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) January 26, 2000
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-815 51-0014090
(State or Other Jurisdiction (Commission (I.R.S Employer
of Incorporation) File Number) Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 774-1000
1
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
In connection with Debt and/or Equity Securities that may be offered
on a delayed or continuous basis under Registration Statements on Form S-3
(No. 33-53327, No. 33-61339, No. 33-60069 and No. 333-86363), we hereby file
the following press release.
Exhibit
Number Description of Exhibit
------- -------------------------------------------------
99 Copy of the Registrant's Earnings Press Release,
dated January 26, 2000.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
E. I. DU PONT DE NEMOURS AND COMPANY
(Registrant)
/s/ D. B. Smith
------------------------------------
D. B. Smith
Assistant Controller
January 26, 2000
3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- ------------------------------------------------------------
99 Copy of the Registrant's Earnings Press Release, dated
January 26, 2000.
4
<PAGE>
EXHIBIT 99
Contact: Clif Webb
(302) 774-4005
[email protected]
DUPONT REPORTS FOURTH QUARTER
AND FULL YEAR 1999 EARNINGS
-----------------------------
WILMINGTON, Del., Jan. 26 -- DuPont reported fourth quarter under-
lying earnings per share from continuing operations of $.55 compared to 1998
fourth quarter earnings of $.60. For the full year, underlying earnings from
continuing operations were $2.58 per share versus $2.55 in 1998.
Income from discontinued operations for 1999 was $6.80 per share,
including a $6.65 per share gain on the disposition of Conoco. Including
discontinued operations and nonrecurring charges totaling $2.39 per share,
1999 net income was $6.99 per share compared to $3.90 per share in 1998.
Earnings Highlights
-------------------
($ per share diluted)
Including
Nonrecurring and
Underlying Extraordinary Items
----------------- ---------------------
1999 1998 1999 1998
----- ----- ------- -------
Continuing Operations:
4th Quarter $ .55 $ .60 $(1.38) $ .68
Full Year 2.58 2.55 .19 1.43
Total Company:
4th Quarter .55 .61 (1.36) 2.82
Full Year 2.73 3.07 6.99 3.90
Note: Fourth quarter 1999 underlying earnings per share are calculated
based on 1,058,131,255 average diluted common shares outstanding.
Fourth Quarter Highlights
- -------------------------
o Sales grew 17 percent over the prior year including 9 percent growth
from acquisitions.
o Sales volume excluding acquisitions grew 11 percent, the Company's
strongest growth since the first quarter of 1995.
5
<PAGE>
o Four segments recorded strong double-digit underlying earnings
growth -- Pharmaceuticals, Specialty Fibers, Specialty Polymers and
Performance Coating & Polymers.
o The Polyester Enterprise posted positive underlying earnings this
quarter, the first time since second quarter 1998.
"Business conditions are showing significantly improving trends," said
Charles O. Holliday, Jr., DuPont chairman and chief executive officer.
"Volumes, excluding products from our acquired businesses, were up 11 percent,
reaching their strongest level since the first quarter 1995, which gives us
momentum as we move into the year 2000. That volume improvement, which
probably benefited from some year-end inventory build, has helped offset
continued weak pricing and recent increases in raw materials costs."
"Lower selling prices and higher raw material costs remain a concern
to us," Holliday said, "but with improving global business conditions,
particularly in Asia, we remain confident of our double-digit earnings growth
goal in 2000. We expect to experience some price improvement as business
conditions strengthen. Additionally, our corporate productivity efforts
should significantly contribute to 2000's earnings improvement."
Global Sales and Income Highlights
- ----------------------------------
Fourth quarter 1999 sales were a record $7.1 billion, 17 percent
over the fourth quarter 1998. This increase is the result of 20 percent
higher volume, partly offset by 3 percent lower selling prices. About
two-thirds of the price decline is currency effect from the stronger U.S.
dollar. Looking at results regionally:
o Sales in the Asia Pacific Region increased 36 percent, 31 percent
from volume growth, and a 5 percent benefit from higher selling
prices.
6
<PAGE>
o In Europe, sales were 27 percent higher reflecting 37 percent higher
volume, partly offset by 10 percent lower prices -- the latter largely
due to currency effect.
o U.S. sales increased 9 percent with 9 percent volume growth. Lower
prices reduced sales by less than 1 percent.
