
underlying income was $749 million versus $782 million in 1998,
down 4 percent.
"Based upon our first quarter results, we believe that
1999 could be slightly stronger than expected, reinforcing our
confidence that DuPont will return to our stated objective of
double-digit earnings growth next year," Holliday said.
In the current quarter nonrecurring items include
charges related to the Herberts' acquisition as described in the
accompanying footnotes. First quarter 1998 nonrecurring items
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included a charge for a revision to the estimate for purchased
in-process research and development related to the PTI acquisi-
tion and a charge for global nylon operations modernization.
Segment Analysis
----------------
The following compares the first quarter 1999 with the
first quarter 1998 for segment sales and earnings before
nonrecurring items described in the accompanying footnotes.
Segment results include intersegment transfers and a pro rata
ownership share of the sales and earnings of equity affiliates.
Total segment after-tax operating income was $903 million, equal
to last year.
Agriculture & Nutrition segment earnings were up
2 percent, as stronger U.S. earnings offset lower results out-
side the United States and increase in research and development.
Segment sales increased 1 percent reflecting flat prices and a
modest volume increase.
Nylon Enterprise segment earnings were up 13 percent
principally reflecting increased earnings from carpet fibers.
Segment sales were down 6 percent including 3 percent lower
prices. The impact of lower prices was offset by lower raw
materials costs and fixed costs. Total cost productivity
improved 4 percent versus the first quarter 1998.
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Performance Coatings & Polymers segment earnings were up
15 percent, principally reflecting better results for engineer-
ing polymers and elastomers. Herberts' results are being
consolidated one month in arrears and therefore will first be
included in the second quarter.
Pharmaceuticals segment earnings were $75 million
compared with $50 million, up 50 percent. Segment sales were
$409 million, up 88 percent from $217 million last year. These
results reflect the current 100 percent ownership of the pharma-
ceuticals business versus 50 percent last year. In addition,
earnings improvement also reflects higher income from "Cozaar"
antihypertensive, largely offset by higher research and develop-
ment expense and goodwill amortization.
Pigments and Chemicals segment earnings were down
7 percent, reflecting lower earnings in Specialty Chemicals,
partly offset by better results for white pigments and
fluorochemicals. The earnings decline in Specialty Chemicals
reflects generally lower industrial chemical volumes and
specialty prices as well as the absence of a gain from the sale
of a hydrogen peroxide plant last year.
Polyester Enterprise segment posted a loss of $6 million
versus earnings of $4 million last year reflecting 15 percent
lower sales. Over capacity and intense price pressure continue
to depress polyester results. Better results from resins and
intermediates were more than offset by lower earnings for
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polyester films and "Dacron" polyester fiber. Recently
announced ventures with Teijin, Sabanci Holding and Alpek should
greatly strengthen the company's position in polyester.
Specialty Fibers segment earnings were down 4 percent,
principally reflecting lower "Lycra" spandex earning which were
modestly below their record first quarter in 1998. Earnings
from Nonwovens were up on strong U.S. sales of "Tyvek" and
"Sontara". Segment sales were up 1 percent.
Specialty Polymers segment earnings were 4 percent
higher principally reflecting strength in the Photopolymers and
electronic materials.
The Other segment earnings were $10 million versus
$45 million last year, principally reflecting the absence of
earnings from the company's interest in coal which has been
substantially divested. Partly offsetting was a gain on the
sale of shares of DuPont Photomasks, Inc.
DISCONTINUED OPERATIONS
- -----------------------
Income from discontinued operations (Conoco, DuPont's
energy subsidiary) was $35 million compared to $269 million,
down 87 percent. Oil production was flat versus first quarter
1998, while gas production increased significantly. However,
upstream oil and gas prices both declined over 20 percent. This
combined with lower downstream prices and margins and the
reduction of the company's ownership to 70 percent, resulted in
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a significant decline in earnings. Please refer to the press
release issued by Conoco today for additional information and
perspective regarding its operations.
Forward-Looking Statements
- --------------------------
This news release contains forward-looking statements
based on management's current expectations, estimates and pro-
jections. All statements that address expectations or projec-
tions about the future, including statements about the company's
strategy for growth, product development, market position,
expected expenditures and 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 latest annual report on Form 10-K,
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
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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.
