8-K 1 thirdqk.htm 3'04 Q EARNINGS 3: E

 

 






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) October 26, 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

1

 





Item 2.02.     Results of Operations and Financial Condition

                  On October 26, 2004, the Registrant announced its consolidated financial results for the quarter ended September 30, 2004. A copy of the Registrant's earnings news release is furnished on Form 8-K. The information contained in Item 12 of this report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor incorporated by reference in any registration statement filed by the Registrant under the Securities Act of 1933, as amended.














































2

 







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 & Controller


October 26, 2004































3

October 26, 2004

Contact:

Clif Webb

WILMINGTON, Del.

  

302-774-4005
   

r-clifton.webb@usa.dupont.com


DUPONT REPORTS THIRD QUARTER 2004 EARNINGS


Summary

  • Reported net income was $331 million or $.33 per share compared with a loss of $873 million or ($.88) per share in the third quarter 2003.
  • Earnings per share were $.25 before special items, 92 percent higher than the $.13 per share earned last year.
  • Segment pretax operating income (PTOI) before special items was $603 million, up 67 percent compared to the third quarter 2003.
  • Segment sales were $6.4 billion, up 10 percent excluding the impact of portfolio changes, reflecting 4 percent higher U.S. dollar selling prices and 6 percent volume gains.

Earnings Comparisons
($ per share diluted)

           

9 Months

  

9 Months
   

3Q 2004

  

3Q 2003

  

YTD 2004

  

YTD 2003
                 

Reported Net Income

  

$ .33

  

$ (.88)

  

$1.49

  

$ .33

Cumulative Effect of a Change

                

in Accounting Principle

  

-

  

-

  

-

  

(.03)

Special Items*

  

.08

  

(1.01)

  

(.52)

  

(1.01)

Earnings Before Special Items

  

.25

  

.13

  

2.01

  

1.37

*

See Schedules A and B.

            "For the third consecutive quarter, DuPont has achieved strong growth in revenue, earnings and cash despite the sharp rise in energy and raw material costs," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer. "The employees of DuPont delivered solid results, and I am very pleased with the progress we are making."






4

 



Global Consolidated Net Sales and Net Income
            Consolidated net sales were $5.7 billion compared to $6.1 billion in third quarter 2003. Net sales increased from 2 percent higher local selling prices, 6 percent higher volume, and 2 percent currency benefit. Portfolio changes, principally the INVISTA divestiture, net of the consolidation of DuPont Dow Elastomers and the benefit of small acquisitions, reduced net sales by 17 percent. As a result, net sales were down 7 percent.
            Third quarter net income was $331 million, or $.33 per share, compared to a loss of $873 million, or ($.88) per share, in the third quarter of 2003. Operating income improvement was principally due to higher sales volumes and selling prices, partly offset by higher raw material costs.
            Special items totaled a net after-tax benefit of $78 million, or $.08 per share in the third quarter 2004 versus a net after-tax charge of $1,008 million, or ($1.01) per share, last year, as summarized in Schedule B and further detailed in the notes to the financial statements.
            Net income before special items was $253 million compared to $135 million in the third quarter 2003.
Business Segment Performance
            Pretax operating income (PTOI) before special items was $603 million, up 67 percent compared to third quarter 2003. Segment sales, which include transfers and a pro rata share of equity affiliates, were $6.4 billion, up 10 percent excluding portfolio changes. Segment sales increased from 4 percent higher U.S. dollar selling prices and 6 percent higher volume. Portfolio changes reduced sales by 18 percent, leaving third quarter segment sales 8 percent below last year. The table below shows third quarter sales by region and variance analysis versus the prior year.
 

Segment Sales

  

% Change Due To:
 

3Q'04

  

% Change

  

Local

  

Currency

      

Portfolio
 

$B

  

vs. 2003

  

Price

  

Effect

  

Volume

  

Changes*

Worldwide

6.4

  

(8)

  

2

  

2

  

6

  

(18)

U.S.