Underlying income from continuing operations was $583 million, com-
pared to $682 million in the fourth quarter 1998. The reduction principally
reflects higher net interest expense and higher corporate expenses. Under-
lying segment ATOI was equal to last year.
Net nonrecurring items in the current quarter total approximately
$2 billion after-tax and principally reflect a $2.2 billion charge to write
off purchased in-process research and development associated with the Pioneer
acquisition. This was partly offset by a $208 million gain associated with
exchange of the Company's investment in WebMD for Healtheon/WebMD. Several
other nonrecurring items, none of which individually exceed $50 million
after-tax, are essentially offsetting and are described in the accompanying
footnotes.
Full-Year Results
- -----------------
For the year, sales reached a record $26.9 billion, up 9 percent.
Acquisitions of Merck's interest in The DuPont Merck Pharmaceutical Company,
Herberts, and most recently the remaining 80 percent of Pioneer, added
$2.2 billion to 1999 sales. Looking at the year's results from a regional
perspective:
o Sales in the Asia Pacific region increased 22 percent with 22 percent
volume growth. Nearly all business units posted gains.
o European sales were up 13 percent, with volume up 18 percent. Partly
offsetting were 3 percent lower local currency prices and a 2 percent
negative impact from the stronger dollar.
7
<PAGE>
o U.S. sales were up 5 percent with 7 percent volume growth. Selling
prices were 2 percent lower.
Underlying income from continuing operations for the year was
$2.8 billion down 2 percent from $2.9 billion in 1998. On a per share basis,
income from continuing operations increased 1 percent as the average number of
common shares outstanding is 4 percent lower, as a result of the Conoco
split-off.
Business Segment Performance
- ----------------------------
Total segment sales and transfers, which include a pro rata share of
affiliates' sales, were $7.8 billion in the fourth quarter compared to
$6.7 billion last year, up 17 percent, and were $29.7 billion for the full
year, up 7 percent. The latter reflects 10 percent volume gains, partly
offset by 3 percent lower selling prices. Fourth quarter underlying segment
earnings of $784 million were equal to last year. Full year underlying
earnings were up 2 percent. Underlying operating results for individual
segments, including the newly created Pioneer segment, are summarized below:
o Performance Coatings & Polymers -- Segment earnings were up 19 percent
for the quarter and 23 percent for the full year, reflecting strength
across all business units. Full year sales were up 34 percent,
largely reflecting the addition of Herberts. Herberts also contri-
buted almost half of the earnings growth. Engineering Polymers
recorded double-digit earnings growth with strong worldwide volumes
offsetting pricing pressures and negative currency impact. In
addition, earnings from the DuPont Dow Elastomers joint venture nearly
doubled.
o Pharmaceuticals -- Segment earnings were up 33 percent for the quarter
and 42 percent for the year. The quarter results were driven
principally by improvements from SustivaTM efavirenz and "Cardiolite"
cardiac imaging agents. Partly offsetting these improvements were
planned higher research and development costs and expected lower sales
of "Coumadin" warfarin sodium.
8
<PAGE>
o Specialty Fibers -- Segment earnings increased 28 percent for the
quarter and 10 percent for the year. The quarter reflects signifi-
cantly higher sales volumes for "Lycra" spandex and Advanced Fiber
Systems. The full year earnings increase was driven by improvement in
all business units.
o Pigments & Chemicals -- Segment earnings were up 8 percent in the
quarter and the year, reflecting increased earnings for White Pigments
and Fluorochemicals. Fluorochemicals benefited from increased sales
of CFC alternative products, and White Pigments from higher worldwide
volumes.
o Pioneer -- Segment posted a loss of $125 million in line with
expectations for the historically weak fourth quarter. Excluding
acquisition-related costs, operating results were comparable to last
year's fourth quarter.
o Specialty Polymers -- Segment earnings were up 29 percent for the
quarter and up 10 percent for the year. Fourth quarter results
reflect strong performance from all business units. Fourth quarter
segment sales increased 15 percent, principally from 19 percent
worldwide volume growth, partly offset by 4 percent lower worldwide
prices. Both Fluoropolymers and Packaging and Industrial Polymers
recorded good earnings growth in the quarter, substantially reversing
declines through the first nine months.
o Nylon Enterprise -- Segment earnings were up 7 percent for the fourth
quarter on higher sales, but were down 4 percent for the year,
principally reflecting a combination of lower prices and higher raw
material costs.
o Polyester Enterprise -- Segment posted fourth quarter earnings of
$3 million versus a loss of $9 million last year, due to improved
results in "Dacron" polyester and in Polyester Resins & Intermediates.