4/27/99
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended
CONSOLIDATED INCOME STATEMENT March 31
- --------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1999 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
SALES ........................................................ $6,295 $6,194
Other Income ................................................. 18<Fa> 297
------ ------
Total .................................................... 6,313 6,491
------ ------
Cost of Goods Sold and Other Expenses ........................ 3,873 4,049
Selling, General and Administrative Expenses ................. 535 479
Depreciation and Amortization ................................ 335 332
Research and Development ..................................... 358 264
Interest Expense ............................................. 96 127
Purchased In-Process Research and Development<Fb> ............ 40 60
Employee Separation Costs and Write-Down of Assets ........... - 118<Fc>
------ ------
Total .................................................... 5,237 5,429
------ ------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
AND MINORITY INTERESTS ...................................... 1,076 1,062
Provision for Income Tax Expenses ............................ 432 417
Minority Interests in Earnings of Consolidated Subsidiaries .. 16 8
------ ------
INCOME FROM CONTINUING OPERATIONS ............................ 628 637
DISCONTINUED OPERATIONS
Income from Operations of Discontinued Business,
Net of Income Taxes ...................................... - 269
Gain on Disposal of Discontinued Business,
Net of Income Taxes ...................................... 35 -
------ ------
NET INCOME ................................................... $ 663 $ 906
====== ======
BASIC EARNINGS PER SHARE OF COMMON STOCK<Fd>
Continuing Operations ...................................... $ .55 $ .56
Discontinued Operations .................................... .04 .24
------ ------
Net Income ................................................. $ .59 $ .80
====== ======
DILUTED EARNINGS PER SHARE OF COMMON STOCK<Fd>
Continuing Operations ...................................... $ .55 $ .55
Discontinued Operations .................................... .03 .24
------ ------
Net Income ................................................. $ .58 $ .79
====== ======
DIVIDENDS PER SHARE OF COMMON STOCK .......................... $ .35 $ .315
====== ======
</TABLE>
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[FN]
NOTES TO CONSOLIDATED INCOME STATEMENT
- --------------------------------------
<Fa> Includes an exchange loss of $131 on forward exchange contracts purchased
in 1998 to lock in the U.S. dollar cost of the acquisition of Herberts,
the automotive coatings business of Hoechst AG. The purchase price for
Herberts was negotiated in German marks.
<Fb> Purchased in-process research and development represents the value
assigned in a purchase business combination to research and development
projects of the acquired business that were in progress at time of
purchase for which technological feasibility has not yet been established
and no alternative future use is anticipated.
In this regard, an estimated charge was recorded in the first quarter
1999 in conjunction with the purchase of Herberts, the automotive
coatings business of Hoechst AG, based on preliminary allocations of
purchase price that are subject to revision upon completing valuations
and completion of purchase accounting allocations.
First quarter 1998 represents a charge for revision, based on independent
appraisals, of the purchase price allocation in conjunction with the
purchase of Protein Technologies International. The charge was not tax
effected because this transaction was a stock acquisition rather than an
asset purchase.
<Fc> Represents $40 of employee separation costs within the Nylon business and
$78 for the shutdown of related manufacturing facilities.