2.5

  

(18)

  

3

  

0

  

0

  

(21)

Europe

1.8

  

(2)

  

2

  

6

  

4

  

(14)

Asia Pacific

1.3

  

1

  

2

  

2

  

21

  

(24)

Canada & Latin America

0.8

  

4

  

2

  

1

  

8

  

(7)

*

Includes a reduction in Textiles & Interiors segment sales due to the INVISTA divestiture (April 30), the additional sales resulting from fully consolidating DuPont Dow Elastomers (DDE), and additional sales from acquisitions.




5

 



  • Local currency selling prices continue to show improvement versus prior year, up 2 percent, reflecting the third consecutive quarter of pricing momentum.
  • Worldwide volume increased 6 percent led by the Asia Pacific region, up 21 percent, and Canada & Latin America, up 8 percent.

            The table below presents year-over-year sales analysis for the five core segments of DuPont. This provides insight into the performance of DuPont, excluding INVISTA, which was divested in the second quarter.
   

Three Months Ended

  

Percentage Change Due to

Segment Sales

  

September 30

  

U.S.$

      

Portfolio

(Dollars in millions)

  

$

  

% Chg.

  

Price

  

Volume

  

Changes

Agriculture & Nutrition

  

$ 969

  

21%

  

7

  

11

  

3

Coatings & Color Technologies

 

1,476

  

7

  

6

  

1

  

-

Electronic & Communication Technologies

  

815

  

12

  

5

  

7

  

-

Performance Materials

  

1,672

  

29

  

4

  

13

  

12

Safety & Protection

  

1,185

  

19

  

9

  

8

  

2
                     

Total Core Segments

  

6,117

  

17%

  

6

  

7

  

4
                     

Textiles & Interiors

  

286

  

(84)

            

Other

  

12

                

Total

$6,415

(8)%

4

6

(18)
  • Sales in the five core segments increased 17 percent -- reflecting 7 percent volume growth, 6 percent higher U.S. dollar prices, and 4 percent increase from portfolio changes, principally from the consolidation of DuPont Dow Elastomers.
  • Four of the five core segments had double-digit revenue increases, driven by strong volume growth and improved pricing.

          Detailed information on segment performance is provided in Schedules C, D, and E which show sales variance analyses, segment PTOI as reported, and segment PTOI excluding the impact of special items. The company encourages investors to review these schedules. Additional segment information is available in the earnings data section of the DuPont Investor Center on dupont.com.
Outlook
          The company has noted that leading global economic indicators, especially those in industrial production, are showing signs of slowing growth rates in response to the sharp increase in energy-related costs during the third quarter. DuPont anticipates that these conditions will continue for the remainder of the year. Despite this likely scenario and the impact it may have on raw material costs and customer demand, the company is reaffirming its previous full-year earnings outlook of $2.25 - $2.35 per share, excluding the impact of special items listed in Schedule B.

6

 



          "Our company is committed to executing our strategies. We are putting our science to work, going where growth is, and leveraging our ability to deliver superior shareholder value to our owners," Holliday said.
Use of Non-GAAP Measures
          Management believes that earnings before special items, a "non-GAAP" measure, is meaningful to investors because it provides insight with respect to ongoing operating results of the company. Special items represent significant charges or credits that are important to an understanding of the company's ongoing operations. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of non-GAAP measures to GAAP is provided in Schedule G.
          DuPont is a science company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for the people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation and protective apparel.

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 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 documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, 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, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales of agricultural products.


