-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HAbRBnWRBmc3jR+qx5bH+JlyxRHEDql2/AfHCoomOnnEyJTgSppNlIFuYVUyqLIH MAsdiR7kshDpVeT41gOxWA== 0000950109-94-000508.txt : 19940322 0000950109-94-000508.hdr.sgml : 19940322 ACCESSION NUMBER: 0000950109-94-000508 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: 2820 IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-00815 FILM NUMBER: 94517074 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 10-K 1 FORM 10-K 1993 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-815 E. I. DU PONT DE NEMOURS AND COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 51-0014090 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 1007 MARKET STREET WILMINGTON, DELAWARE 19898 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 302-774-1000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT (EACH CLASS IS REGISTERED ON THE NEW YORK STOCK EXCHANGE, INC.): TITLE OF EACH CLASS COMMON STOCK ($.60 PAR VALUE) PREFERRED STOCK (WITHOUT PAR VALUE-CUMULATIVE) $4.50 SERIES $3.50 SERIES 6% DEBENTURES DUE 2001 8 1/2% DEBENTURES DUE 2016 (CALLED ON FEBRUARY 24, 1994) NO SECURITIES ARE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . Aggregate market value of voting stock (excluding outstanding shares beneficially owned by directors and officers) as of March 1, 1994, was approximately $26.5 billion. As of such date, 678,703,215 shares of the company's common stock, $.60 par value, were outstanding. Documents Incorporated by Reference (Specific pages incorporated are indicated under the applicable Item herein):
INCORPORATED BY DOCUMENT REFERENCE IN PART NO. -------- --------------------- The company's 1993 Annual Report to Stockholders........ I, II, and IV The company's Proxy Statement, dated March 18, 1994, in connection with the Annual Meeting of Stockholders to be held on April 27, 1994.............................. III
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- E. I. DU PONT DE NEMOURS AND COMPANY The terms "DuPont" or the "company" as used herein refer to E. I. du Pont de Nemours and Company and its consolidated subsidiaries (which are wholly owned or majority-owned), or to E. I. du Pont de Nemours and Company, as the context may indicate. TABLE OF CONTENTS
PAGE ---- PART I Item 1. Business ................................................... 3 Item 2. Properties ................................................. 6 Item 3. Legal Proceedings .......................................... 11 Item 4. Submission of Matters to a Vote of Security Holders ........ 13 Executive Officers of the Registrant ....................... 13 PART II Market for the Registrant's Common Equity and Related Item 5. Stockholder Matters ....................................... 14 Item 6. Selected Financial Data .................................... 14 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 14 Item 8. Financial Statements and Supplementary Data ................ 14 Item 9. Disagreements on Accounting and Financial Disclosure ....... 14 PART III Item 10. Directors and Executive Officers of the Registrant ......... 15 Item 11. Executive Compensation ..................................... 15 Security Ownership of Certain Beneficial Owners and Item 12. Management ................................................ 15 Item 13. Certain Relationships and Related Transactions ............. 15 PART IV Exhibits, Financial Statement Schedules, and Reports on Form Item 14. 8-K ....................................................... 15 Signatures............................................................ 18
NOTE ON INCORPORATION BY REFERENCE Throughout this report, various information and data are incorporated by reference to portions of the company's 1993 Annual Report to Stockholders (those portions are hereinafter referred to as Exhibit 13). Any reference in this report to disclosures in Exhibit 13 shall constitute incorporation by reference of that specific material into this Form 10-K. 2 PART I ITEM 1. BUSINESS DuPont was founded in 1802 and was incorporated in Delaware in 1915. The company is the largest United States chemical producer and is one of the leading chemical producers worldwide. The company conducts fully integrated petroleum operations primarily through its wholly owned subsidiary Conoco Inc. and, in 1992, ranked eighth in the worldwide production of petroleum liquids by U.S.-based companies and tenth in the production of natural gas. Conoco Inc. and other subsidiaries and affiliates of DuPont conduct exploration, production, mining, manufacturing or selling activities, and some are distributors of products manufactured by the company. During 1993, the company significantly changed the way it was organized. Large business sectors were eliminated and replaced by approximately twenty strategic business units. Within the strategic business units approximately 85 businesses manufacture and sell a wide range of products to many different markets, including the energy, transportation, textile, construction, automotive, agricultural, printing, health care, packaging and electronics markets. The company and its subsidiaries have operations in about 70 nations worldwide and, as a result, about 45% of consolidated sales are derived from sales outside the United States, based on the location of the corporate unit making the sale. Total worldwide employment at year-end 1993 was about 114,000 people. The company is organized for financial reporting purposes into five principal industry segments--Chemicals, Fibers, Polymers, Petroleum, and Diversified Businesses. The following information describing the businesses of the company can be found on the indicated pages of Exhibit 13:
ITEM PAGE(S) ---- --------- Discussion of Business Developments in 1993: Letter to Stockholders............................................. 2,4*, 5,7 Industry Segment Reviews: Business Discussions, Principal Products and Principal Markets: Chemicals........................................................ 20-21 Fibers........................................................... 21-23 Polymers......................................................... 23-24 Petroleum........................................................ 24-26 Diversified Businesses........................................... 27-28 Sales, Transfers, Operating Profit, After-Tax Operating Income, and Identifiable Assets for 1993, 1992, and 1991...................... 55-57 Geographic Information: Sales, Transfers, After-Tax Operating Income, Identifiable Assets, and U.S. Export Sales for 1993, 1992, and 1991.................... 54 Revenues by Product Class (See footnote 1 on page 56 of Exhibit 13).. 56
- -------- * Exclude photograph and related caption on page 4. SOURCES OF SUPPLY The company utilizes numerous firms as well as internal sources to supply a wide range of raw materials, energy, supplies, services and equipment. To assure availability, the company maintains multiple sources for most raw materials, including hydrocarbon feedstocks, and for fuels. Large volume purchases are generally procured under competitively priced supply contracts. 3 A majority of sales in the Chemicals, Fibers, and Polymers segments' businesses is dependent on hydrocarbon feedstocks derived from crude oil and natural gas. Current hydrocarbon feedstock requirements are met by Conoco and other major oil companies. A joint venture with OxyChem, a subsidiary of Occidental Petroleum Corporation, manufactures and supplies a significant portion of the company's requirements for ethylene glycol. A joint venture with subsidiaries of RWE AG supplies the company's requirements for coal. A significant portion of the company's caustic/chlorine needs is supplied by a joint venture with Olin Corporation. The major purchased commodities, raw materials, and supplies for the following industry segments in 1993 are listed below:
CHEMICALS FIBERS DIVERSIFIED BUSINESSES POLYMERS --------- ------ ---------------------- -------- acetylene adipic acid aluminum acetic acid benzene ammonia gold acetone carbon- benzene metribuzin butadiene tetrachloride butadiene palladium/platinum caustic soda caustic soda cyclohexane silver chlorine chlorine ethylene glycol ethane chloroform isophthalic acid ethylene glycol cyclohexane nitrogen nitrogen fluorspar packaging materials packaging materials hydrofluoric acid paraxylene paraxylene oxygen/nitrogen polyethylene polyethylene packaging materials perchloroethylene propylene sulfur titanium ores
In the Petroleum segment, the major commodities and raw materials purchased are the same as those produced. Approximately 59% of the crude oil processed in the company's U.S. refineries in 1993 came from U.S. sources. In 1993, the company's refineries outside the United States processed principally North Sea and Middle East crude oils. In addition, during 1993, the company consumed substantial amounts of electricity and natural gas. PATENTS AND TRADEMARKS The company owns and is licensed under various patents, which expire from time to time, covering many products, processes and product uses. No individual patent is of material importance to any of the industry segments, although taken as a whole, the rights of the company and the products made and sold under patents and licenses are important to the company's business. During 1993, the company was granted 591 U.S. and 1,828 non-U.S. patents. The company also has about 900 registered trademarks for its products. Ownership rights in trademarks continue indefinitely if the trademarks are continued in use and properly protected. SEASONALITY In general, sales of the company's products are not substantially affected by seasonality. However, the Diversified Businesses segment is impacted by seasonality of sales of agricultural products with highest sales in the first half of the year, particularly the second quarter. Within the Petroleum segment, the mix of refined products, natural gas and natural gas liquids varies because of increased demand for gasoline in the summer months and natural gas, heating oil and propane during the winter months. 