Segment sales for the fourth quarter were up 12 percent as 14 percent
higher volume was partly offset by 2 percent lower selling prices.
For the full year, segment sales declined 5 percent, principally due
to lower selling prices. Segment losses for the year totaled
$39 million versus a loss of $7 million in 1998.
o Agriculture & Nutrition -- Segment earnings increased 5 percent in the
fourth quarter but fell 21 percent for the full year, due to weakness
in the Crop Protection Products business. Fourth quarter segment
sales increased 9 percent on 11 percent higher volume, reflecting in
part, an acquisition, with higher earnings in Crop Protection Products
partly offset by lower results in the other business.
o Other -- Segment earnings for the year were $35 million versus
$105 million in 1998, principally reflecting the absence of earnings
from the divested coal business.
9
<PAGE>
Discontinued Operations
- -----------------------
Underlying income from discontinued operations (Conoco, DuPont's
former energy subsidiary) in 1999 was $165 million compared to $608 million
last year, with the reduction principally reflecting reduced ownership and
completion of the divestiture of Conoco on August 6, 1999. The year includes
a gain of $7.3 billion or $6.65 per share on the final disposition of Conoco.
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 and financial
results are forward-looking statements. Some of the forward-looking state-
ments may be identified by words like "expects," "anticipates," "plans,"
"intends," "projects," "indicates," and similar expressions. These state-
ments 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, regula-
tions, policies and economic conditions of countries in which the company does
business; competitive pressures; successful integration of structural changes,
including acquisitions, divestitures and alliances; research and development
of new products, including regulatory approval and market acceptance,
seasonality of sales of agricultural products.
###
1/26/00
10
<PAGE>
<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
Three Months Ended Year Ended
CONSOLIDATED INCOME STATEMENT December 31 December 31
- -----------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES ........................................................ $ 7,140 $6,099 $26,918 $24,767
Other Income<Fa> ............................................. 562 356 974 981
------- ------ ------- -------
Total .................................................... 7,702 6,455 27,892 25,748
------- ------ ------- -------
Cost of Goods Sold and Other Expenses ........................ 4,681 3,755 16,991 15,556
Selling, General and Administrative Expenses ................. 811 588 2,595 2,115
Depreciation ................................................. 363 385 1,444 1,452
Amortization of Goodwill and Other Intangible Assets<Fb> ..... 110 33 246 108
Research and Development Expense ............................. 478 408 1,617 1,308
Interest and Debt Expense .................................... 202 104 535 520
Purchased In-Process Research and Development<Fc> ............ 2,210 (58) 2,250 1,443
Employee Separation Costs and Write-Down of Assets<Fd> ....... (72) 56 524 633
------- ------ ------- -------
Total .................................................... 8,783 5,271 26,202 23,135
------- ------ ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES,
MINORITY INTERESTS AND EXTRAORDINARY ITEM .................. (1,081) 1,184 1,690 2,613
Provision for Income Tax Expenses ............................ 344 398 1,410 941
Minority Interests in Earnings of Consolidated Subsidiaries .. 11 5 61 24
------- ------ ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEM ......................................... (1,436) 781 219 1,648
DISCONTINUED OPERATIONS<Fe>
Income from Operations of Discontinued Business,
Net of Income Taxes ...................................... - - - 594
Gain on Disposal of Discontinued Business,
Net of Income Taxes ...................................... 16 2,439 7,471 2,439
------- ------ ------- -------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ...................... (1,420) 3,220 7,690 4,681
Extraordinary Charge from Early Extinguishment of Debt,
Net of Income Taxes<Ff> .................................... - - - (201)
------- ------ ------- -------
NET INCOME (LOSS) ............................................ $(1,420) $3,220 $ 7,690 $ 4,480
======= ====== ======= =======
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK<Fg><Fh>
Continuing Operations Before Extraordinary Item ............ $ (1.38) $ .69 $ .19 $ 1.45
Discontinued Operations .................................... .02 2.17 6.89 2.69
Extraordinary Charge ....................................... - - - (.18)
------- ------ ------- -------
Net Income (Loss) .......................................... $ (1.36) $ 2.86 $ 7.08 $ 3.96
======= ====== ======= =======
DILUTED EARNINGS PER SHARE OF COMMON STOCK<Fg><Fh>
Continuing Operations Before Extraordinary Item ............ $ (1.38) $ .68 $ .19 $ 1.43
Discontinued Operations .................................... .02 2.14 6.80 2.65
Extraordinary Charge ....................................... - - - (.18)
------- ------ ------- -------
Net Income (Loss) .......................................... $ (1.36) $ 2.82 $ 6.99 $ 3.90
======= ====== ======= =======
DIVIDENDS PER SHARE OF COMMON STOCK .......................... $ .35 $ .35 $ 1.40 $ 1.365
======= ====== ======= =======
</TABLE>
11
<PAGE>
[FN]
FOOTNOTES TO CONSOLIDATED INCOME STATEMENT
- ------------------------------------------
<Fa> Fourth quarter 1999 includes a $336 gain associated with exchanging the
Company's investment in WebMD for Healtheon/WebMD, an $80 benefit related
to recalculation of interest on federal tax refunds and liabilities, and
a $55 loss related to formation of a 50/50 joint venture for the
polyester films business. In addition, total year 1999 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 of
Herberts was negotiated in German marks.