# # #

10/26/04



7

 

 


E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE A
 

Three Months Ended

  

Nine Months Ended

CONSOLIDATED INCOME STATEMENT

September 30,

  

September 30,

(Dollars in millions, except per share)

2004

  

2003

  

2004

  

2003
               

NET SALES

$5,740

  

$ 6,142

  

$21,340

  

$20,519

Other Income(a)

287

  

219

  

624

  

543
               

Total

6,027

  

6,361

  

21,964

  

21,062
               

Cost of Goods Sold and Other Operating Charges(b)

4,567

  

4,995

  

15,779

  

15,549

Selling, General and Administrative Expenses

681

  

726

  

2,329

  

2,277

Amortization of Intangible Assets

58

  

61

  

168

  

178

Research and Development Expense

308

  

340

  

978

  

1,012

Interest Expense

86

  

90

  

252

  

258

Employee Separation Costs and Asset Impairment Charges(c)

-

  

-

  

433

  

-

Separation Charges - Textiles & Interiors(d)

102

  

1,314

  

630

  

1,314

Goodwill Impairment - Textiles & Interiors(e)

-

  

291

  

-

  

291

Gain on Sale of Interest by Subsidiary - Non-operating(f)

-

  

-

  

-

  

(62)
               

Total

5,802

  

7,817

  

20,569

  

20,817
               

INCOME (LOSS) BEFORE INCOME TAXES AND

              

MINORITY INTERESTS

225

  

(1,456)

  

1,395

  

245

Benefit from Income Taxes(g)

(117)

  

(586)

  

(114)

  

(187)

Minority Interests in Earnings of Consolidated Subsidiaries(h)

11

  

3

  

7

  

66
               

INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF A

             

CHANGE IN ACCOUNTING PRINCIPLE

331

  

(873)

  

1,502

  

366

Cumulative Effect of a Change in Accounting Principle,

              

Net of Income Taxes(i)

-

  

-

  

-

  

(29)
               

NET INCOME (LOSS)

$ 331

  

$ (873)

  

$ 1,502

  

$ 337
               

BASIC EARNINGS (LOSS) PER SHARE OF COMMON

             

STOCK(j)(k)

              

Income (Loss) before Cumulative Effect of a Change in

              

Accounting Principle

$ .33

  

$ (.88)

  

$ 1.50

  

$ .36

Cumulative Effect of a Change in Accounting Principle

-

  

-

  

-

  

(.03)
               

Net Income (Loss)

$ .33

  

$ (.88)

  

$ 1.50

  

$ .33
               

DILUTED EARNINGS (LOSS) PER SHARE OF COMMON

             

STOCK(j)(k)

              

Income (Loss) before Cumulative Effect of a Change in

              

Accounting Principle

$ .33

  

$ (.88)

  

$ 1.49

  

$ .36

Cumulative Effect of a Change in Accounting Principle

-

  

-

  

-

  

(.03)
               

Net Income (Loss)

$ .33

  

$ (.88)

  

$ 1.49

  

$ .33
             

DIVIDENDS PER SHARE OF COMMON STOCK

$ .35

  

$ .35

  

$ 1.05

  

$ 1.05

 

8

 


FOOTNOTES TO CONSOLIDATED INCOME STATEMENT

(a)

Year-to-date 2004 includes a charge of $150 in the Performance Materials segment to provide for the company's share of anticipated losses associated with DuPont Dow Elastomers LLC antitrust litigation matters.
   
 

Third quarter 2003 includes a $23 benefit resulting from a favorable arbitration ruling in the Pharmaceuticals segment. Year-to-date 2003 also includes an exchange gain of $30 resulting from a currency contract purchased to offset movement in the Canadian dollar in connection with the company's acquisition of minority shareholders' interest in DuPont Canada, and a benefit of $16 in the Textiles & Interiors segment from the favorable settlement of arbitration related to the Unifi Alliance.
   

(b)

Third quarter 2004 includes a charge of $63 in the Electronic & Communication Technologies segment associated with the proposed settlement of the PFOA class action litigation in West Virginia. Year-to-date 2004 also includes a charge of $45 to establish the PFOA class action litigation reserve, as well as a charge of $36 in the Coatings & Color Technologies segment to provide for the settlement of litigation in Refinish.
   
 

Third quarter 2003 includes a $25 benefit in the Other segment from insurance proceeds related to the settled 1995 BenlateÒ class action suit. Year-to-date 2003 includes a charge of $78 related to this case, partly offset by the $25 in insurance proceeds.
   