4 MAJOR CUSTOMERS The company's sales are not materially dependent on a single customer or small group of customers. The Fibers and Polymers segments, however, have several large customers in their respective industries that are important to these segments' operating results. COMPETITION Principal competitors in the chemical industry include major chemical companies based in the United States, Europe, Japan, the Republic of China and other Asian nations. Competitors offer a comparable range of products from agricultural, commodity and specialty chemicals to plastics, fibers and medical products. The company also competes in certain product markets with smaller, more specialized firms. Principal competitors in the petroleum industry are integrated oil companies, many of which also have substantial petrochemical operations, and a variety of other firms including independent oil and gas producers, pipeline companies, and large and small refiners and marketers. In addition, the company competes with the growing petrochemical operations in oil-producing countries. Businesses in the Chemicals, Fibers, Polymers, and Diversified Businesses segments compete on a variety of factors such as price, product quality or specifications, customer service and breadth of product line, depending on the characteristics of the particular market involved. The Petroleum segment business is highly price-competitive and competes as well on quality and reliability of supply. Further information relating to competition is included in two areas of Exhibit 13 (1) the "Letter to Stockholders" on pages 2, 4*, 5, 7 and (2) Industry Segment Reviews on pages 20-28. RESEARCH AND DEVELOPMENT The company's substantial research and development activities are primarily funded with internal resources and conducted at over 60 domestic sites in 21 states at both dedicated research facilities and manufacturing plants. DuPont operates several large research centers near Wilmington, Delaware supporting strategic business units in its Chemicals, Fibers, Polymers and Diversified Businesses segments. Among these, the Experimental Station laboratories engage in fundamental, exploratory and applied research, and the Stine-Haskell Research Center conducts agricultural product research and toxicological research of company products to assure they are safe for manufacture and use. At its facility in Ponca City, Oklahoma, the company conducts research for new products and technologies for petroleum operations as well as other segments of the business. DuPont also operates research facilities at a number of locations outside the United States in Belgium, Canada, France, Germany, Japan, Luxembourg, Mexico, Netherlands, Switzerland and the United Kingdom reflecting the company's growing global business interests. Research and development activities include exploratory studies to advance scientific knowledge in fields of interest to the company; basic and applied work to support and improve existing products and processes; and scouting work to identify and develop new business opportunities in relevant fields. Each strategic business unit of the company funds research and development activities to support its business mission. The corporate laboratories are responsible for assuring that leading-edge science and engineering concepts are identified and diffused throughout the DuPont technical community. All R&D activities are coordinated by senior R&D management to insure that business and corporate technical activities are integrated and that the core technical competencies underlying DuPont's current and future businesses remain healthy and continue to provide competitive advantages. Further information regarding research and development is in Exhibit 13 on page 4 of the "Letter to Stockholders." Annual research and development expense and such expense shown "As Percent of Combined Segment Sales" for the five years 1989 through 1993 are included under the heading "General" of the Five- Year Financial Review on page 65 of Exhibit 13. - -------- * Exclude photograph and related caption on page 4. 5 ENVIRONMENTAL MATTERS Information relating to environmental matters is included in two areas of Exhibit 13 (1) the "Letter to Stockholders" on page 5 and (2) "Management's Discussion and Analysis" on pages 33-34. RISKS ATTENDANT TO FOREIGN OPERATIONS The company's petroleum exploration and production operations outside the United States are exposed to risks due to possible actions by host governments such as increases or variations in tax and royalty payments, participation in the company's concessions, limited or embargoed production, mandatory exploration or production controls, nationalization, and export controls. Civil unrest and changes in government are also potential hazards. Under certain circumstances, the company has attempted to minimize its exposure by carrying political risk insurance. The profitability of the company's worldwide exploration and production operations is also exposed to risks due to actions of the United States government through tax legislation, executive order, and commercial restrictions. Actions by both the United States and host governments have affected operations significantly in the past, and may continue to impact operations in the future. ITEM 2. PROPERTIES The company owns and operates manufacturing, processing, production, refining, marketing, research and development facilities worldwide. In addition, the company owns and leases petroleum properties worldwide. DuPont's corporate headquarters is located in Wilmington, Delaware, and the company's petroleum businesses are headquartered in Houston, Texas. In addition, the company operates sales offices, regional purchasing offices, distribution centers and various other specialized service locations. Further information regarding properties is included in Exhibit 13 in the Industry Segment Reviews on pages 20-28. Information regarding research and development facilities is incorporated by reference to Item 1, Business-- Research and Development on page 5 of this report. Additional information with respect to the company's property, plant and equipment, and leases is incorporated by reference to Schedules V and VI on pages 20-22 of this report, and is contained in Notes 14 and 21 to the company's consolidated financial statements on pages 46 and 50 of Exhibit 13. CHEMICALS, FIBERS, POLYMERS, AND DIVERSIFIED BUSINESSES Approximately 75% of the property, plant and equipment related to operations in the Chemicals, Fibers, Polymers, and Diversified Businesses is located in the United States and Puerto Rico. This investment is located at some 85 sites, principally in Texas, Delaware, Virginia, North Carolina, Tennessee, West Virginia, South Carolina, and New Jersey. The principal locations within these states are as follows: TEXAS DELAWARE VIRGINIA NORTH CAROLINA ----- -------- -------- -------------- Beaumont Edge Moor Front Royal Brevard Corpus Christi Glasgow James River Fayetteville LaPorte Newark Martinsville Kinston Orange Newport Richmond Raleigh Victoria Seaford Waynesboro Wilmington TENNESSEE WEST VIRGINIA SOUTH CAROLINA NEW JERSEY --------- ------------- -------------- ---------- Chattanooga Belle Camden Deepwater Memphis Martinsburg Charleston Gibbstown New Johnsonville Parkersburg Florence Old Hickory
Property, plant and equipment outside the United States and Puerto Rico is located at about 70 sites, principally in Canada, the United Kingdom, Germany, Netherlands, Luxembourg, Singapore, Taiwan, 6 Mexico, France, Japan, Spain, Brazil, Republic of Korea, Argentina and Belgium. Products from more than one business are frequently produced at the same location. The company's plants and equipment are well maintained and in good operating condition. Sales as a percent of capacity were 85% in 1993, 88% in 1992, and 86% in 1991. These properties are directly owned by the company except for some auxiliary facilities and miscellaneous properties, such as certain buildings and transportation equipment, which are leased. Although no title examination of the properties has been made for the purpose of this report, the company knows of no material defects in title to any of these properties. PETROLEUM BUSINESSES The company owns and leases oil and gas properties worldwide. Exploration, production, and natural gas and gas products properties are described generally on pages 24-26 and 58-63 of Exhibit 13. Estimated proved reserves of oil and gas are found on page 58 of Exhibit 13. Information regarding the company's refining, marketing, supply, and transportation properties is also provided on pages 24-26 of Exhibit 13. PETROLEUM PRODUCTION The following tables show the company's interests in petroleum production and natural gas deliveries. Petroleum liquids production comprises crude oil and condensate and natural gas liquids (NGL) removed for the company's account from its natural gas deliveries. Natural gas deliveries represent Conoco's share of deliveries from leases in which the company has an ownership interest. NGL's extracted from purchased natural gas by the company's gas processing plants are discussed under the topic "Natural Gas and Gas Products" on pages 9 and 10.
1993 1992 1991 ---- ---- ---- [THOUSANDS OF BARRELS DAILY (MBD)] Petroleum Liquids Production of Fully Consolidated Companies United States Crude oil and condensate.............. 94 103 113 Natural gas liquids................... 14 7 9 --- --- --- Total United States................. 108 110 122 Europe Crude oil and condensate.............. 146 125 115 Natural gas liquids................... 6 7 6 --- --- --- Total Europe(a)..................... 152 132 121 Other Regions Crude oil and condensate.............. 106 92 99 Natural gas liquids................... 1 1 0 --- --- --- Total Other Regions(a).............. 107 93 99 --- --- --- Total Worldwide..................... 367 335 342 === === === [MILLION CUBIC FEET DAILY (MCFD)] Natural Gas Deliveries of Fully Consoli- dated Companies United States........................... 834 762 756 Europe(a)............................... 409 360 320 Other Regions........................... 50 55 54 ----- ----- ----- Subtotal Fully Consolidated........... 1,293 1,177 1,130 Natural Gas Deliveries of Equity Affili- ates United States........................... 18 3 0 ----- ----- ----- Total Worldwide....................... 1,311 1,180 1,130 ===== ===== ===== (a) Excludes royalty volumes produced and marketed by the company: Petroleum Liquids (MBD)................. 37 38 40 Natural Gas Deliveries (MMCFD).......... 6 10 9
7 AVERAGE PRODUCTION COSTS AND SALES PRICES The following table presents data as prescribed by the Securities and Exchange Commission (SEC). Accordingly, the unit costs do not include income taxes and exploration, development and general overhead costs. Since these excluded costs are material, the following data should not be interpreted as measures of profitability or relative profitability. See Results of Operations for Oil- and Gas-Producing Activities on page 59 of Exhibit 13 for a more complete disclosure of revenues and expenses. See also the references to crude oil and natural gas prices and volumes in business review of the Petroleum segment on pages 24-26 of Exhibit 13.
