11-K 1 d11k.txt FORM 11-K QUALICON ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 QUALICON RETIREMENT AND SAVINGS PLAN (FULL TITLE OF THE PLAN) E. I. DU PONT DE NEMOURS AND COMPANY 1007 MARKET STREET WILMINGTON, DELAWARE 19898 (NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER) ================================================================================ SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Administrative Committee formed under the Qualicon Retirement and Savings Plan has duly caused this Annual Report to be signed by the undersigned hereunto duly authorized. QUALICON RETIREMENT AND SAVINGS PLAN Dated: June 28, 2001 By: /s/ Helen S. Wagner ----------------------- Helen S. Wagner Director of Finance and Chief Financial Member of the Administrative Committee formed under the Qualicon Retirement and Savings Plan Qualicon Retirement and Savings Plan Index to Financial Statements and Supplemental Schedule --------------------------------------------------------------------------------
Page(s) Report of Independent Accountants 1 Financial Statements Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 2 Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2000 and 1999 3 Notes to Financial Statements 4 - 10 Supplemental Schedule* Schedule I: Schedule of Assets (Held at End of Year) 11
* Other supplemental schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. Report of Independent Accountants To the Administrator and Participants of the Qualicon Retirement and Savings Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Qualicon Retirement and Savings Plan (the "Plan") at December 31, 2000 and 1999, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP Philadelphia, PA June 8, 2001 Qualicon Retirement and Savings Plan Statements of Net Assets Available for Benefits December 31, 2000 and 1999 -------------------------------------------------------------------------------- 2000 1999 Assets: Investments: Plan interest in DuPont and Related Companies Defined Contribution Plan Master Trust $ 98,753 $ 39,203 Company stock funds 166,269 149,835 Mutual Funds 701,842 408,216 Common/collective funds 96,551 71,586 Participant Loans 61,022 24,759 ------------- ----------- Total investments 1,124,437 693,599 Receivables: Participants' contributions 23,545 24,416 Employer's contributions 7,971 7,592 Investment income 184 98 ------------- ----------- Total receivables 31,700 32,106 ------------- ----------- Net assets available for benefits $ 1,156,137 $ 725,705 ============= ===========
The accompanying notes are an integral part of these financial statements. -2- Qualicon Retirement and Savings Plan Statements of Changes in Net Assets Available for Benefits For the Years Ended December 31, 2000 and 1999 -------------------------------------------------------------------------------- 2000 1999 Additions: Investment income: Net (depreciation) appreciation in fair value of investments $ (178,486) $ 79,464 Interest and dividend income 57,569 23,271 ----------- ---------- (120,917) 102,735 ----------- ---------- Contributions: Participant 452,093 333,081 Employer 103,170 83,483 ----------- ---------- 555,263 416,564 ----------- ---------- Total additions 434,346 519,299 Deductions: Benefits paid to participants 3,914 11,855 ----------- ---------- Net increase 430,432 507,444 Net assets available for benefits: Beginning of year 725,705 218,261 ----------- ---------- End of year $ 1,156,137 $ 725,705 =========== ==========
The accompanying notes are an integral part of these financial statements. -3- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- 1. Description of the Plan The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering substantially all employees of Qualicon (the "Company"), a wholly-owned subsidiary of E. I. du Pont de Nemours and Company ("DuPont"). The Plan is subject to the Employee Retirement Income Security Act of 1974 ("ERISA") and is supervised, administered, and interpreted by an administrative committee (the "Committee"). The Committee is comprised of the Vice President - Finance and Chief Financial Officer, the Vice President -Operations and Chief Technology Officer and such other individuals as the above-mentioned officers shall appoint, who may be, but need not be, employees of the Company. The designated trustee of the Plan is Merrill Lynch Trust Company of America ("Merrill Lynch"). Contributions Participants authorize payroll deductions which are contributed to the Plan and credited to their individual accounts. The sum of the participant contributions both pre-tax and post-tax are limited to a maximum of 16% of a participant's earnings, as defined, in multiples of 1% and are credited to the Plan on a monthly basis in accordance with the payroll cycle of the Company. Participants may also contribute amounts representing rollovers from other eligible retirement plans. Contributions are subject to certain limitations. The Company makes matching contributions on a monthly basis in the amount of 50% of all participant contributions up to 6% of the participant's earnings, as defined. Company contributions are invested in accordance with the participant's investment elections. The Company, at its discretion, may also make an additional discretionary contribution. The Company did not make any discretionary contributions during the years ended December 