(c)

Year-to-date 2004 includes charges of $312 to sever approximately 2,700 employees in the following segments: Agriculture & Nutrition - $36; Coatings & Color Technologies - $64; Electronic & Communication Technologies - $42; Performance Materials - $45; Safety & Protection - $29; and Other - $96. Year-to-date 2004 also includes charges of $42 related to the impairment of certain European manufacturing assets in the Safety & Protection segment; $23 related to the shutdown of manufacturing assets at a U.S. facility in the Performance Materials segment; $29 to write off abandoned technology in the Other segment; and $27 to reflect a decline in the value of an investment security in the Electronic & Communication Technologies segment.
   

(d)

Third quarter 2004 includes charges of $61 related to the separation of INVISTA and $41 related to the write-down of an equity affiliate to fair market value. Year-to-date 2004 includes an additional charge of $528, consisting of $183 due primarily to an increase in the book value of net assets sold and additional separation costs, and $345 related to an agreed upon reduction in sales price, and other changes in estimates associated with the sale.
   
 

Third quarter 2003 reflects INVISTA-related impairment charges of $1,236 to write down to estimated fair market value various manufacturing and other intangible assets held for sale, as well as investments in certain joint ventures, and $78 to record pension curtailment losses associated with the anticipated separation.
   

(e)

Third quarter 2003 reflects a charge of $291 to write off goodwill associated with INVISTA.
   

(f)

Year-to-date 2003 includes a $62 non-operating gain in the Agriculture & Nutrition segment associated with the formation of a majority-owned venture, The Solae Company, with Bunge Limited.
   

(g)

Third quarter 2004 includes tax benefits of $165 primarily related to agreement on certain prior year audit issues previously reserved. Year-to-date 2004 also reflects a $137 benefit associated with recording an increase in deferred tax assets in two European subsidiaries for their tax basis investment losses recognized on local tax returns, and additional INVISTA-related tax benefits of $322.
   
 

Third quarter 2003 includes tax benefits of $566 related to the anticipated separation of INVISTA.



9

 


FOOTNOTES TO CONSOLIDATED INCOME STATEMENT - (CONT'D)

(h)

Year-to-date 2004 reflects a minority interest adjustment related to accounting for the company's consolidation of DuPont Dow Elastomers LLC as a variable interest entity.
   
 

Year-to-date 2003 includes a charge of $17 for the early extinguishment of the company's Minority Interest Structures in preparation for the planned separation of INVISTA.
   

(i)

The company's adoption of SFAS No. 143, "Accounting for Asset Retirement Obligations," resulted in a cumulative effect adjustment to income of $29 effective January 1, 2003.
   

(j)

Earnings per share are calculated on the basis of the following average number of common shares outstanding:

 

Three Months Ended

  

Nine Months Ended
 

September 30

  

September 30
 

Basic

  

Diluted

  

Basic

  

Diluted

2004

997,128,284

  

1,001,238,379

  

998,970,044

  

1,003,464,374

2003

997,028,781

  

997,028,781

  

996,470,591

  

999,745,743

(k)

Year-to-date earnings per share do not equal the sum of quarterly earnings per share due to changes in average share calculations.


































10

 







E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE B

SPECIAL ITEMS(1)
(Dollars in millions, except per share)
   

Pretax

  

After-Tax

  

($ Per Share)
   

2004

  

2003

  

2004

  

2003

  

2004

  

2003
                         

1st Quarter - Total

  

$ (531)

  

$ (78)

  

$(296)

  

$ (51)

  

$(.30)

  

$ (.05)
                         

2nd Quarter - Total

  

$ (661)

  

$ 108

  

$(302)

  

$ 52

  

$(.30)

  

$ .05
                         

3rd Quarter:

                        

Textiles & Interiors-Related Items:

 		                       

Separation Charges

 		 

$ (61)

  

$(1,605)

  

$ (62)

  

$(1,039)

  

$(.06)

  

$(1.04)

Deferred Tax Benefits

 		 

-

      

13

      

.01

    

Equity Affiliate Impairment

 		 

(41)

      

(32)