UNITED OTHER STATES EUROPE REGIONS ------ ------ ------- (U.S. DOLLARS) For the year ended December 31, 1993 Average production costs per barrel equivalent of petroleum produced(a)................................. $4.97 $4.34 $1.63 Average sales prices of produced petroleum(b) Per barrel of crude oil and condensate sold.......... 14.66 17.35 15.32 Per thousand cubic feet (MCF) of natural gas sold.... 1.94 2.77 1.32 For the year ended December 31, 1992 Average production costs per barrel equivalent of petroleum produced(a)................................. 5.86 6.73 1.98 Average sales prices of produced petroleum(b) Per barrel of crude oil and condensate sold.......... 17.35 19.39 17.30 Per MCF of natural gas sold.......................... 1.70 2.77 1.02 For the year ended December 31, 1991 Average production costs per barrel equivalent of petroleum produced(a)................................. 6.14 5.24 1.74 Average sales prices of produced petroleum(b) Per barrel of crude oil and condensate sold.......... 20.04 20.98 16.90 Per MCF of natural gas sold.......................... 1.59 3.17 1.19
- -------- (a) Average production costs per barrel of equivalent liquids, with natural gas converted to liquids at a ratio of 6 MCF of gas to one barrel of liquids. (b) Excludes proceeds from sales of interest in oil and gas properties. PRESENT ACTIVITIES
TOTAL UNITED OTHER WORLDWIDE STATES EUROPE REGIONS --------- ------ ------ ------- (NUMBER OF WELLS) At December 31, 1993 Number of wells drilling* Gross....................................... 46 25 17 4 Net......................................... 25 20 3 2 Number of productive wells** Oil wells--gross............................ 16,385 15,819 222 344 --net.................................... 4,672 4,524 26 122 Gas wells--gross............................ 7,563 7,442 65 56 --net................................... 2,869 2,792 24 53
- -------- *Includes wells being completed. **Approximately 186 gross (72 net) oil wells and 602 gross (177 net) gas wells, all in the United States, have multiple completions. 8 DEVELOPED AND UNDEVELOPED PETROLEUM ACREAGE
TOTAL UNITED OTHER WORLDWIDE STATES EUROPE REGIONS --------- ------ ------ ------- (THOUSANDS OF ACRES) At December 31, 1993 Developed acreage Gross...................................... 8,031 3,121 1,094 3,816 Net........................................ 3,510 1,735 307 1,468 Undeveloped acreage Gross...................................... 82,735 2,166 5,797 74,772 Net........................................ 34,283 1,463 1,859 30,961 NET EXPLORATORY AND DEVELOPMENT WELLS DRILLED TOTAL UNITED OTHER WORLDWIDE STATES EUROPE REGIONS --------- ------ ------ ------- (NUMBER OF NET WELLS COMPLETED) For the year ended December 31, 1993 Exploratory--productive...................... 15.6 10.7 3.4 1.5 --dry 24.5 16.3 2.5 5.7 Development--productive...................... 175.2 158.3 5.0 11.9 --dry................................... 24.5 24.0 0.0 0.5 For the year ended December 31, 1992 Exploratory--productive...................... 17.1 11.6 4.5 1.0 --dry................................... 22.0 10.2 5.0 6.8 Development--productive...................... 121.9 107.9 4.1 9.9 --dry................................... 13.1 10.9 0.7 1.5 For the year ended December 31, 1991 Exploratory--productive...................... 21.4 14.3 5.3 1.8 --dry................................... 37.4 16.8 10.6 10.0 Development--productive...................... 184.5 171.3 3.0 10.2 --dry................................... 7.6 7.6 0.0 0.0
ESTIMATES OF TOTAL PROVED RESERVES FILED WITH OTHER FEDERAL AGENCIES COVERING THE YEAR 1993 The company is not required to file, and has not filed on a recurring basis, estimates of its total proved net oil and gas reserves with any U.S. or non- U.S. governmental regulatory authority or agency other than the Department of Energy (DOE) and the SEC. The estimates furnished to the DOE have been consistent with those furnished to the SEC. They are not necessarily directly comparable, however, due to special DOE reporting requirements such as requirements to report in some instances on a gross, net or total operator basis, and requirements to report in terms of smaller units. In no instance have the estimates for the DOE differed by more than 5% from the corresponding estimates reflected in total reserves reported to the SEC. NATURAL GAS AND GAS PRODUCTS The company has interests in 30 natural gas processing plants in the United States. Natural gas liquids extracted for the company's account from produced and purchased gas averaged 68,631 barrels per day in 1993 and 60,901 barrels per day in 1992. The company operates 16 of the gas plants: 1 in Colorado, 3 in Louisiana, 2 in New Mexico, 4 in Oklahoma, and 6 in Texas. Other natural gas facilities include an 800-mile intrastate natural gas pipeline system in Louisiana, owned by Louisiana Gas System, Inc., a wholly owned subsidiary, and natural gas and natural gas liquids pipelines in several states. C&L Processors Partnership, a 50% owned equity affiliate, has an additional 13 natural gas liquids plants in Oklahoma and Texas, and 9 Conoco's pro rata share of NGL production is 7,885 barrels per day. In May 1993, Conoco acquired a 22.5% interest in Gulf Coast Fractionators, a natural gas fractionator located in Mt. Belvieu, Texas, which is currently expanding from a capacity of 64,000 barrels per day to 104,000 barrels per day. Outside the United States, the company operates a 50% owned gas processing facility at Theddlethorpe, England, and owns a 41% interest in Phoenix Park Gas Processors, whose gas processing facility at Point Lisas, Trinidad, provided a net NGL production of 3,661 barrels per day to Conoco in 1993. REFINING The company currently owns and operates four refineries in the United States located at Lake Charles, Louisiana; Ponca City, Oklahoma; Billings, Montana; and Denver, Colorado. The company also owns and operates the Humber refinery in the United Kingdom and has a 25% interest in a refinery at Karlsruhe in Germany. Capacities at year-end 1993 as well as inputs processed during 1993 are summarized in the following table:
TOTAL UNITED UNITED WORLDWIDE STATES KINGDOM GERMANY* --------- ------ ------- -------- (THOUSANDS OF BARRELS DAILY) At December 31, 1993 Refinery crude oil and condensate distillation capacity (excluding additional feedstocks input to other refinery units)........................... 595 422 130 43 For the year ended December 31, 1993 Inputs processed Crude oil and condensate................. 568 391 131 46 Additional feedstocks input to other re- finery units............................ 106 28 62 16
- -------- * Represents 25% interest in the Karlsruhe refinery. Utilization of refinery capacity depends on the market demand for petroleum products and the availability of crude oil and other feedstocks. MARKETING In the United States, the company sells refined products at retail in 38 states, principally under the "Conoco" brand. In addition, the company markets a wide range of products other than at retail in all 50 states and the District of Columbia. Refined products are also sold in Austria, Germany and the United Kingdom under the "Jet" and "Conoco" brands; in Belgium, France and Luxembourg under the "Seca" brand; and in Switzerland under the "OK Coop" brand. The "Jet" brand is used for marketing in the Czech Republic, Denmark, Finland, Hungary, Ireland, Norway, Poland, Sweden, and Thailand. The company has commenced operations in Spain through a 50% equity affiliate. SUPPLY AND TRANSPORTATION The company has an extensive pipeline system for crude oil and refined products. Information concerning daily pipeline shipments is presented below:
1993 1992 1991 ------- ------- ------- (THOUSANDS OF BARRELS) Average Daily Pipeline Shipments Pipeline shipments of consolidated companies......... 761 816 822 Equity in shipments of nonconsolidated affiliates.... 366 334 315
Conoco Pipe Line Company (CPL), a wholly owned subsidiary and operator of the company's U.S. petroleum pipeline system, transported approximately 722 thousand barrels per day of crude oil and refined 10 products in 1993. In addition to pipeline facilities, CPL operates, under a management contract, four marine terminals, one coke-exporting facility and 52 product terminals located throughout the United States. These facilities are wholly or jointly owned by the company. Crude oil is gathered in the Rocky Mountain, mid-continent and southern Louisiana areas primarily for delivery to local refiners. Refined products pipelines are located in the Rocky Mountain and mid-continent areas to serve regional demand centers. Other U.S. transportation assets include numerous tank cars, barges, tank trucks and other motor vehicles. The company also operates a fleet of seagoing crude oil tankers. These vessels, principally of Liberian registry, are described as follows:
1993 1992 1991 ---------- ---------- ---------- (THOUSANDS OF DEADWEIGHT TONS) Controlled Seagoing Vessel Capacity Owned and Leased............................. 1,139 947 759 Trip Charger................................. -- 174 261 ---------- ---------- ---------- Total Capacity............................... 1,139 1,121 1,020 ========== ========== ========== (NUMBER OF VESSELS) Number of Vessels 80,000 DWT and Above Single Hull.................................. 4 6 7 Double Hull.................................. 4 2 -- ---------- ---------- ---------- Total Vessels................................ 8 8 7 ========== ========== ==========
ITEM 3. LEGAL PROCEEDINGS Because of the size and nature of its business, the company is subject to numerous lawsuits and claims with respect to such matters as product liabilities, governmental regulations and other actions arising out of the normal course of business. While the effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists, in the opinion of company counsel, the ultimate liabilities resulting from such lawsuits and claims will not materially affect the consolidated financial position of the company. To date, DuPont has been served with more than 500 lawsuits in several jurisdictions, principally Florida, Hawaii and Puerto Rico, by growers who allege plant damage from using "Benlate" DF 50 fungicide. Seventy (70) of these suits have been disposed of: 12 by dismissal, 3 by summary judgment, 52 by settlement, 1 by directed verdict in DuPont's favor at trial, and 2 by jury verdict in DuPont's favor. Additionally, DuPont obtained summary judgment in 7 Florida cases, based on the economic loss doctrine which limits damages to breach of warranty. In our most recent trial (2 cases), a Florida jury returned a verdict in DuPont's favor. In 5 other trials, jury verdicts have been returned against DuPont, but for an average of less than a third of the compensatory damages claimed by the plaintiffs. In 4 of these trials, the juries also allocated liability to the plaintiffs. DuPont has appealed these jury verdicts. DuPont also had one jury verdict for the company. DuPont believes that "Benlate" DF 50 fungicide did not cause the alleged damages. DuPont had earlier paid claims based on the belief that, at the time, "Benlate" DF 50 would be found to be a contributor to the reported plant damage. In 1992, after eighteen months of extensive research, DuPont scientists concluded that "Benlate" DF 50 was not responsible for plant damage reports received since March 1991. Concurrent with these research findings, DuPont stopped paying claims relating to those reports. Since 1989, DuPont has been served with approximately fifty-two, lawsuits in several jurisdictions, principally in Texas, Florida, Maryland and Arizona alleging damages as a result of leaks in certain polybutylene plumbing systems. A nationwide class action has been filed in state and federal court in Houston, Texas, but the class has not been certified as of this date. In most cases, DuPont is a codefendant with Shell, Hoechst-Celanese and other parts manufacturers. The polybutylene plumbing systems consist of flexible pipe 11 extruded from polybutylene connected by plastic fittings made from acetal. Shell Chemical is the sole producer of polybutylene; the acetals are provided by Hoechst-Celanese and DuPont. DuPont entered the market in 1983, and it is not known as to the number of commercial or dwelling units that have polybutylene plumbing systems, or the number of commercial or dwelling units that have DuPont's product in their plumbing systems. Presently, DuPont is active in twenty-four suits. There have been twenty-four lawsuits of which the company has disposed of twenty-three by pretrial settlements and one by dismissal. DuPont has not been to trial in any case. On October 24, 1988, the Louisiana Department of Environmental Quality (LDEQ) issued a Compliance Order and Notice of Proposed Penalty to Conoco Inc. for alleged violations of the Louisiana Hazardous Waste Regulations. Following an inspection, LDEQ proposed a penalty of $165,000 for alleged violations related to the handling of by-product caustic and other refinery waste management practices. The company's legal counsel believes that the allegations are generally without factual basis, and that the penalty will be significantly reduced. On April 3, 1991, the Environmental Protection Agency (EPA) assessed a civil penalty of $1.3 million pursuant to a Complaint and Notice of Hearing alleging violations of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) in connection with the distribution of a company fungicide. The allegations arise out of the discovery that a herbicide may have been introduced inadvertently into some batches of the fungicide during formulation at contractor sites in 1988 and 1989. The company was made aware of the potential problem by complaints from growers and notified EPA in August 1989 that it was undertaking a voluntary recall of suspect batches. EPA issued a stop sale order in September 1989 accompanied by a formal request for a product recall. The company has reviewed its recall with EPA and they have expressed satisfaction with the company's efforts. The company intends to seek a settlement of the Complaint and expects that the assessed penalty will be reduced. On October 15, 1993, EPA filed a complaint in the U.S. District Court, Eastern District of Texas (Beaumont), against DuPont alleging various violations of the Clean Water Act at the Sabine River Works. Included are alleged unauthorized discharges, effluent limitation violations, and monitoring and reporting violations under the plant's NPDES permit. The government is seeking a civil penalty of $1.4 million. DuPont's legal counsel believes that most of the allegations are legally without merit and that the case will ultimately settle for a significantly smaller amount. DuPont has entered into a voluntary agreement with the EPA to conduct an audit of the U.S. sites under the Toxic Substance Control Act (TSCA). Agreement participation is not an admission of TSCA noncompliance. Maximum stipulated penalties which DuPont could pay under the agreement are capped at $1 million. The first phase of the audit was completed, but no findings have been issued. Subject to EPA's issuance of new reporting criteria, the second phase of its audit is scheduled to begin in mid-1994. On October 18, 1991, EPA issued an Administrative Order under the Resource Conservation and Recovery Act (RCRA) directing Conoco Pipe Line Company (CPLC) to undertake specific remedial measures related to a former oil reprocessing facility in Converse County, Wyoming. CPLC contested the Administrative Order, and has taken voluntary measures at the site together with other interested parties. On February 19, 1993, the U.S. Department of Justice (DOJ) filed a lawsuit against 10 entities, including CPLC, to enforce the Order and collect penalties. The DOJ calculates CPLC's maximum penalties as of April 1, 1993 at approximately $2.6 million. The lawsuit is in the discovery phase, and CPLC intends to vigorously defend this matter. On July 1, 1993, EPA filed an administrative complaint against DuPont. EPA alleged that DuPont violated the premanufacturing notification regulations of the U.S. Toxic Substances Control Act (TSCA) and sought a $158,375 penalty. DuPont and EPA have signed an agreement to settle the complaint. Under the settlement, DuPont paid EPA $80,000, but did not admit that EPA's legal conclusions were true. 12 On December 21, 1993, Conoco's Denver Refinery received a Notice of Violation from EPA, Region VIII, and the Colorado Department of Health requesting a civil penalty of $169,500 in a dispute over proper scope and scheduling of certain RCRA on-site investigation activities. The investigation activities have previously been the subject of a settlement with EPA and the Colorado Department of Health, and the work performed has been in compliance with such agreement in the opinion of company counsel. As such, it is anticipated that the fine will be significantly reduced pursuant to negotiations between the parties. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. EXECUTIVE OFFICERS OF THE REGISTRANT The following is a list, as of March 1, 1994, of the company's executive officers.