31, 2000 and 1999. Participant Accounts Each participant's account is credited with the participant's contributions and allocations of the Company's contributions and Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Eligibility and Vesting Employees are eligible to participate in the Plan on the first day of their first full month of employment with the Company. Employees who join the Company from DuPont are immediately eligible to participate in the Plan. Participants are always 100% vested in their contributions and the employer's matching contribution plus actual earnings thereon. -4- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- Participant Loans Participants may borrow from their accounts, a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan transactions are treated as a transfer to/(from) the investment fund from/(to) the Participant Loan Fund. Loan terms shall not exceed 5 years, unless the loan is for the purchase of a primary residence, then it shall not exceed 10 years. The loans are secured by the balance in the participant's account and bear interest at the average rate for secured personal loans then in effect at five banks selected by the Committee on the last working day of the month preceding the date on which the loan application was made. Principal and interest are paid ratably through payroll deductions. Payment of Benefits A participant may make three withdrawals in a calendar year, withdrawing all or a portion of his or her account balance, except the portion attributable to pre-tax contributions or allocated to the participant's loan account. If a participant is under age 59 1/2, a withdrawal may be made from the participant's pre-tax contributions and earnings account without penalty only if a financial hardship is demonstrated. Company contributions will be suspended for six months if a participant withdraws, while in-service, any matched before-tax or after-tax savings or Company contributions held for less than two years. If a participant's employment terminates due to the participant's death, total and permanent disability or retirement, the participant or the participant's beneficiary is entitled to receive the balance of all the participant's accounts as determined as of the valuation date coinciding with or immediately following the participant's termination of employment. Expenses of the Plan Reasonable expenses of administering the Plan, at the election of the Committee, may be paid by the Plan. For the years ended December 31, 2000 and 1999, the Company paid all administrative expenses of the Plan. Brokerage fees, transfer taxes, investment fees and other expenses incident to the purchase and sale of securities and investments shall be included in the cost of such securities or investments or deducted from the sales proceeds, as the case may be. 2. Significant Accounting Policies Basis of Accounting The financial statements have been prepared on the accrual basis of accounting. -5- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- Investment Valuation and Income Recognition The investments of the Plan are carried at fair value, except for the Plan's interest in the DuPont and Related Companies Defined Contribution Plan Master Trust ("Master Trust"). The Plan's interest in the Master Trust relating to investment contracts is based upon its beginning value plus actual contributions and allocated investment income less actual distributions (see Note 3). The Master Trust's investment contracts are fully benefit responsive and thus, are stated at contract value. Shares of registered investment companies (mutual funds) are valued at quoted market prices which represent the net asset value of shares held by the Plan at year end. Shares of common and collective trust funds are valued at net unit value as determined by the trustee at year end. Company stock valued at quoted market prices as of year end. Participant loans are valued at cost which approximates fair value. Purchases and sales of investments are recorded on the trade-date. Dividend income is recorded on the ex-dividend date. Interest income is accrued when earned. Payment of Benefits Benefits are recorded when paid. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the Plan's management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. Reclassifications These financial statements reflect the reclassification of certain prior year investment amounts to conform to the current year presentation. 3. DuPont and Related Companies Defined Contribution Plan Master Trust On April 1, 1999, the Company and certain affiliates ("employers") entered into a Master Trust Agreement with Merrill Lynch ("Trustee") to establish a master trust to allow participation from affiliated plans to invest in a Stable Value Fund and three different Asset Allocation Funds: the Conservative, Moderate and Aggressive portfolios. Prior to April 1, 1999, the Stable Value Fund and Asset Allocation Funds were separate investment options of the Plan. To participate in the Master Trust, affiliates who sponsor qualified savings plans and who have adopted the Master Trust Agreement are required to make monthly payments to the Trustee of designated portions of employees' savings and other contributions by the affiliate. The Plan's undivided interest in the Master Trust was .0019% and .00076% as of December 31, 2000 and 