      

(.03)

    

Total

 		 

(102)

      

(81)

      

(.08)

    
                         

PFOA Litigation Reserve

 		 

(63)

      

(41)

      

(.04)

    
                         

Insurance Proceeds - BenlateÒ

     

25

      

16

      

.02
                         

Pharma Arbitration Ruling

 		     

23

      

15

      

.01
                         

Corporate Tax-Related Items

 		 

35(2)

      

200

      

.20

    
                         

3rd Quarter - Total

  

$ (130)

  

$(1,557)

  

$ 78

  

$(1,008)

  

$ .08

  

$(1.01)
                         

3rd Quarter YTD

  

$(1,322)

  

$(1,527)

  

$(520)

  

$(1,007)

  

$(.52)

  

$(1.01)



(1)

See Notes to Consolidated Income Statement for additional details.

(2)

Reported as Other Income on the Consolidated Income Statement.














11

 



E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE C
 

Three Months Ended

  

Nine Months Ended

CONSOLIDATED SEGMENT INFORMATION(1)

September 30,

  

September 30,

(Dollars in millions)

2004

  

2003

  

2004

  

2003

SEGMENT SALES(2)

              

Agriculture & Nutrition

$ 969

  

$ 803

  

$ 5,248

  

$ 4,479

Coatings & Color Technologies

1,476

  

1,378

  

4,453

  

4,066

Electronic & Communication Technologies

815

  

728

  

2,476

  

2,142

Performance Materials

1,672

  

1,299

  

4,894

  

3,989

Safety & Protection

1,185

  

999

  

3,441

  

3,047

Textiles & Interiors

286

  

1,744

  

2,995

  

5,240

Other

12

  

4

  

37

  

9

Total Segment Sales

6,415

  

6,955

  

23,544

  

$22,972

Elimination of Transfers

(75)

  

(233)

  

(483)

  

(706)

Elimination of Equity Affiliate Sales

(600)

  

(580)

  

(1,721)

  

(1,747)

CONSOLIDATED NET SALES

$5,740

  

$ 6,142

  

$21,340

  

$20,519

PRE-TAX OPERATING INCOME

             

     (LOSS) (PTOI)(3)                       

              

Agriculture & Nutrition(c)(f)

$ (184)

  

$ (214)

  

$ 892

  

$ 805

Coatings & Color Technologies(b)(c)

179

  

178

  

482

  

533

Electronic & Communication Technologies(b)(c)

34

  

36

  

99

  

117

Performance Materials(a)(c)

160

  

79

  

269

  

332

Pharmaceuticals(a)

173

  

160

  

495

  

401

Safety & Protection(c)

217

  

180

  

612

  

606

Textiles & Interiors(a)(d)(e)

(116)

  

(1,628)

  

(479)

  

(1,598)

Other(b)(c)

(25)

  

13

  

(231)

  

(154)

Total Segment PTOI

438

  

(1,196)

  

2,139

  

1,042

Exchange Gains and Losses(a)

(22)

  

(11)

  

(111)

  

(103)

Corporate Expenses & Interest

(191)

  

(249)

  

(633)

  

(694)

INCOME (LOSS) BEFORE INCOME TAXES

AND MINORITY INTERESTS

$ 225

$(1,456)

$ 1,395

$ 245



(1)

Certain reclassifications of segment data have been made to reflect changes in organizational structure.

(2)

Includes transfers and pro rata share of equity affiliate sales.

(3)

See respective Notes to Consolidated Income Statement for segment specific details.










12

E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE D

SEGMENT SALES(1)

3rd QUARTER 2004 VS. 3rd QUARTER 2003
(Dollars in millions)
   

Three Months Ended

  

Percentage Change Due to
   

September 30

  

U.S.$

        
   

$

  

% Chg.