Fourth quarter 1998 includes a $217 gain on the sale of substantially all
of the Company's interest in CONSOL Energy Inc.
<Fb> 1999 includes amortization expense associated with the March acquisition
of Herberts and the October acquisition of the remaining 80 percent
ownership interest in Pioneer Hi-Bred International. Prior to October 1,
1999, Pioneer's results (including amortization expense associated with
the Company's 20 percent ownership interest) were accounted for under the
equity method and reported as Other Income.
<Fc> Purchased in-process research and development represents the value
assigned in a purchase business combination to research and development
projects of the acquired business that were commenced but not yet com-
pleted at the date of acquisition, for which technological feasibility
has not yet been established and which have no alternative future use in
research and development activities or otherwise.
During the fourth quarter 1999, a charge of $2,186 was recorded in
connection with the purchase of the remaining 80 percent interest in
Pioneer Hi-Bred International based on preliminary allocations of
purchase price. In addition, a fourth quarter charge of $24 was recorded
based on revisions of preliminary purchase price allocations associated
with the purchase of Herberts. Total year 1999 also includes an
estimated charge of $40 that was initially recorded in conjunction with
the purchase of Herberts based on preliminary allocations of purchase
price.
The fourth quarter 1998 net benefit represents adjustments, based on
revision of preliminary purchase price allocations, in conjunction with
1) the purchase of Merck's 50% interest in The DuPont Merck
Pharmaceutical Company (reduction of $70) and 2) the purchase of the ICI
polyester businesses (increase of $12).
Total year 1998 includes $1,230 for DuPont Pharmaceuticals, $153 for the
polyester businesses and $60 to increase, based on revision of prelim-
inary purchase price allocations, the $500 charge taken in the fourth
quarter 1997 in connection with the purchase of Protein Technologies
International.
12
<PAGE>
[FN]
FOOTNOTES TO CONSOLIDATED INCOME STATEMENT - (CONT'D)
- -----------------------------------------------------
<Fd> During the fourth quarter 1999, a net benefit of $72 was recorded to
reflect changes in estimates related to prior periods' restructuring and
divestiture activities.
Total year 1999 includes charges of $596 resulting from the implementa-
tion of restructuring activities within Agriculture & Nutrition, the
Nylon Enterprise and the Polyester Enterprise, partly offset by the $72
fourth quarter changes in estimates as discussed above. The charge for
Agriculture & Nutrition totaled $170 and included termination payments to
about 800 employees, the shutdown of various manufacturing facilities,
and the write-off of an intangible asset resulting from the loss of
exclusive product marketing rights. The Nylon Enterprise charge totaled
$364, of which $252 represents an impairment charge for the write-down of
an adipic acid plant in Singapore that will continue to be operated.
Other costs are principally due to the write-down of manufacturing assets
in India pursuant to a sales agreement and the liquidation of a joint
venture in China. The Polyester Enterprise charge of $62 relates to
employee separation costs for about 850 employees.