1999, respectively. Investment income relating to the Master Trust is allocated proportionately by investment fund to the plans within the Master Trust based on the plan's interest to the total fair value of the Master Trust investment funds. The Stable Value Fund is invested in guaranteed investment contracts, separate account portfolios, synthetic guaranteed investment contracts and money market funds. The crediting interest rates on investment contracts ranged from 5.83% to 8.50% for the year ended December 31, 2000 and from 5.41% to 9.60% for the year ended December 31, 1999. The blended rate of return was 6.72% in 2000 and 7.05% in 1999. -6- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- The crediting rates for certain investment contracts are reset annually and are based on the market value of the portfolio of assets underlying these contracts. Inputs used to determine the crediting rate include each contract's portfolio market value, current yield-to-maturity, duration (i.e., weighted average life) and market value relative to contract value. All contracts have a guaranteed rate of 0% or higher with respect to determining interest rate resets. A synthetic guaranteed investment contract provides for a guaranteed return on principal over a specified period of time through the use of underlying assets and a benefit responsive wrapper contract issued by a third party. Included in the contract value of synthetic guaranteed investment contracts is $(61,031,076) and $60,029,739 at December 31, 2000 and 1999, respectively, attributable to wrapper contract providers representing the amounts by which the value of contracts is (greater than) or less than the value of the underlying assets. Assets of the Master Trust include: 2000 1999 Investment contracts $ 5,134,555,882 $ 5,569,282,564 Common/Collective Trust Funds 25,007,540 - Money Market Funds 31,437,135 45,408,849 --------------- --------------- Total $ 5,191,000,557 $ 5,614,691,413 =============== =============== Investments of the Master Trust that represent more than 5% of the assets of the Master Trust were as follows: December 31, --------------------------------- 2000 1999 Investment Contracts: Bankers Trust - $ 323,423,566 Aetna Life and Annuity $ 356,648,682 335,052,829 Peoples Security 301,118,125 282,136,014 CDC Financial 336,220,628 313,990,127 Deutsche Bank (DUP-1) 330,341,799 309,537,018 Deutsche Bank (PIM-DUP-1) 273,816,467 328,679,231 Deutsche Bank (PIM-DUP-2) 347,269,727 JP Morgan (95-04) 320,535,834 301,786,966 JP Morgan (95-12) 353,745,646 322,976,797 Metropolitan Life 412,600,984 387,590,206 Union Bank of Switzerland 416,151,942 389,800,804 Peoples Security (BDA-0063-TR) - 334,215,802 Principal Life 280,402,889 - Monumental Life Insurance Co. 356,840,431 - -7- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- At December 31, 2000, the total assets of the Master Trust of $5,191,000,557 include participant investments in the Stable Value Fund of $5,144,944,410 and participant investments of $46,056,147 held by the Conservative, Moderate and Aggressive Allocation Funds. At December 31, 1999, the total Master Trust value of $5,614,691,413 included participant investments in the Stable Value Fund of approximately $5,573,930,424 and participant investments of approximately $40,760,989 held by the Conservative, Moderate and Aggressive Allocation Funds. Total investment income of the Master Trust for the years ended December 31, 2000 and 1999 was $353,329,080 and $366,044,652, respectively. New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued SFAS No.133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No. 133 requires that an entity recognize all derivatives and measure those instruments at fair value. SFAS No. 133 is effective for fiscal years beginning after June 15, 2000. Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No. 133 effective January 1, 2001. Management of the Plan has not yet been able to determine the impact of SFAS No. 133 on the Plan financial statements as a result of the inconsistency in accounting literature between SFAS No. 133, requiring derivatives to be measured at fair value, and the AICPA Audit and Accounting Guide on Audits of Employee Benefit Plans and Statement of Position 94-4, Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans, requiring benefit responsive investment contracts (including synthetic guaranteed investment contracts) to be measured at contract value. Until this discrepancy is resolved, management is unable to determine the impact that SFAS No. 133 will have on the Plan financial statements. The carrying value of those instruments is $4,001,503,657 and $3,994,653,926 at December 31, 2000 and 1999, respectively. The actual impact on the Plan net assets available for benefits of adopting SFAS No. 133 will be made based on the derivative positions at the date of adoption. -8- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- 4. Investments Investments that represent more than 5% of the net assets available for benefits as of December 31, 2000 and 1999 were as follows: 2000 1999 DuPont Company Stock Fund $ 155,892 $ 130,141 Fidelity Magellan Fund 119,265 58,867 Janus Mercury Fund 93,284 44,708 Janus Enterprise Fund 91,133 - Fidelity Growth & Income Fund Class A 78,224 64,789 AIM Value Fund 59,765 39,507 Merrill Lynch Equity Index TR Tier 6 58,010 38,349 