8-K 1 mayeightk.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





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) May 5, 2004 (April 30, 2004)


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 2. Acquisition or Disposition of Assets

              On April 30, 2004, E. I. du Pont de Nemours and Company (the "company") completed the sale of substantially all of the assets of the company's Textiles & Interiors segment ("INVISTA") to subsidiaries of Koch Industries Inc. ("Koch") for $3.828 billion and the assumption of approximately $272 million of the company's debt. Except for three equity affiliates, this transaction was completed on April 30, 2004. The transfer of three equity affiliates will be delayed until the company receives approval from its equity partners, which is expected in the second half of the year. Upon transfer of these equity affiliates, the company expects to realize a gain of approximately $77 million. If these equity affiliates were not to be transferred, it could reduce the expected gain and final cash proceeds reflected in the purchase price above by up to $77 million and $168 million, respectively. Final proceeds are subject to adjustments to reflect closing balances for working capital and consolidated debt levels. The pro forma financial information included herein assumes the transfer of these equity affiliates will be successfully completed as expected, and is based on terms set forth in the definitive purchase and sales agreement with Koch.

               In connection with the sale, the company indemnified Koch against certain liabilities primarily related to taxes, legal matters, environmental matters and other representations and warranties. The estimated fair value of these obligations is $75 million

Item 7. Financial Statements and Exhibits

(b)

Pro Forma Financial Information

   
 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

 

FINANCIAL STATEMENTS

   
 

The accompanying unaudited pro forma condensed consolidated balance sheet as of December 31, 2003 gives effect to this sale as if this transaction had occurred as of that date.

   
 

The accompanying unaudited pro forma condensed consolidated income statement for the year ended December 31, 2003 gives effect to the sale as if this transaction had occurred on January 1, 2003. The December 31, 2003 pro forma income statement has not been adjusted to exclude the separation charges and related goodwill impairment charges which were reflected in the historical financial statements as of December 31, 2003.

   
 

The unaudited pro forma condensed financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of the company, or of the financial position or results of operations of the company that would have actually occurred had the transaction been in effect as of the date or for the period presented. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements and related notes of the company.









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Financial Statements and Exhibits:

     
 

(1)

E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated Income Statement (unaudited) for the year ended December 31, 2003.

     
 

(2)

E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated Balance Sheet (unaudited) as of December 31, 2003.

     
 

(3)

Notes to the unaudited E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated Financial Statements.









































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Exhibit 1

 

E. I. DU PONT DE NEMOURS AND COMPANY
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

(dollars in millions, except per share)

Year ended December 31, 2003

   

E. I. du Pont

           
   

de Nemours

     

Other

   
   

and Company

 

INVISTA(a)

 

Adjustments

 

Pro Forma

                 

Net Sales

 

$26,996

 

$5,677

 

$110(b)

 

$21,429

Other income

 

734

 

49

     

685

                 

Total

 

27,730

 

5,726

     

22,114

                 

Cost of goods sold and other operating charges

 

19,476

 

4,844

 

70(b)

 

14,702

Selling, general and administrative expenses

 

2,995

 

370

     

2,625

Depreciation

 

1,355

 

333

     

1,022

Amortization of goodwill and other intangible

               

assets

 

229

 

11

     

218

Research and development expense

 

1,349

 

141

     

1,208

Interest expense

 

347

 

1

     

346

Restructuring and asset impairment charges

 

(17)

 

(7)

   

(10)

Separation charges - Textiles & Interiors

 

1,620

 

-

     

1,620

Goodwill impairment - Textiles & Interiors

 

295

 

-

     

295

Gain on sale of interest by subsidiary -

               

non-operating

(62)

 

-

     

(62)

                 

Total

 

27,587

 

5,693

     

21,964

                 

Income before income taxes and minority interest

 

143

 

33

 

40

 

150

       

       

Provision for (benefit from) income taxes

 

(930)

 

45

 

14(c)

 

(961)

Minority interests in earnings of consolidated

               

subsidiaries

 

71

 

25

     

46

                 

Pro forma net income (loss)

 

$ 1,002

 

$ (37)

 

26

 

$ 1,065

                 

Basic pro forma net income per share

 

$ 1.00

         

$ 1.06

                 

Weighted average shares outstanding

 

996,717,845

         

996,717,845

                 

Diluted pro forma net income per share

 

$ 0.99

         

$ 1.05

                 

Weighted average shares and share equivalents

 

1,000,010,193

         

1,000,010,193


See notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.