Fourth quarter 1998 includes a $56 impairment write-down to fair value of
certain Pharmaceuticals assets. In addition, total year 1998 includes
$391 resulting from the implementation of Company-wide productivity
improvement initiatives ($202 associated with separation costs for over
2,600 employees and $189 in asset write-downs, principally due to
shutdown and dismantlement of excess production capacity) and $186
resulting from restructuring activities within the Nylon Enterprise ($108
associated with separation costs for 1,500 employees and $78 for the
shutdown of related manufacturing facilities).
<Fe> Discontinued Operations:
On September 28, 1998, the Company's Board of Directors approved a plan
to divest the Company's wholly owned petroleum business (Conoco).
Effective October 1, 1998, Conoco's operating results were reported as
part of Gain on Disposal of Discontinued Business. The Company
successfully completed the exchange offer of Conoco Class B common stock
for DuPont common stock on August 6, 1999. The 1999 gain realized by the
Company from the completion of the exchange offer of $7,306 results from
the difference between the market value and the carrying value of the
Conoco Class B common shares, less direct expenses.
<Ff> During 1998, the Company recognized an extraordinary after-tax charge of
$201 ($275 pretax, less taxes of $74), as a result of a debt call and
tender offer with an aggregate principal amount of $1,633.
13
<PAGE>
[FN]
FOOTNOTES TO CONSOLIDATED INCOME STATEMENT - (CONT'D)
- -----------------------------------------------------
<Fg> Earnings per share are calculated on the basis of the following average
number of common shares outstanding:
Three Months Ended Year Ended
December 31 December 31
----------------------------- -----------------------------
Basic Diluted Basic Diluted
------------- ------------- ------------- -------------
1999 1,045,195,827 1,045,195,827 1,084,537,228 1,097,970,329
1998 1,126,504,245 1,139,231,632 1,128,826,525 1,145,347,028
<Fh> Year-to-date earnings per share do not equal the sum of quarterly
earnings per share due to changes in average share calculations.
14
<PAGE>
<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
CONSOLIDATED SEGMENT INFORMATION - Three Months Ended Year Ended
CONTINUING OPERATIONS<Fa><Fb> December 31 December 31
- ---------------------------------------------------------------------------------------------------------------------------
(Dollars in millions) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SEGMENT SALES<Fc>
- -------------
Agriculture & Nutrition ...................................... $ 624 $ 571 $ 2,598 $ 2,791
Nylon Enterprise ............................................. 1,138 1,111 4,487 4,594
Performance Coatings & Polymers .............................. 1,713 1,151 6,111<Fd> 4,563
Pharmaceuticals<Fe> .......................................... 457 380 1,630 1,156
Pigments & Chemicals ......................................... 933 891 3,660 3,659
Pioneer ...................................................... 63 15 422 365
Polyester Enterprise ......................................... 714 640 2,649 2,797
Specialty Fibers ............................................. 876 799 3,448 3,296
Specialty Polymers ........................................... 1,152 1,000 4,255 4,040
Other ........................................................ 126 117 480 542
------- ------ ------- -------
Total Segment Sales ...................................... 7,796 6,675 29,740 27,803
Elimination of Intersegment Transfers ........................ (191) (164) (733) (729)
Elimination of Equity Affiliate Sales ........................ (468) (388) (2,092)<Fd> (2,263)
Miscellaneous ................................................ 3 (24) 3 (44)
------- ------ ------- -------
SALES .................................................... $ 7,140 $6,099 $26,918 <Fd> $24,767
======= ====== ======= =======
AFTER-TAX OPERATING INCOME (LOSS)<Ff><Fg>
- ---------------------------------
Agriculture & Nutrition<Fh> .................................. $ 233 $ 22 $ 358 $ 249
Nylon Enterprise ............................................. 107 90 63 <Fi> 244 <Fj>
Performance Coatings & Polymers .............................. 167 <Fk> 159 582 <Fk> 508
Pharmaceuticals<Fl>........................................... 48 53 230 (668)
Pigments & Chemicals ......................................... 162 149 626 577 <Fm>
Pioneer ...................................................... (2,338)<FN> (21) (2,309)<FN> 8
Polyester Enterprise<Fo> ..................................... (37) (23) (119) (228)
Specialty Fibers ............................................. 194 151 732 659
Specialty Polymers ........................................... 174 133 668 598
Other ........................................................ 6 170<Fp> 51 183 <Fp>
------- ------ ------- -------
Total Segment ATOI ....................................... (1,284) 883 882 2,130
Interest & Exchange Gains and Losses ......................... (70)<Fq> (64) (362)<Fq><Fr> (292)
Corporate Expenses ........................................... (82) (38) (301) (190)
------- ------ ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS ................. $(1,436) $ 781 $ 219 $ 1,648
======= ====== ======= =======
</TABLE>
15
<PAGE>
[FN]
NOTES TO CONSOLIDATED SEGMENT INFORMATION - CONTINUING OPERATIONS
- -----------------------------------------------------------------
<Fa> In September 1997, the Company acquired a 20 percent interest in Pioneer
Hi-Bred International and on October 1, 1999, the company acquired the
remaining 80 percent ownership interest. A new segment has been added to
separately report Pioneer results; amounts previously reported in the
Agriculture & Nutrition segment have been restated.