Master Trust 98,753 39,203 During the years ended December 31, 2000 and 1999, the Plan's investments (depreciated) appreciated (including realized gains and losses) in value as follows: 2000 1999 Company Stock Funds $ (26,834) $ 15,111 Mutual Funds (147,267) 54,190 Common /Collective Trust Fund (6,418) 10,163 Master Trust 2,033 - ----------- -------- Net Unrealized (Depreciation) Appreciation $ (178,486) $ 79,464 ========== ======== 5. Conoco, Inc. Class B Common Stock Fund On September 28, 1998, DuPont announced that the Board of Directors had approved a plan to divest DuPont's 100 percent-owned petroleum business, Conoco, Inc. On August 6, 1999, DuPont completed the planned divestiture through a tax-free split-off. DuPont exchanged its shares of Conoco, Inc. Class B common stock for shares of DuPont common stock. Plan participants had the option to exchange shares of DuPont common stock, which were held in their participant accounts in the DuPont Common Stock Fund. For each share of DuPont common stock exchanged, the participant received an appropriate number of shares of Conoco Class B common stock. Accordingly, the Conoco Class B Stock Fund was created as an investment fund of the Plan. No additional shares of Conoco Class B common stock may be purchased by Plan participants through payroll deductions, fund transfers, or the reinvestment of dividends. Dividends earned on Conoco Class B common stock are distributed pro rata to the investment options in participants' accounts based upon their current investment elections. The balance of the Conoco Stock Fund was $10,377 and $19,694 at December 31, 2000 and 1999, respectively. -9- Qualicon Retirement and Savings Plan Notes to Financial Statements December 31, 2000 and 1999 -------------------------------------------------------------------------------- 6. Tax Status The Retirement and Savings Plan is a qualified plan pursuant to Section 401(a) of the Internal Revenue Code (the "Code") and the related Trusts are exempt from federal taxation under Section 501(a) of the Code. A favorable tax determination letter from the Internal Revenue Service dated April 4, 2000 has been received by the Plan. This determination letter is applicable for the Plan adopted on May 20, 1998 and all amendments through inception. The Plan administrator and the Plan's ERISA counsel believe that the Plan is currently designed and operated in accordance with the applicable sections of the Code. Accordingly, no provision has been made for federal income taxes in the accompanying financial statements. 7. Related Party Transactions Certain Plan investments are shares of mutual funds and units of common/collective trust funds managed by Merrill Lynch, the Trustee. In addition, the Plan offers the DuPont Company Stock Fund investment option. The Master Trust is managed by DuPont Capital Management and the Trustee. Therefore, transactions in these investments qualify as party-in-interest transactions which are exempt from prohibited transaction rules. 8. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. -10- Qualicon Exhibit I Retirement and Savings Plan Schedule of Assets (Held at End of Year) Form 5500, Schedule H, Part IV, Line I As of December 31, 2000 --------------------------------------------------------------------------------
Current Identity of Issue Description of Investment Value Fidelity Low Priced Stock Fund Registered Investment Company $ 19,980 Franklin Small Cap Growth Fund Class I Registered Investment Company 33,872 Janus Enterprise Fund Registered Investment Company 91,133 Janus Mercury Fund Registered Investment Company 93,284 Templeton Growth Fund Registered Investment Company 37,100 AIM Value Fund Registered Investment Company 59,765 Fidelity Growth & Income Fund Class A Registered Investment Company 78,224 MFS Total Return Fund Registered Investment Company 3,212 * Merrill Lynch Balanced Capital Fund Class A Registered Investment Company 2,250 * Merrill Lynch Basic Value Fund Class A Registered Investment Company 21,184 Mercury HW International Value Fund Class I Registered Investment Company 19,633 Merc Global Holdings Fund Class I Registered Investment Company 461 * Merrill Lynch Growth Fund Class A Registered Investment Company 24,175 AIM Equity Constellation Fund Registered Investment Company 21,101 Franklin Balance Sheet Fund Registered Investment Company 28,130 Templeton Foreign Fund Registered Investment Company 10,995 Fidelity Magellan Fund Registered Investment Company 119,265 Fidelity Fund PV 1 Registered Investment Company 19,671 Fidelity Equity Income Fund Registered Investment Company 4,708 Franklin Custody Fund Income Growth Registered Investment Company 9,243 MFS Research Fund Registered Investment Company 4,456 Barclays 3-Way Common/Collective Trusts 31,368 * Merrill Lynch Small Capital Index CT Tier 2 Common/Collective Trusts 2,024 * Merrill Lynch Equity Index TR Tier 6 Common/Collective Trusts 58,010 * Merrill Lynch International Index CT Tier 2 Common/Collective Trusts 5,149 * E. I. du Pont de Nemours and Company Company Stock Fund 155,892 Conoco Inc. Class B Company Stock Fund 10,377 * Plan interest in the DuPont and Related Companies Defined Contribution Plan Master Trust ("Master Trust") Master Trust 98,753 Participant Loans 8.5% to 9.0% 61,022 ----------- Investment Total $ 1,124,437 -----------
* Party-in-Interest -11-