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Exhibit 2

E. I. DU PONT DE NEMOURS AND COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

(dollars in millions, except per share)

December 31, 2003

   

E. I. du Pont

           
   

de Nemours

     

Other

   
   

and Company

 

INVISTA(d)

 

Adjustments

 

Pro Forma

Assets

Current Assets

               

Cash and cash equivalents

 

$ 3,298

     

$3,828(e)

 

$ 7,126

Accounts and notes receivable, net

 

4,218

         

4,218

Inventories

 

4,107

         

4,107

Prepaid expenses

 

208

         

208

Income taxes

 

1,141

     

4(f)

 

1,145

Assets held for sale

 

5,490

 

$5,390

     

100(g)

Total current assets

 

18,462

         

16,904

Property, plant and equipment (net of

               

accumulated depreciation)

 

9,892

         

9,892

Goodwill

 

1,939

         

1,939

Other intangible assets

 

2,986

         

2,986

Investment in affiliates

 

1,304

         

1,304

Other assets

 

2,456

         

2,456

Total

 

$37,039

         

$35,481

                 

Liabilities and Stockholders' Equity

Current Liabilities

               

Accounts payable

 

$ 2,412

         

$ 2,412

Short-term borrowings and capital lease

               

obligations

 

5,914

         

5,914

Income taxes

 

60

         

60

Other accrued liabilities

 

2,963

         

2,963

Liabilities held for sale

 

1,694

 

$1,694

     

-

Total current liabilities

 

13,043

         

11,349

Long-term borrowings and capital lease

               

obligations

 

4,301

         

4,301

Other liabilities

 

8,909

     

75(h)

 

9,052

           

68(i)

   

Deferred income taxes

 

508

         

508

Total liabilities

 

26,761

         

25,210

Minority interests

 

497

         

497

Commitments and Contingent Liabilities

               

Stockholders' Equity

               

Preferred stock, without par value - cumulative

 

237

         

237

Common stock, $.30 par value

 

325

         

325

Additional paid-in capital

 

7,522

         

7,522

Reinvested earnings

 

10,185

     

(7)(f)

 

10,178

Accumulated other comprehensive loss

 

(1,761)

         

(1,761)

Common stock held in treasury, at cost

 

(6,727)

         

(6,727)

Total stockholders' equity

 

9,781

         

9,774

Total

 

$37,039

         

$35,481

                 

See notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.


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Exhibit 3

 

Notes to the Unaudited E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated
Financial Statements

(a)

The "INVISTA" column in the Unaudited E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated Income Statement for the year ended December 31, 2003 represents the elimination of the results of the businesses sold to Koch as if the dispositions had occurred as of January 1, 2003. Provision for income taxes reflects a mix of income and losses between tax jurisdictions with different statutory tax rates.

   

(b)

To include sales (and related cost of goods sold) made by the company to the businesses sold to Koch that were previously eliminated in the company's consolidated historical results.

   

(c)

Represents adjustment (b) tax effected at the applicable statutory rates.

   

(d)

The "INVISTA" column in the Unaudited E. I. du Pont de Nemours and Company Pro Forma Condensed Consolidated Balance Sheet represents the elimination of the assets and liabilities sold as determined as of December 31, 2003. Details of these assets and liabilities can be found in Note 5 to the Consolidated Financial Statements for December 31, 2003, as reported in the company's Annual Report on Form 10-K for 2003.

   

(e)

To increase cash and cash equivalents by the receipt of proceeds related to the sale of certain assets and liabilities to Koch.

   

(f)

To reflect the impact on reinvested earnings and related deferred taxes at 35 percent for changes in the cash proceeds and the fair value of indemnifications since December 31, 2003.

   

(g)

Represents the net book value of certain assets of the Textiles & Interiors segment which the company plans to sell.

   

(h)

Reflects estimated fair value of certain indemnity obligations made by the company to Koch.

   

(i)

To reflect the assumption of liabilities by the company effective with the sale of certain Canadian assets to Koch.

















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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

Vice President and Controller


May 5, 2004




























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