EXECUTIVE OFFICER AGE SINCE --- --------- Chairman of the Board of Directors and Chief Executive Officer Edgar S. Woolard, Jr.(1)....................................... 59 1981 Vice Chairmen of the Board of Directors John A. Krol(1)................................................ 57 1987 Constantine S. Nicandros(1).................................... 60 1981 Other Executive Officers: Jerald A. Blumberg, Senior Vice President...................... 54 1990 Archie W. Dunham, Senior Vice President........................ 55 1985 Gary W. Edwards, Senior Vice President......................... 52 1991 Michael B. Emery, Senior Vice President........................ 55 1990 Charles L. Henry, Senior Vice President and Chief Financial Officer....................................................... 52 1986 Charles O. Holliday, Jr., Senior Vice President................ 45 1992 Robert v.d. Luft, Senior Vice President........................ 58 1988 Robert E. McKee, III, Senior Vice President.................... 48 1992 Joseph A. Miller, Jr., Senior Vice President................... 52 1994 Stacey J. Mobley, Senior Vice President........................ 48 1992 D. John Ogren, Senior Vice President........................... 50 1992 Howard J. Rudge, Senior Vice President and General Counsel..... 58 1994 John F. Schmutz, Senior Vice President......................... 61 1985 W. Earl Tatum, Senior Vice President........................... 60 1985
- -------- (1) Member of the Board of Directors. The Company's executive officers are elected or appointed for the ensuing year or for an indefinite term, and until their successors are elected or appointed. Each officer named above has been an officer or an executive of DuPont or its subsidiaries during the past five years. 13 PART II Information with respect to the following Items can be found on the indicated pages of Exhibit 13 if not otherwise included herein. ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The company's common stock is listed on the New York Stock Exchange, Inc. (symbol DD) and certain non-U.S. exchanges. The number of record holders of common stock was 181,264 at December 31, 1993 and 179,171 at March 1, 1994.
PAGE(S) -------- Quarterly Financial Data: Dividends Per Share of Common Stock.................................. 64 Market Price of Common Stock (High/Low).............................. 64 ITEM 6. SELECTED FINANCIAL DATA Five-Year Financial Review: Summary of Operations................................................ 65 Financial Position at Year End....................................... 65 General.............................................................. 65 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Letter to Stockholders................................................. 2,4*,5,7 Industry Segment Reviews: Chemicals............................................................ 20-21 Fibers............................................................... 21-23 Polymers............................................................. 23-24 Petroleum............................................................ 24-26 Diversified Businesses............................................... 27-28 Management's Discussion and Analysis: Analysis of Operations............................................... 30-31 Cash Flows and Financial Condition................................... 31-32 Environmental Matters................................................ 33-34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial Statements: Report of Independent Accountants..................................... 36 Consolidated Income Statement for 1993, 1992 and 1991................. 37 Consolidated Balance Sheet as of December 31, 1993 and December 31, 1992................................................................. 38 Consolidated Statement of Stockholders' Equity for 1993, 1992 and 1991................................................................. 39 Consolidated Statement of Cash Flows for 1993, 1992 and 1991.......... 40 Notes to Financial Statements......................................... 41-57 Supplemental Financial Information: Supplemental Petroleum Data: Oil-and-Gas Producing Activities.................................... 58-63 Quarterly Financial Data and related notes for the following items for the two years 1993 and 1992: Sales................................................................. 64 Cost of Goods Sold and Other Expenses................................. 64 Net Income (Loss)..................................................... 64 Earnings (Loss) Per Share of Common Stock............................. 64
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. - -------- * Exclude photograph and related caption on page 4. 14 PART III Information with respect to the following Items is incorporated by reference to the pages indicated in the company's 1994 Annual Meeting Proxy Statement dated March 18, 1994, filed in connection with the Annual Meeting of Stockholders to be held April 27, 1994. However, information regarding executive officers is contained in Part I of this report (page 13) pursuant to General Instruction G of this form. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
PAGE(S) ------- Election of Directors................................................... 4-8 Compliance With the Securities Exchange Act............................. 9 ITEM 11. EXECUTIVE COMPENSATION Compensation of Directors............................................... 2-3 Compensation and Stock Option Information............................... 12-13 Retirement Benefits..................................................... 14-15 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Beneficial Ownership of Securities...................................... 8-9 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Election of Directors................................................... 4-8
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Financial Statements, Financial Statement Schedules and Exhibits 1. Financial Statements (See listing at Part II, Item 8 of this report regarding financial statements, which are incorporated by reference to Exhibit 13.) 2. Financial Statement Schedules The following should be read in conjunction with the previously referenced Financial Statements:
ITEM PAGE ---- ---- Report of Independent Accountants on Financial Statement Schedules........ 19 Schedule V--Property, Plant and Equipment................................. 20 Schedule VI--Accumulated Depreciation, Depletion and Amortization of Prop- erty, Plant and Equipment................................................ 21 Footnotes to Schedules V and VI........................................... 22 Schedule VII--Guarantees of Securities of Other Issuers................... 23 Schedule IX--Short-Term Borrowings........................................ 24
Financial Statement Schedules listed under SEC rules but not included in this report are omitted because: a) they are not applicable; b) they are not required under the provisions of Regulation S-X; or c) the required information is shown in the financial statements or notes thereto incorporated by reference. Condensed financial information of the parent company is omitted because restricted net assets of consolidated subsidiaries do not exceed 25% of consolidated net assets. Footnote disclosure of restrictions on 15 the ability of subsidiaries and affiliates to transfer funds is omitted because the restricted net assets of subsidiaries combined with the company's equity in the undistributed earnings of affiliated companies does not exceed 25% of consolidated net assets at December 31, 1993. Separate financial statements of affiliated companies accounted for by the equity method are omitted because no such affiliate individually constitutes a 20% significant subsidiary. 3. EXHIBITS The following list of exhibits includes both exhibits submitted with this Form 10-K as filed with the SEC and those incorporated by reference to other filings:
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1 Company's Certificate of Incorporation, as last amended December 22, 1989 (incorporated by reference to Exhibit 3.1 of the company's Annual Report on Form 10-K for the year ended December 31, 1989). 3.2 Company's Bylaws, as last revised November 24, 1993. 4 The company agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of the company and its subsidiaries. 10.1 Amendment dated as of March 26, 1986 to, and restatement of, the Agreement dated as of October 2, 1981 between The Seagram Company Ltd. and the company (incorporated by reference to Exhibit 10.1 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.2* Company's Corporate Sharing Plan, as last amended August 28, 1991 (incorporated by reference to Exhibit 10.2 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 10.3* Company's Deferred Compensation Plan for Directors, as last amended November 21, 1986 (incorporated by reference to Exhibit 10.3 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 10.4* Company's Supplemental Retirement Income Plan, as last amended effective October 1, 1991 (incorporated by reference to Exhibit 10.4 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.5* Company's Pension Restoration Plan, as last amended effective October 1, 1991 (incorporated by reference to Exhibit 10.5 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.6* Retirement Restoration Plan of Conoco Inc., as last amended effective July 23, 1990 (incorporated by reference to Exhibit 10.6 of the company's Annual Report on Form 10-K for the year ended December 31, 1990). 10.7* Company's Stock Option Plan, as last amended effective April 29, 1992 (incorporated by reference to Exhibit 10.7 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 11 Statement re computation of earnings per share--assuming full dilution. 12 Statement re computation of the ratio of earnings to fixed charges. 13 The 1993 "Letter to Stockholders," Business Review Section, and Financial Information Section of the Annual Report to Shareholders for the year ended December 31, 1993, which are furnished to the Commission for information only, and not filed except as expressly incorporated by reference in this Report. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants.