  

Price

  

Volume

  

Other(2)

Agriculture & Nutrition

  

$ 969

  

21%

  

7%

  

11%

  

3%

Coatings & Color Technologies

 

1,476

  

7

  

6

  

1

  

-

Electronic & Communication Technologies

  

815

  

12

  

5

  

7

  

-

Performance Materials

  

1,672

  

29

  

4

  

13

  

12

Safety & Protection

  

1,185

  

19

  

9

  

8

  

2
                     

Total Core Segments

  

6,117

  

17%

  

6%

  

7%

  

4%
                     

Textiles & Interiors(3)

  

286

  

(84)

            

Other

  

12

                

Total Segments

$6,415

(8)%

4%

6%

(18)%

(1)

Includes transfers and pro rata share of equity affiliate sales.

(2)

Includes changes in sales related to the INVISTA divestiture, the impact of fully consolidating DDE beginning in the second quarter 2004, and additional sales from acquisitions.

(3)

Reduction in sales reflects the divestiture of INVISTA on April 30. Sales in the third quarter 2003 were $1,744.

 

SCHEDULE E

SEGMENT INFORMATION EXCLUDING IMPACT OF SPECIAL ITEMS
(Dollars in millions)
   

Three Months Ended

  

Nine Months Ended
   

September 30

  

September 30
   

2004

  

2003

  

% Chg.

  

2004

  

2003

  

% Chg.

PRETAX OPERATING INCOME (LOSS)

                        

Agriculture & Nutrition

  

$(184)

  

$ (214)

  

N/M

  

$ 928

  

$ 743

  

25%

Coatings & Color Technologies

  

179

  

178

  

1%

  

582

  

533

  

9

Electronic & Communication

                       

Technologies

 		 

97

  

36

  

169

  

276

  

117

  

136

Performance Materials

  

160

  

79

  

103

  

487

  

332

  

47

Pharmaceuticals

  

173

  

137

  

26

  

495

  

378

  

31

Safety & Protection

  

217

  

180

  

21

  

683

  

606

  

13

Textiles & Interiors

  

(14)

  

(23)

  

N/M

  

151

  

(9)

  

N/M

Other

  

(25)

  

(12)

  

N/M

  

(106)

  

(101)

  

N/M

Total Segment PTOI

 		 

603

  

361

  

67

  

3,496

  

2,599

  

35

Exchange Gains and Losses

  

(22)

  

(11)

      

(111)

  

(133)

    

Corporate Expenses & Interest

  

(226)

  

(249)

      

(668)

  

(694)

    

INCOME BEFORE SPECIAL ITEMS,

 		                       

INCOME TAXES AND MINORITY

                       

INTERESTS

 		 

355

  

101

  

251

  

2,717

  

1,772

  

53

Special Items

 

(130)

  

(1,557)

      

(1,322)

  

(1,527)

    

INCOME (LOSS) BEFORE INCOME

                       

TAXES AND MINORITY

 		                       

INTERESTS

 		 

$ 225

  

$(1,456)

  

N/M

  

$ 1,395

  

$ 245

  

469%

 

13

 



E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE F

FINANCIAL SUMMARY
(Dollars in millions, except per share)

3rd Quarter 2004

YTD 2004
   

Versus

  

Versus
   

3rd Quarter 2003

  

YTD 2003
         

Variance Analysis: Income

        

Before Cumulative Effect of a

        

Change in Accounting Principle

        

Local Prices

  

$ 115

  

$ 190

Volume

  

90

  

335

Variable Costs

  

(95)

  

(290)

Fixed Costs

  

(15)

  

95

Currency

  

25

  

165

Tax Rate

 

(50)

  

40

Portfolio Changes and Other

        

(principally Pharmaceuticals)

 		 

48

  

114
         

Total Before Special Items

  

118

  

649
         

Special Items

  

1,086

  

487
         

Total

  

$1,204

  

$1,136



   

Three Months Ended

  

Nine Months Ended
   

September 30

  

September 30
   

2004

  

2003

  

% Chg.

  

2004

  

2003

  

% Chg.