<Fb> Certain reclassifications of segment data have been made to reflect
changes in organizational structure.
<Fc> Includes pro rata equity affiliate sales and intersegment transfers.
<Fd> Includes minor reclassification of Sales to properly consolidate
intercompany activity for the recently acquired Herberts business.
<Fe> Effective first quarter 1999, revenues from contract manufacturing are
reclassified from Other Income to Sales, and prior periods have been
restated. These revenues are $35 and $119 for fourth quarter and total
year 1999, respectively, versus $23 and $78 for the comparable periods
of 1998. The increase in total year sales reflects the current
100 percent ownership of the pharmaceuticals business versus 50 percent
prior to July 1, 1998.
<Ff> Fourth quarter 1999 includes a net benefit of $47 resulting from changes
in estimates related to prior periods' restructuring and divestiture
activities as follows: Agriculture & Nutrition - $2; Nylon Enterprise -
$11; Performance Coatings & Polymers - $1; Pharmaceuticals - $3; Pigments
& Chemicals - $1; Polyester Enterprise - $10; Specialty Fibers - $1;
Specialty Polymers - $2; and Other - $16.
<Fg> Total year 1998 includes a charge of $256 resulting from a Company-wide
productivity improvement initiative as follows: Agriculture & Nutrition
- $13; Nylon Enterprise - $32; Performance Coatings & Polymers - $17;
Pigments & Chemicals - $40; Polyester Enterprise - $98; Specialty Fibers
- $3; Specialty Polymers - $10; and Other - $43.
<Fh> Fourth quarter 1999 includes a $208 gain associated with exchanging the
Company's investment in WebMD for Healtheon/WebMD. Total year 1999
includes this fourth quarter gain, partly offset by charges of $107
attributable to separation costs for about 800 employees, shutdown of
various manufacturing facilities and the write-off of an intangible asset
resulting from the loss of exclusive product marketing rights.
Total year 1998 includes a charge of $60 to increase the preliminary
allocation of purchase price to purchased in-process research and
development in conjunction with the acquisition of Protein Technologies
International.
16
<PAGE>
[FN]
NOTES TO CONSOLIDATED SEGMENT INFORMATION - CONTINUING OPERATIONS - (CONT'D)
- -----------------------------------------------------------------
<Fi> Includes total charges of $337, of which $247 is attributable to an
impairment charge for the write-down of the adipic acid plant in
Singapore that continues to be operated. Other costs are principally due
to the write-down of manufacturing assets in India pursuant to a sales
agreement and the liquidation of a joint venture in China.
<Fj> In addition to the charge described in Note (g), 1998 also includes
charges within the Nylon Enterprise of $130 attributable to employee
separation costs ($75) and the shutdown of related manufacturing
facilities ($55).
<Fk> Fourth quarter 1999 includes a charge of $24 to increase the preliminary
purchase price allocation to purchased in-process research and
development in conjunction with the acquisition of Herberts. Total year
1999 includes a charge of $64 attributable to purchased in-process
research and development associated with the acquisition of Herberts.
<Fl> Fourth quarter and total year 1999 include a charge of $36 resulting from
finalization of the tax bases related to the assets acquired and
liabilities assumed in connection with the purchase of Merck's 50 percent
interest in The DuPont Merck Pharmaceutical Company.
Fourth quarter 1998 includes a charge of $54 attributable to an
impairment write-down of certain intangible assets held for use by the
Pharmaceuticals segment, net of a benefit of $46 to revise the
preliminary purchase price allocation to purchased in-process research
and development in conjunction with the purchase of Merck's 50% interest.