- -------- * Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K. 16 (b) Reports on Form 8-K The following Current Report on Form 8-K was filed during the quarter ended December 31, 1993. (1) On October 27, 1993, a Current Report on Form 8-K was filed in connection with Debt Securities that may be offered on a delayed or continuous basis under its Registration Statements on Form S-3 (No. 33- 39161 and No. 33-48128). Under Item 7, "Financial Statements and Exhibits," the Registrant's Earnings Press Release, dated October 27, 1993 was filed. 17 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED AND IN THE CAPACITIES INDICATED, ON THE 18TH DAY OF MARCH, 1994. E. I. DU PONT DE NEMOURS AND COMPANY (Registrant) C. L. Henry By______________________________________ C. L. HENRY SENIOR VICE PRESIDENT--DUPONT FINANCE (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED ON THE 18TH DAY OF MARCH 1994, BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT IN THE CAPACITIES INDICATED: CHAIRMAN AND DIRECTOR (PRINCIPAL EXECUTIVE OFFICER): E. S. Woolard, Jr. - ------------------------- E. S. WOOLARD, JR. VICE CHAIRMAN AND VICE CHAIRMAN AND DIRECTOR: DIRECTOR: J. A. Krol C. S. Nicandros - ------------------------- ------------------------- J. A. KROL C. S. NICANDROS DIRECTORS: P. N. Barnevik L. C. Duemling M. P. MacKimm - ------------------------- ------------------------- ------------------------- P. N. BARNEVIK L. C. DUEMLING M. P. MACKIMM E. P. Blanchard, Jr. E. B. Du Pont W. K. Reilly - ------------------------- ------------------------- ------------------------- E. P. BLANCHARD, JR. E. B. DU PONT W. K. REILLY A. F. Brimmer C. M. Harper H. R. Sharp, III - ------------------------- ------------------------- ------------------------- A F. BRIMMER C. M. HARPER H. R. SHARP, III C. R. Bronfman R. E. Heckert C. M. Vest - ------------------------- ------------------------- ------------------------- C. R. BRONFMAN R. E. HECKERT C. M. VEST E. M. Bronfman H. W. Johnson J. L. Weinberg - ------------------------- ------------------------- ------------------------- E. M. BRONFMAN H. W. JOHNSON J. L. WEINBERG E. Bronfman, Jr. E. L. Kolber - ------------------------- ------------------------- E. BRONFMAN, JR. E. L. KOLBER 18 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES To the Stockholders and the Board of Directors of E. I. du Pont de Nemours and Company Our audits of the consolidated financial statements referred to in our report dated February 17, 1994 appearing on page 36 of the 1993 Annual Report to Stockholders of E. I. du Pont de Nemours and Company, (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PRICE WATERHOUSE Thirty South Seventeenth Street Philadelphia, Pennsylvania 19103 February 17, 1994 19 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT(a) FOR THE YEARS 1993, 1992 AND 1991 (DOLLARS IN MILLIONS) - ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C. COLUMN D COLUMN E COLUMN F - ------------------------------------------------------------------------------------ BALANCE AT OTHER BALANCE AT BEGINNING ADDITIONS CHANGES - END OF CLASSIFICATION OF YEAR AT COST RETIREMENTS ADD(DEDUCT)(b) YEAR - ------------------------------------------------------------------------------------ 1993 Chemicals............. $ 4,946 $ 294 $ 253 $ (3) $ 4,984 Fibers................ 9,875 751 308 (38) 10,280 Polymers.............. 7,567 428 292 39 7,742 Petroleum............. 17,499 1,659 1,460 -- 17,698 Diversified Business- es................... 5,504 329 571 3 5,265 Corporate............. 1,844 194 81 -- 1,957 ------- ------ ------- ------- ------- Total............... $47,235 $3,655 $ 2,965 $ 1 $47,926 ======= ====== ======= ======= ======= 1992 Chemicals............. $ 4,655 $ 366 $ 122 $ 47 $ 4,946 Fibers................ 9,344 856 280 (45) 9,875 Polymers.............. 7,142 642 203 (14) 7,567 Petroleum............. 16,248 1,781 529 (1) 17,499 Diversified Business- es................... 5,153 558 217 10 5,504 Corporate............. 1,649 194 2 3 1,844 ------- ------ ------- ------- ------- Total............... $44,191 $4,397 $ 1,353 $ -- $47,235 ======= ====== ======= ======= ======= 1991 Chemicals............. $ 4,406 $ 476 $ 160 $ (67) $ 4,655 Fibers................ 8,828 765 285 36 9,344 Polymers.............. 6,754 607 162 (57) 7,142 Petroleum............. 14,592 2,301 624 (21) 16,248 Diversified Business- es................... 8,658 680 343 (3,842) 5,153 Corporate............. 1,581 197 -- (129) 1,649 ------- ------ ------- ------- ------- Total............... $44,819 $5,026 $ 1,574 $(4,080) $44,191 ======= ====== ======= ======= =======
- -------- See page 22 for footnotes. 20 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT(a) FOR THE YEARS 1993, 1992 AND 1991 (DOLLARS IN MILLIONS) - -------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - -------------------------------------------------------------------------------------- ADDITIONS BALANCE AT CHARGED TO OTHER BALANCE AT BEGINNING COST AND CHANGES - END OF DESCRIPTION OF YEAR EXPENSES(b) RETIREMENTS ADD(DEDUCT)(c) YEAR - -------------------------------------------------------------------------------------- 1993 Chemicals............. $ 2,907 $ 303 $ 101 $ (2) $ 3,107 Fibers................ 6,166 658 306 (35) 6,483 Polymers.............. 4,403 527 428 37 4,539 Petroleum............. 8,188 1,339 942 -- 8,585 Diversified Business- es................... 2,999 460 446 -- 3,013 Corporate............. 690 124 38 -- 776 ------- ------ ------- ------- ------- Total............... $25,353 $3,411 $ 2,261 $ -- $26,503 ======= ====== ======= ======= ======= 1992 Chemicals............. $ 2,708 $ 317 $ 169 $ 51 $ 2,907 Fibers................ 5,908 592 281 (53) 6,166 Polymers.............. 4,196 409 197 (5) 4,403 Petroleum............. 7,398 985 195 -- 8,188 Diversified Business- es................... 2,782 410 204 11 2,999 Corporate............. 589 105 -- (4) 690 ------- ------ ------- ------- ------- Total............... $23,581 $2,818 $ 1,046 $ -- $25,353 ======= ====== ======= ======= ======= 1991 Chemicals............. $ 2,657 $ 294 $ 152 $ (91) $ 2,708 Fibers................ 5,633 566 279 (12) 5,908 Polymers.............. 3,918 445 146 (21) 4,196 Petroleum............. 6,748 927 271 (6) 7,398 Diversified Business- es................... 4,215 571 317 (1,687) 2,782 Corporate............. 546 98 -- (55) 589 ------- ------ ------- ------- ------- Total............... $23,717 $2,901 $ 1,165 $(1,872) $23,581 ======= ====== ======= ======= =======
- -------- See page 22 for footnotes. 21 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES (DOLLARS IN MILLIONS) SCHEDULE V--FOOTNOTES (a) See Property, Plant and Equipment (PP&E) in Note 1 to the company's Consolidated Financial Statements on page 41 of Exhibit 13 for accounting policy with respect to certain additions and retirements. (b) Principally reflects intersegment transfers. In addition, 1991 reflects restructuring of the coal business described in Note 6 on page 43 of Exhibit 13. SCHEDULE VI--FOOTNOTES (a) See Property, Plant and Equipment in Note 1 to the company's Consolidated Financial Statements on page 41 of Exhibit 13 for accounting policy with respect to the methods and rates used for depreciation, depletion and amortization. (b) The following reconciles the amounts shown herein as Additions Charged to Cost and Expenses and the amounts shown as Depreciation, Depletion and Amortization in the Consolidated Income Statement on page 37 of Exhibit 13.