Selected Income Statement Data -

                        

Excluding Impact of Special Items

                        

And Cumulative Effect of a

                       

Change In Accounting Principle

                        
                         

Consolidated Net Sales

  

$5,740

  

$6,142

  

(7)%

  

$21,340

  

$20,519

  

4%

Segment Sales

  

6,415

  

6,955

  

(8)

  

23,544

  

22,972

  

2

Segment PTOI*

  

603

  

361

  

67

  

3,496

  

2,599

  

35

EBIT*

  

411

  

177

  

132

  

2,915

  

1,963

  

48

EBITDA*

  

749

  

589

  

27

  

3,889

  

3,133

  

24

Income Before Income Taxes and

                        

Minority Interests

  

355

  

101

  

251

  

2,717

  

1,772

  

53

EPS - Diluted

  

0.25

  

0.13

  

92

  

2.01

  

1.37

  

47

*

See Reconciliation of Non-GAAP Measures (Schedule G).






14

 




E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE G

RECONCILIATION OF NON-GAAP MEASURES
(Dollars in millions)

                 

Reconciliation of Segment PTOI

            
   

Three Months Ended

  

Nine Months Ended
   

September 30,

  

September 30,
   

2004

  

2003

  

2004

  

2003
                 

Segment PTOI Excluding Special Items

  

$ 603

  

$ 361

  

$ 3,496

  

$ 2,599

Special Items included in Segment PTOI

  

(165)

  

(1,557)

  

(1,357)

  

(1,557)
                 

Segment PTOI

  

$ 438

  

$(1,196)

  

$ 2,139

  

$ 1,042

 

Reconciliation of EBIT / EBITDA to Consolidated Income Statement
                 
   

Three Months Ended

  

Nine Months Ended
   

September 30,

  

September 30,
   

2004

  

2003

  

2004

  

2003
                 

Income (Loss) Before Income Taxes and

               

Minority Interests

  

$225

  

$(1,456)

  

$1,395

  

$ 245
                 

Less: Minority Interest in Earnings

               

of Consolidated Subsidiaries(1)

 		 

(15)

  

(7)

  

(12)

  

(40)

Add: Net Interest Expense(2)

  

71

  

83

  

210

  

231

Special Items

 		 

130

  

1,557

  

1,322

  

1,527
                 

EBIT

  

411

  

177

  

2,915

  

1,963
                 

Add: Depreciation and Amortization(3)

  

338

  

412

  

974

  

1,170
                 

EBITDA

  

749

  

589

  

3,889

  

3,133

 

(1)

Excludes income taxes and corporate minority interests.

(2)

Includes interest expense plus amortization of capitalized interest less interest income.

(3)

Excludes amortization of capitalized interest.














15

 




E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE G - (Cont'd)

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
         
   

Three Months Ended

  

Nine Months Ended
   

September 30,

  

September 30,
   

2004

  

2003

  

2004

  

2003
                 

Income (Loss) Before Income Taxes and

               

Minority Interests

  

$ 225

  

$(1,456)

  

$1,395

  

$ 245
                 

Remove: Special Items - Charge

 

130

  

1,557

  

1,322

  

1,557
                 

Net Exchange Losses

 		 

22

  

11

  

111

  

103(1)
                 

Income Before Income Taxes,

               

Special Items, Exchange Losses

                

and Minority Interests

  

$ 377

  

$ 112

  

$2,828

  

$1,905
                 

Benefit from Income Taxes

  

$(117)

  

$ (586)

  

$ (114)

  

$ (187)
                 

Remove: Tax on Special Items

  

208

  

549

  

802

  

549
                 

Tax on Exchange Losses

 		 

27

  

12

  

45

  

106
                 

Provision for (benefit from) Income Taxes,

               

Excluding Taxes on Special Items and

                

Exchange Losses

  

$ 118

  

$ (25)

  

$ 733

  

$ 468
                 

Effective Income Tax Rate

  

(52.2)%

  

40.2%

  

(8.2)%

  

(76.3)%
                 

Base Income Tax Rate

  

31.2%

  

(22.4)%

  

25.9%

  

24.6%

 

(1)

Includes Special Item attributable to exchange gain of $30.



















16