<Fd> Earnings per share are calculated on the basis of the following average
number of common shares outstanding:
Three Months Ended
March 31
-------------------------------
Basic Diluted
------------- -------------
1999 1,127,086,632 1,138,090,171
1998 1,128,415,102 1,145,674,145
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
CONSOLIDATED INDUSTRY SEGMENT INFORMATION - Three Months Ended
CONTINUING OPERATIONS March 31
- --------------------------------------------------------------------------------------
(Dollars in millions) 1999 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
SEGMENT SALES<Fa>
- -------------
Agriculture & Nutrition ............................... $ 780 $ 770
Nylon Enterprise ...................................... 1,103 1,173
Performance Coatings & Polymers ....................... 1,158 1,157
Pharmaceuticals<Fb> ................................... 409 217
Pigments & Chemicals .................................. 866 920
Polyester Enterprise .................................. 624 734
Specialty Fibers ...................................... 863 851
Specialty Polymers .................................... 1,002 1,034
Other ................................................. 94 164
------ ------
Total Segment Sales ............................... $6,899 $7,020
Elimination of Intersegment Transfers ................. (173) (204)
Elimination of Equity Affiliate Sales ................. (431) (622)
------ ------
SALES ............................................. $6,295 $6,194
====== ======
AFTER-TAX OPERATING INCOME (LOSS)
- ---------------------------------
Agriculture & Nutrition ............................... $ 91 $ 29<Fc>
Nylon Enterprise ...................................... 102 5<Fd>
Performance Coatings & Polymers ....................... 100<Fe> 122
Pharmaceuticals ....................................... 75 50
Pigments & Chemicals .................................. 146 157
Polyester Enterprise .................................. (6) 4
Specialty Fibers ...................................... 181 188
Specialty Polymers .................................... 164 158
Other ................................................. 10 45
------ ------
Total Segment ATOI ................................ 863 758
Interest & Exchange Gains (Losses) .................... (163)<Ff> (70)
Corporate Expenses .................................... (72) (51)
------ ------
INCOME FROM CONTINUING OPERATIONS ................. $ 628 $ 637
====== ======
</TABLE>
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[FN]
NOTES TO CONSOLIDATED INDUSTRY SEGMENT INFORMATION - CONTINUING OPERATIONS
- --------------------------------------------------------------------------
<Fa> Includes pro rata equity affiliate sales and intersegment transfers.
<Fb> The increase in sales reflects the current 100 percent ownership of the
pharmaceuticals business versus 50 percent in 1998. In addition,
effective first quarter 1999, revenues from contract manufacturing are
reclassified from Other Income to Sales, and prior periods have been
restated. These revenues are $27 and $15 for 1999 and 1998,
respectively.
<Fc> Includes a charge of $60 for revision, based on independent appraisals,
of the purchase price allocation in conjunction 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.
<Fd> Includes a charge of $85 related to rationalization of global Nylon
operations, principally shutdown of certain manufacturing facilities and
employee separation costs.
<Fe> Includes an estimated charge of $40 based on preliminary purchase price
allocations in conjunction with the purchase of Herberts, the automotive
coatings business of Hoechst AG, 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.
<Ff> Includes an exchange loss of $81 on forward exchange contracts purchased
in 1998 to lock in the U.S. dollar cost of the acquisition of Herberts,
the automotive coatings business of Hoechst AG. The purchase price for
Herberts was negotiated in German marks.
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<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
SEGMENT SALES VARIANCES
(1ST QUARTER 1999 VS 1ST QUARTER 1998)
- ----------------------------------------------------------------------------------------
Sales Percentage Change Due to:
Percent ---------------------------
Change Price Volume Other<Fa>
------- ----- ------ --------
(%) (%) (%) (%)
<S> <C> <C> <C> <C>
Agriculture & Nutrition ...................... 1 - 1
Nylon Enterprise ............................. (6) (3) (3)
Performance Coatings & Polymers .............. - (3) 3
Pharmaceuticals .............................. 88 N/A N/A 88
Pigments & Chemicals ......................... (6) 1 (7)
Polyester Enterprise ......................... (15) (13) (2)
Specialty Fibers ............................. 1 (2) 3
Specialty Polymers ........................... (3) (3) -
Other ........................................ (43) N/A N/A (43)
<FN>
- ------------------
<Fa> Includes sales increase/(decrease) due to acquisitions, divestitures.
<CAPTION>
CONSOLIDATED INDUSTRY SEGMENT INFORMATION
EXCLUDING IMPACT OF NONRECURRING ITEMS - Three Months Ended
CONTINUING OPERATIONS March 31
- --------------------------------------------------------------------------------------
(Dollars in millions) 1999 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
AFTER-TAX OPERATING INCOME (LOSS)
- ---------------------------------
Agriculture & Nutrition ...................... $ 91 $ 89
Nylon Enterprise ............................. 102 90
Performance Coatings & Polymers .............. 140 122
Pharmaceuticals .............................. 75 50
Pigments & Chemicals ......................... 146 157
Polyester Enterprise ......................... (6) 4
Specialty Fibers ............................. 181 188
Specialty Polymers ........................... 164 158
Other ........................................ 10 45
---- ----
Total Segment ATOI ....................... 903 903
Interest & Exchange Gains (Losses) ........... (82) (70)
Corporate Expenses ........................... (72) (51)
---- ----
INCOME FROM CONTINUING OPERATIONS......... $749 $782
==== ====
</TABLE>
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