1993 1992 1991 ------ ------ ------ Depreciation, Depletion and Amortization per Sched- ule VI............................................. $3,411 $2,818 $2,901 Included in Research and Development Expense........ (84) (85) (110) Impairment of Unproved Properties included in Exploration Expenses............................... (50) (66) (105) Provision for Dismantlement and Abandonment Costs... 40 21 16 Included in Restructuring Charges................... (484) (33) (62) ------ ------ ------ Per Consolidated Income Statement................... $2,833 $2,655 $2,640 ====== ====== ======
(c) Principally reflects intersegment transfers. In addition, 1991 reflects restructuring the coal business described in Note 6 on page 43 of Exhibit 13. 22 E.I DUPONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE VII--GUARANTEES OF SECURITIES OF OTHER ISSUERS AS OF DECEMBER 31, 1993 (DOLLARS IN MILLIONS) - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN F - -------------------------------------------------------------------------------- NAME OF ISSUER TITLE OF ISSUE OF SECURITIES OF EACH CLASS TOTAL AMOUNT NATURE GUARANTEED BY PERSON FOR OF SECURITIES GUARANTEED OF WHICH STATEMENT IS FILED GUARANTEED AND OUTSTANDING GUARANTEE(a) - -------------------------------------------------------------------------------- C&L Processors Partnership. Bank Loan $ 32 Principal & Interest Consol Energy Inc.......... Revenue Bonds 103(b) Principal Crosfield Electronics Lim- ited...................... Bank Loans 43 Principal & Interest Retail Facilities Loan Pro- gram...................... Bank Loans 27 Principal & Interest Jupiter Sulfur Inc......... Bank Loan 38 Principal & Interest Polar Lights Company....... Bank Loans 200 Principal & Interest
- -------- Note: Columns D, E and G have been omitted as the answers thereto were "none." (a) The annual aggregate amount of interest guaranteed is approximately $22. (b) DuPont has received a cross-guarantee for 50% of this amount from another party. 23 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SCHEDULE IX--SHORT-TERM BORROWINGS FOR THE YEARS 1993, 1992 AND 1991 (DOLLARS IN MILLIONS) - ------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - ------------------------------------------------------------------------------------------------- AT YEAR END DURING THE YEAR ------------------------- ---------------------------------------------- WEIGHTED WEIGHTED CATEGORY OF AVERAGE MAXIMUM AVERAGE AVERAGE SHORT-TERM BORROWINGS BALANCE INTEREST RATE(a) OUTSTANDING OUTSTANDING(b) INTEREST RATE(a)(b) - ------------------------------------------------------------------------------------------------- 1993 - ---- Commercial Paper(c)... $ 325 3.3% $3,363 $2,517 3.1% Bank Borrowings: --U.S. Dollars...... 25 4.9 216 133 6.6 --Other Currencies(d)(e)... 395 5.9 411 256 5.9 Master Notes(f)....... 495 3.2 533 427 3.1 1992 - ---- Commercial Paper(c)... $2,182 3.5% $3,038 $1,995 3.6% Bank Borrowings: --U.S. Dollars(g)... 169 3.9 169 52 4.2 --Other Currencies(h)(e)... 262 7.7 399 295 9.0 Master Notes(f)....... 570 3.6 883 515 3.7 1991 - ---- Commercial Paper(c)... $ 102 4.5% $3,174 $2,242 6.0% Bank Borrowings: --U.S. Dollars(i)... 21 2.8 842 829 6.2 --Other Currencies(e)...... 156 15.1 330 248 12.7 Master Note(f)........ 394 4.7 642 382 5.9
- -------- (a) Indicated interest rates exclude the effect of interest rate swap agreements that effectively convert floating rate borrowings to fixed rate borrowings. (b) Based on month-end data, except for commercial paper and master notes which are based on daily data, and certain non-U.S. subsidiary bank borrowings which are based on quarterly data. (c) Unsecured promissory notes with maturities not in excess of 270 days. (d) Includes 1,173 million Norwegian Krone borrowings (U.S. $158) with an average interest rate of 5.9%. (e) Average interest rates include the effect of borrowings in certain currencies where local inflation has resulted in relatively high interest rates. (f) Master notes were issued to U.S. banks and are payable on demand. (g) Includes $157 with a floating money market based interest rate. (h) Includes 200 million Australian dollar borrowings (U.S. $140) with a floating money market based interest rate. (i) Interest rates include the effect of a subsidiary's 0% interest export incentive financing. 24 E. I. DU PONT DE NEMOURS AND COMPANY INDEX OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1 Company's Certificate of Incorporation, as last amended December 22, 1989 (incorporated by reference to Exhibit 3.1 of the company's Annual Report on Form 10-K for the year ended December 31, 1989). 3.2 Company's Bylaws, as last revised November 24, 1993. 4 The company agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of the company and its subsidiaries. 10.1 Amendment dated as of March 26, 1986 to, and restatement of, the Agreement dated as of October 2, 1981 between The Seagram Company Ltd. and the company (incorporated by reference to Exhibit 10.1 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.2* Company's Corporate Sharing Plan, as last amended August 28, 1991 (incorporated by reference to Exhibit 10.2 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 10.3* Company's Deferred Compensation Plan for Directors, as last amended November 21, 1986 (incorporated by reference to Exhibit 10.3 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 10.4* Company's Supplemental Retirement Income Plan, as last amended effective October 1, 1991 (incorporated by reference to Exhibit 10.4 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.5* Company's Pension Restoration Plan, as last amended effective October 1, 1991 (incorporated by reference to Exhibit 10.5 of the company's Annual Report on Form 10-K for the year ended December 31, 1991). 10.6* Retirement Restoration Plan of Conoco Inc., as last amended effective July 23, 1990 (incorporated by reference to Exhibit 10.6 of the company's Annual Report on Form 10-K for the year ended December 31, 1990). 10.7* Company's Stock Option Plan, as last amended effective April 29, 1992 (incorporated by reference to Exhibit 10.7 of the company's Annual Report on Form 10-K for the year ended December 31, 1992). 11 Statement re computation of earnings per share--assuming full dilution. 12 Statement re computation of the ratio of earnings to fixed charges. 13 The 1993 "Letter to Stockholders," Business Review Section, and Financial Information Section of the Annual Report to Shareholders for the year ended December 31, 1993, which are furnished to the Commission for information only, and not filed except as expressly incorporated by reference in this Report. 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants.
- -------- * Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K. EX-3.2 2 BYLAWS EXHIBIT 3.2 BYLAWS OF E. I. DU PONT DE NEMOURS AND COMPANY INCORPORATED UNDER THE LAWS OF DELAWARE AS REVISED November 24, 1993 BYLAWS
PAGE ---- ARTICLE I. MEETING OF STOCKHOLDERS: Section 1. Annual....................................................... 1 Section 2. Special...................................................... 1 Section 3. Notice....................................................... 1 Section 4. Quorum....................................................... 1 Section 5. Organization................................................. 1 Section 6. Voting....................................................... 1 Section 7. Inspectors................................................... 1 ARTICLE II. BOARD OF DIRECTORS: Section 1. Number....................................................... 2 Section 2. Term......................................................... 2 Section 3. Increase of Number........................................... 2 Section 4. Resignation.................................................. 2 Section 5. Vacancies.................................................... 2 Section 6. Regular Meetings............................................. 2 Section 7. Special Meetings............................................. 2 Section 8. Quorum....................................................... 2 Section 9. Place of Meeting, Etc........................................ 2 Section 10 Interested Directors; Quorum................................. 2 ARTICLE III. COMMITTEES OF THE BOARD: Section 1. Committees................................................... 3 Section 2. Procedure.................................................... 3 Section 3. Reports to the Board......................................... 3 Section 4. Strategic Direction Committee................................ 3 Section 5. Audit Committee.............................................. 3 Section 6 Environmental Policy Committee............................... 3 Section 7. Compensation and Benefits Committee.......................... 3 ARTICLE IV. OFFICE OF THE CHAIRMAN.................................................... 4 ARTICLE V. OFFICERS: Section 1. Officers Section 2. Chairman of the Board........................................ 4 Section 3. Vice Chairmen................................................ 4 Section 4. Vice Presidents.............................................. 4 Section 5. Senior Vice President--Finance............................... 4 Section 6. Treasurer.................................................... 4 Section 7. Assistant Treasurer.......................................... 4 Section 8. Controller................................................... 4 Section 9. Assistant Controller......................................... 5 Section 10. Secretary.................................................... 5 Section 11. Assistant Secretary.......................................... 5 Section 12. Removal...................................................... 5 Section 13. Resignation.................................................. 5 Section 14. Vacancies.................................................... 5
ARTICLE VI.
PAGE ---- MISCELLANEOUS: Section 1. Indemnification of Directors or Officers...................... 5 Section 2. Certificate for Shares........................................ 5 Section 3. Transfer of Shares............................................ 6 Section 4. Regulations................................................... 6 Section 5. Record Date of Stockholders................................... 6 Section 6. Corporate Seal................................................ 6 ARTICLE VII. AMENDMENTS................................................................ 6
BYLAWS OF E. I. DU PONT DE NEMOURS AND COMPANY ARTICLE I. MEETING OF STOCKHOLDERS Section 1. Annual. Meetings of the stockholders for the purpose of electing Directors, and transacting such other proper business as may be brought before the meeting, shall be held annually at such date, time and place, within or without the State of Delaware as may be designated by the Board of Directors ("Board"). Section 2. Special. Special meetings of the stockholders may be called by the Board and shall be called by the Secretary at the request in writing of the holders of record of at least twenty-five percent of the outstanding stock of the corporation entitled to vote. Special meetings shall be held within or without the State of Delaware, as the Board shall designate. Section 3. Notice. Written notice of each meeting of stockholders, stating the place, date and hour of the meeting, and the purpose or purposes thereof, shall be mailed not less than ten nor more than sixty days before the date of such meeting to each stockholder entitled to vote thereat. Section 4. Quorum. Unless otherwise provided by statute, the holders of shares of stock entitled to cast a majority of votes at a meeting, present either in person or by proxy, shall constitute a quorum at such meeting. Absence of a quorum of the holders of Common Stock or Preferred Stock at any meeting or adjournment thereof, at which under the Certificate of Incorporation the holders of Preferred Stock have the right to elect any Directors, shall not prevent the election of Directors by the other class of stockholders entitled to elect Directors as a class if the necessary quorum of stockholders of such other class shall be present in person or by proxy. Section 5. Organization. The Chairman of the Board or, in the Chairman's absence, a Vice Chairman shall preside at meetings of stockholders. The Secretary of the Company shall act as Secretary of all meetings of the stockholders, but in the absence of the Secretary the presiding officer may appoint a Secretary of the meeting. The order of business for such meetings shall be determined by the Chairman of the Board, or, in the Chairman's absence, by a Vice Chairman. Section 6. Voting. Each stockholder entitled to vote at any meeting shall be entitled to one vote, in person or by written proxy, for each share held of record. Upon the demand of any stockholder, such stockholder shall be entitled to vote by ballot. All elections and questions shall be decided by plurality vote, except as otherwise required by statute. Section 7. Inspectors. At each meeting of the stockholders the polls shall be opened and closed; the proxies and ballots shall be received and be taken in charge, and all questions touching the qualification of voters and the validity of proxies, and the acceptance or rejection of votes shall be decided by three Inspectors, two of whom shall have power to make a decision. Such Inspectors shall be appointed by the Board before the meeting, or in default thereof, by the presiding officer at the meeting, and shall be sworn to the faithful performance of their duties. If any of the Inspectors previously appointed shall fail to attend or refuse or be unable to serve, substitutes shall be appointed by the presiding officer. 