Total year 1998 includes a charge of $799 related to purchased in-process
research and development associated with the acquisition of Merck's 50
percent interest and the fourth quarter charge of $54 for the impairment
write-down.
<Fm> Includes a $36 gain on the sale of Hydrogen Peroxide assets.
[FN] Fourth quarter and total year 1999 include a net charge of $2,213, of
which $2,186 is an estimated charge to write off the purchase price
allocated to in-process research and development based on preliminary
purchase price allocations in conjunction with the acquisition of the
remaining 80 percent interest in Pioneer.
<Fo> Fourth quarter 1999 includes a charge of $50 resulting from a loss on
formation of a 50/50 global joint venture with Teijin for the polyester
films business. Full year 1999 includes charges of $40 related to
employee separation costs for about 850 employees and $50 related to the
loss discussed above.
17
<PAGE>
[FN]
NOTES TO CONSOLIDATED SEGMENT INFORMATION - CONTINUING OPERATIONS - (CONT'D)
- -----------------------------------------------------------------
Fourth quarter 1998 includes a charge of $14, based on revision of
preliminary purchase price allocations to purchased in-process research
and development, in conjunction with the acquisition of the ICI polyester
businesses. Full year 1998 includes charges of $123 for revisions of the
preliminary allocation of purchase price to purchased in-process research
and development, in conjunction with the acquisition of the ICI polyester
businesses.
<Fp> Fourth quarter and total year 1998 includes a gain of $121 on the sale by
the Company of substantially all of its interest in CONSOL Energy Inc., a
50/50 coal operations joint venture.
<Fq> Includes a benefit of $49 related to recalculation of interest on federal
tax refunds and liabilities.
<Fr> 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 purchase price for Herberts was negotiated in German marks.
18
<PAGE>
<TABLE>
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
SEGMENT SALES VARIANCES
(4TH QUARTER 1999 VS 4TH QUARTER 1998)
- -------------------------------------------------------------------------------------------------------------------------
Sales Percentage Change Due to:
Percent -----------------------------
Change Price Volume Other<Fa>
------- ----- ------ --------
(%) (%) (%) (%)
<S> <C> <C> <C> <C>
Agriculture & Nutrition .............................................. 9 (2) 11
Nylon Enterprise ..................................................... 2 (2) 4
Performance Coatings & Polymers ...................................... 49 (4) 11 42
Pharmaceuticals ...................................................... 20 N/A 20
Pigments & Chemicals ................................................. 5 1 4
Pioneer .............................................................. 320 N/A N/A 320
Polyester Enterprise ................................................. 12 (2) 14
Specialty Fibers ..................................................... 10 (6) 16
Specialty Polymers ................................................... 15 (4) 19
Other ................................................................ 7 N/A N/A 7
<FN>
- ----------------
<Fa> Includes sales increase/(decrease) due to acquisitions and divestitures.
<CAPTION>
CONSOLIDATED SEGMENT INFORMATION
EXCLUDING IMPACT OF NONRECURRING ITEMS - Three Months Ended Year Ended
CONTINUING OPERATIONS December 31 December 31
- ------------------------------------------------------------------------------------------------------------------------
(Dollars in millions) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AFTER-TAX OPERATING INCOME
- --------------------------
Agriculture & Nutrition .............................................. $ 23 $ 22 $ 255 $ 322
Nylon Enterprise ..................................................... 96 90 389 406
Performance Coatings & Polymers ...................................... 190 159 645 525
Pharmaceuticals ...................................................... 81 61 263 185
Pigments & Chemicals ................................................. 161 149 625 581
Pioneer .............................................................. (125) (21) (96) 8
Polyester Enterprise ................................................. 3 (9) (39) (7)
Specialty Fibers ..................................................... 193 151 731 662
Specialty Polymers ................................................... 172 133 666 608
Other ................................................................ (10) 49 35 105
---- ---- ------ ------
Total Segment ATOI ................................................ 784 784 3,474 3,395
Interest & Exchange Gains and Losses ................................. (119) (64) (330) (292)
Corporate Expenses ................................................... (82) (38) (301) (190)
---- ---- ------ ------
INCOME FROM CONTINUING OPERATIONS ................................. $583 $682 $2,843 $2,913
==== ==== ====== ======
</TABLE>
19