1 ARTICLE II. BOARD OF DIRECTORS Section 1. Number. The business and affairs of the Company shall be under the direction of the Board. The number of Directors, which shall not be less than ten, shall be determined from time to time by the vote of two-thirds of the whole Board. Section 2. Term. Each Director shall hold office until the next annual election of Directors and until the Director's successor is elected and qualified. Section 3. Increase of Number. In case of any increase in the number of Directors between Annual Meetings of Stockholders, each additional Director shall be elected by the vote of two-thirds of the whole Board. Section 4. Resignation. A Director may resign at any time by giving written notice to the Chairman of the Board or the Secretary. The acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof. Section 5. Vacancies. In case of any vacancy in the Board for any cause, the remaining Directors, by vote of majority of the whole Board, may elect a successor to hold office for the unexpired term of the Director whose place is vacant. Section 6. Regular Meetings. Regular meetings of the Board shall be held at such times as the Board may designate. A notice of each regular meeting shall not be required. Section 7. Special Meetings. Special meetings of the Board shall be held whenever called by the direction of the Chairman of the Board, or of one-third of the Directors. The Secretary shall give notice of such special meetings by mailing the same at least two days before the meeting, or by telegraphing the same at least one day before the meeting to each Director; but such notice may be waived by any Director. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. At any meeting at which every Director shall be present, any business may be transacted, irrespective of notice. Section 8. Quorum. One-third of the Board shall constitute a quorum. If there be less than a quorum present at any meeting, a majority of those present may adjourn the meeting from time to time. Except as otherwise provided by law, the Certificate of Incorporation, or by these Bylaws, the affirmative vote of a majority of the Directors present at any meeting at which there is a quorum shall be necessary for the passage of any resolution. Section 9. Place of Meeting, Etc. The Directors shall hold the meetings, and may have an office or offices in such place or places within or outside the State of Delaware as the Board from time to time may determine. Section 10. Interested Directors; Quorum 1) No contract or other transaction between the Company and one or more of its Directors, or between the Company and any other corporation, partnership, association, or other organization in which one or more of the Directors of the Company is a Director or officer, or has a financial interest, shall be void or voidable, because the Director is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction, or solely because such Director's vote is counted for such purpose, if: 2 (a) The material facts as to such Director's relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum; or (b) The material facts as to such Director's relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) The contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board, a committee thereof, or the stockholders; and 2) Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction. ARTICLE III. COMMITTEES OF THE BOARD Section 1. Committees. The Board shall by the affirmative vote of a majority of the whole Board, elect from the Directors a Strategic Direction Committee, an Audit Committee, an Environmental Policy Committee, and a Compensation and Benefits Committee, and may, by resolution passed by a majority of the whole Board, designate one or more additional committees, each committee to consist of one or more Directors. The Board shall designate for each of these committees a Chairman, and, if desired, a Vice Chairman, who shall continue as such during the pleasure of the Board. The number of members of each committee shall be determined from time to time by the Board. Section 2. Procedure. Each Committee shall fix its own rules of procedure and shall meet where and as provided by such rules. A majority of a committee shall constitute a quorum. In the absence or disqualification of a member of any committee, the members of such committee present at any meeting, and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Section 3. Reports To The Board. Each Committee shall keep regular minutes of its proceedings and shall periodically report to the Board summaries of the Committee's significant completed actions and such other matters as requested by the Board. Section 4. Strategic Direction Committee. The Strategic Direction Committee shall review the Company's strategic direction and overall objectives and shall have such powers and perform such duties as may be assigned to it from time to time by the Board. Section 5. Audit Committee. The Audit Committee shall employ independent public accountants, subject to stockholder ratification at each annual meeting, review the adequacy of internal accounting controls and the accounting principles employed in financial reporting, and shall have such power and perform such duties as may be assigned to it from time to time by the Board. None of the Members of the Audit Committee shall be an officer or employee of the Company or its subsidiaries. Section 6. Environmental Policy Committee. The Environmental Policy Committee shall review the Company's environmental policies and practices and shall have such powers and perform such duties as may be assigned to it from time to time by the Board. Section 7. Compensation and Benefits Committee. The Compensation and Benefits Committee shall have the power and authority vested in it by the Compensation Plans of the Company and shall have such powers and perform such duties as may be assigned to it from time to time by the Board. None of the members of the Compensation and Benefits Committee shall be an officer or employee of the Company or its subsidiaries. 3 ARTICLE IV. OFFICE OF THE CHAIRMAN The Board shall elect an Office of the Chairman whose members shall include the Chairman of the Board, the Vice Chairmen, and such other officers as may be designated by the Board. The Office of the Chairman shall have responsibility for the strategic direction and operations of all the businesses of the Company and shall have such powers and perform such duties as may be assigned to it from time to time by the Board. All significant completed actions by the Office of the Chairman shall be reported to the Board at the next succeeding Board meeting, or at its meeting held in the month following the taking of such action. ARTICLE V. OFFICERS Section 1. Officers. The officers of the Company shall be a Chairman of the Board, one or more Vice Chairmen, a Senior Vice President--Finance and a Secretary. The Board and the Office of the Chairman, may appoint such other officers as they deem necessary, who shall have such authority and shall perform such duties as may be prescribed, respectively, by the Board or the Office of the Chairman. Section 2. Chairman of the Board. The Chairman of the Board shall be the chief executive officer of the Company and subject to the Board and the Office of the Chairman, the Chairman shall have general charge of the business and affairs of the Company. The Chairman shall preside at all meetings of the stockholders and of the Board. The Chairman may sign and execute all authorized bonds, contracts or other obligations, in the name of the Company, and with the Treasurer may sign all certificates of the shares in the capital stock of the Company. Section 3. Vice Chairmen. The Vice Chairmen shall have such powers and perform such duties as may be assigned to the Vice Chairmen by the Chairman of the Board. In the absence or inability to act of the Chairman of the Board, a Vice Chairman shall perform the duties of the Chairman of the Board. Section 4. Vice Presidents. The Board or the Office of the Chairman may appoint one or more Vice Presidents. Each Vice President shall have such title, powers and duties as may be assigned to such Vice President by the Board or the Office of the Chairman. Section 5. Senior Vice President--Finance. The Senior Vice President--Finance shall be the chief financial officer of the Company, and shall have such powers and perform such duties as may be assigned to such Senior Vice President-- Finance by the Board or the Office of the Chairman. Section 6. Treasurer. The Board shall appoint a Treasurer. Under the general direction of the Senior Vice President--Finance, the Treasurer shall have such powers and perform such duties as may be assigned to such Treasurer by the Board or the Office of the Chairman. Section 7. Assistant Treasurer. The Board or the Office of the Chairman may appoint one or more Assistant Treasurers. Each Assistant Treasurer shall have such powers and shall perform such duties as may be assigned to such Assistant Treasurer by the Board or the Office of the Chairman. Section 8. Controller. The Board may appoint a Controller. Under the general direction of the Senior Vice President--Finance, the Controller shall have such powers and perform such duties as may be assigned to such Controller by the Board or the Office of the Chairman. 4 Section 9. Assistant Controller. The Board or the Office of the Chairman may appoint one or more Assistant Controllers. Each Assistant Controller shall have such powers and shall perform such duties as may be assigned to such Assistant Controller by the Board or the Office of the Chairman. Section 10. Secretary. The Secretary shall keep the minutes of all the meetings of the Board and the minutes of all the meetings of the stockholders; the Secretary shall attend to the giving and serving of all notices of meetings as required by law or these Bylaws; the Secretary shall affix the seal of the Company to any instruments when so required; and the Secretary shall in general perform all the corporate duties incident to the office of Secretary, subject to the control of the Board or the Chairman of the Board, and such other duties as may be assigned to the Secretary by the Board or the Chairman of the Board. Section 11. Assistant Secretary. The Board or the Office of the Chairman may appoint one or more Assistant Secretaries. Each Assistant Secretary shall have such powers and shall perform such duties as may be assigned to such Assistant Secretary by the Board or the Chairman of the Board or a Vice Chairman; and such Assistant Secretary shall affix the seal of the Company to any instruments when so required. Section 12. Removal. All officers may be removed or suspended at any time by the vote of the majority of the whole Board. All officers, agents and employees, other than officers elected or appointed by the Board, may be suspended or removed by the committee or by the officer appointing them. Section 13. Resignation. Any officer may resign at any time by giving written notice to the Chairman of the Board, a Vice Chairman or the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof. Section 14. Vacancies. A vacancy in any office shall be filled in the same manner as provided for election or appointment to such office. ARTICLE VI. MISCELLANEOUS Section 1. Indemnification of Directors or Officers. Each person who is or was a Director or officer of the Company (including the heirs, executors, administrators or estate of such person) shall be indemnified by the Company as of right to the full extent permitted by the General Corporation Law of Delaware against any liability, cost or expense asserted against such Director or officer and incurred by such Director or officer by reason of the fact that such person is or was a Director or officer. The right to indemnification conferred by this Section shall include the right to be paid by the Company the expenses incurred in defending in any action, suit or proceeding in advance of its final disposition, subject to the receipt by the Company of such undertakings as might be required of an indemnitee by the General Corporation Law of Delaware. In any action by an indemnitee to enforce a right to indemnification hereunder or by the Company to recover advances made hereunder, the burden of proving that the indemnitee is not entitled to be indemnified shall be on the Company. In such an action, neither the failure of the Company (including its Board, independent legal counsel or stockholders) to have made a determination that indemnification is proper, nor a determination by the Company that indemnification is improper, shall create a presumption that the indemnitee is not entitled to be indemnified or, in the case of such an action brought by the indemnitee, be a defense thereto. If successful in whole or in part in such an action, an indemnitee shall be entitled to be paid also the expense of prosecuting or defending same. The Company may, but shall not be obligated to, maintain insurance at its expense, to protect itself and any such person against any such liability, cost or expense. Section 2. Certificate for Shares. The certificate for shares of the capital stock of the Company shall be in such form, not inconsistent with the Certificate of Incorporation as shall be prescribed by the Board. 5 Every stockholder shall have a certificate signed by the Chairman of the Board or a Vice Chairman, and the Treasurer, certifying the number of shares owned by such stockholder in the Company, provided that if any such certificate is countersigned by a transfer agent or registrar other than the Company or its employee, then and other signature on the certificate may be a facsimile. The name of the person owning the shares represented thereby, with the number of such shares and the date of issue, shall be entered on the Company's books. All certificates surrendered to the Company shall be cancelled, and no new certificates shall be issued until the former certificate for the same number of shares of the same class shall have been surrendered and cancelled, except that the Board may determine, from time to time, the conditions and provisions on which new certificates may be used in substitution of any certificates that may have been lost, stolen or destroyed. Section 3. Transfer of Shares. Shares in the capital stock of the Company shall be transferred by the record holder thereof, in person, or by any such person's attorney upon surrender and cancellation of certificates for a like number of shares. Section 4. Regulations. The Board also may make rules and regulations concerning the issue, transfer and registration of certificates for shares of the capital stock of the Company. The Board may appoint one or more transfer agents and one or more registrars of transfers, and may require all stock certificates to bear the signature of a transfer agent and a registrar of transfer. Section 5. Record Date of Stockholders. The Board may fix in advance a date, not exceeding sixty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend or other distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend or other distribution, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, and in such case only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive any such dividend or other distribution, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Company after such record date fixed as aforesaid. Section 6. Corporate Seal. The seal of the Company shall be circular in form, containing the words "E. I. DU PONT DE NEMOURS AND CO." and "DELAWARE" on the circumference, surrounding the words "FOUNDED" and "SEAL," and the date "1802." The seal shall be in the custody of the Secretary. A duplicate of the seal may be kept and used by the Senior Vice President--Finance, any Vice President, DuPont Finance, the Treasurer, or by any Assistant Secretary or Assistant Treasurer. ARTICLE VII. AMENDMENTS The Board shall have the power to adopt, amend and repeal the Bylaws of the Company, by a vote of the majority of the whole Board, at any regular or special meeting of the Board, provided that notice of intention to adopt, amend or repeal the Bylaws in whole or in part shall have been given at the next preceding meeting, or, without any such notice, by the vote of two-thirds of the whole Board. I hereby certify that the foregoing is a true and correct copy of the Bylaws of E. I. du Pont de Nemours and Company. Witness my hand and the corporate seal of the Company this day of 19 . _____________________________________ Secretary 6 EX-11 3 STMT EARNINGS PER SHARE EXHIBIT 11 E. I. DU PONT DE NEMOURS AND COMPANY EARNINGS PER SHARE--ASSUMING FULL DILUTION (DOLLARS IN MILLIONS, EXCEPT PER SHARE)
YEARS ENDED DECEMBER 31 ------------------------------------------------------------ 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- Earnings (loss) on com- mon stock.............. $ 545 $ (3,937) $ 1,393 $ 2,300 $ 2,470 Adjustments required for dividend equivalent payments and stock appreciation rights (net of tax)........... -- -- 1 (2) 2 Adjustments required for interest on convertible debt(a)................ -- -- -- 15 -- ----------- ----------- ----------- ----------- ----------- Adjusted earnings (loss) on common stock........ $ 545 $ (3,937) $ 1,394 $ 2,313 $ 2,472 =========== =========== =========== =========== =========== Average number of shares outstanding (excludes shares in treasury).... 676,622,115 673,454,935 670,743,786 675,960,751 700,505,538 Adjustments required for awarded but undelivered shares under the Variable Compensation Plan (average), stock options, and stock appreciation rights(b). 3,785,582 -- 4,740,453 1,951,293 2,562,918 Adjustments required for convertible debt(a) ... -- -- -- 5,404,509 -- ----------- ----------- ----------- ----------- ----------- Adjusted average number of common shares....... 680,407,697 673,454,935 675,484,239 683,316,553 703,068,456 =========== =========== =========== =========== =========== Earnings (loss) per share--assuming full dilution............... $ .80 $ (5.85) $ 2.06 $ 3.38 $ 3.52 =========== =========== =========== =========== =========== Earnings (loss) per share--as published.... $ .81 $ (5.85) $ 2.08 $ 3.40 $ 3.53 =========== =========== =========== =========== ===========
- -------- (a) The Zero Coupon Convertible Subordinated Notes were retired during 1992. 1991 versus 1990 convertible debt was outstanding for the entire year; as a result, conversion was antidilutive, and no adjustment was required in 1991. (b) In 1992, these adjustments are not considered for the fully diluted earnings per share calculation due to their antidilutive effect. EX-12 4 STMT COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 E. I. DU PONT DE NEMOURS AND COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLARS IN MILLIONS)
YEARS ENDED DECEMBER 31 -------------------------------------- 1993 1992 1991 1990 1989 ------ ------ ------ ------ ------ Income Before Extraordinary Item and Transition Effect of Accounting Changes......... $ 566 $ 975 $1,403 $2,310 $2,480 Provision for Income Taxes............ 392 836 1,415 1,844 1,844 Minority Interests in Earnings of Con- solidated Subsidiaries............... 5 10 6 3 24 Adjustment for Companies Accounted for by the Equity Method................. 41 6 35 29 38 Capitalized Interest.................. (194) (194) (197) (161) (108) Amortization of Capitalized Interest.. 144 101 94 84 78 ------ ------ ------ ------ ------ 954 1,734 2,756 4,109 4,356 ------ ------ ------ ------ ------ Fixed Charges: Interest and Debt Expense--Borrowings. 594 643 752 773 586 Adjustment for Companies Accounted for by the Equity Method--Interest and Debt Expense......................... 42 62 11 9 23 Capitalized Interest.................. 194 194 197 161 108 Rental Expense Representative of In- terest Factor........................ 143 151 162 163 149 ------ ------ ------ ------ ------ 973 1,050 1,122 1,106 866 ------ ------ ------ ------ ------ Total Adjusted Earnings Available for Payment of Fixed Charges............. $1,927 $2,784 $3,878 $5,215 $5,222 ====== ====== ====== ====== ====== Number of Times Fixed Charges Are Earned............................... 2.0 2.7 3.5 4.7 6.0 ====== ====== ====== ====== ======
EX-13 5 1993 DUPONT ANNUAL REORT Exhibit 13 To Our Stockholders In 1993 we accelerated our unrelenting drive to become the most successful, customer-focused chemical and energy company in the world. We made excellent progress on many fronts even though world economic conditions remained very unfavorable and our industries continued to experience extensive excess capacity. We enter 1994 with strong momentum primarily because our employees understand the reality of this hostile environment and have made outstanding efforts to strengthen our businesses worldwide. I am extremely grateful for the determined spirit exhibited by our people in this time of great uncertainty. Excluding nonrecurring items, our earnings were up 25 percent compared to the prior year even though sales declined. Strong cash management allowed us to reduce total borrowings by more than $1 billion. Our net income for 1993 was $555 million, or $.81 per share, compared with a loss for 1992 of $3,927 million, or $5.85 per share. Excluding nonrecurring items from both years and one-time charges in 1992 for adoption of new accounting standards, 1993 earnings were $1,677 million, or $2.46 per share, compared to $1,341 million, or $1.98 per share, earned last year. Total sales for 1993 were $37.1 billion, down 2 percent versus 1992. We benefited significantly from a strong performance by Petroleum operations. Excluding one-time items, Conoco earnings increased more than 70 percent in spite of low crude oil prices. We also saw gains in the Diversified Businesses segment where earnings increased 146 percent excluding nonrecurring items and coal results, which were adversely affected by a strike. This reflects strong results from crop protection chemicals and cost improvements in printing and publishing. Clearly, the cash management and productivity improvement strategies we implemented during the last few years are paying off. We still have a considerable way to go, however, in accomplishing the total company transformation that I discussed in last year's annual report. But in 1993 we made substantial progress in every key area of transformation emphasis. Consider some highlights: In our continuing effort to globalize our strongest businesses, we completed the purchase of ICI's nylon operations, which now gives us a leadership position in Europe. We formed an alliance with Asahi to enhance our nylon opportunities in Asia. Conoco is involved in an ambitious petroleum development venture in Russia, the Polar Lights project. DuPont and Kirovo- Chepetsk Chemical Enterprise in Russia formed a joint venture to market fluoropolymer products worldwide. We formed a joint venture to manufacture electronic materials for microcircuits to help accelerate growth in China's electronics industry. A new plant, expected to be the most advanced manufacturing facility of its kind in China, will start up in the third quarter of 1995. Last year also saw a marked improvement in productivity as we achieved a 6 percent gain. Cost reduction programs we have been pursuing since 1991 have yielded good results with regard to fixed 2 costs and spending rates. Currently our European operations are engaged in a $500 million cost reduction program, which will be completed by the end of 1994. Regarding business focus, we divested a number of businesses including connectors, acrylics and Remington Arms. These divestitures follow others of recent years and represent our decision to focus intently on businesses where we have clear competitive advantage and technological strength. Conoco completed a number of transactions to strengthen our petroleum portfolio, most significantly the trade of our Milne Point field in Alaska and some exploration acreage for an interest in a British Petroleum-operated producing field in the Gulf of Mexico. One superb advantage we have for improving both productivity and business focus is DuPont research. Much of our R&D is aimed at improving the quality, speed and efficiency of manufacturing processes vital to our competitiveness. Another substantial portion of our research dollar goes to improving our product offerings in existing markets. We are also maintaining our commitment to discovery research, which is essential to our future. DuPont's success in the 20th century has been made possible by innovative science. Leadership in science and technology will continue to be an indispensable element of our business strategy. 4 In terms of our environmental commitment, we continued to make outstanding progress. In the United States, preliminary estimates indicate we have reduced emissions of air toxics by 60 percent and airborne carcinogens by 70 percent compared to 1987 base year figures. We met U.S. EPA's voluntary 33/50 interim goal with a 33 percent reduction of 17 large volume toxic materials. Of 740 million pounds of packaging materials shipped to customers, 230 million pounds or 30 percent were returned for reuse or recycling. Conoco placed two more double-hulled tankers into service; double-hulled vessels now make up half our fleet. More than 120 double-walled underground storage tanks have been installed at Conoco-owned service stations. A detailed discussion of our environmental performance is available in our 1993 Environmental Progress Report. As indicated earlier, last year was a particularly challenging time for our people. Cost reductions have resulted in the elimination of more than 20,000 jobs since 1991. It has been painful to see dedicated and talented people depart the company, even though we all are aware that the economic realities we face leave no other choice. While more consolidations are likely to occur, we believe that most of the across-the-board "downsizing" is accomplished. Throughout the company I am increasingly encountering examples of individual initiative and team spirit that a leaner organization encourages and makes possible. As our employees grow accustomed to the pace of change that will be a permanent fact of life in 21st century business, we are holding fast to our core value of treating every individual with respect and dignity. In an era of stiff global competition, an employer is responsible for creating a workplace in which people can grow and maintain their employability in the face of the change and dislocation that will characterize all global companies in the years ahead. Security comes only from providing superior value to customers. We encourage our people to be resourceful, to seize present opportunities and to create new ones. This is the formula for a successful future for the company and for ourselves. A significant action taken in 1993 involved restructuring the company to eliminate the large sectors or departments into which we had historically grouped our businesses. The company now is organized into business units which are smaller, more flexible and less encumbered by the bureaucracy and costs that the sector staff and structure represented. The streamlined operational structure of the company is represented by the businesses listed on the chart on the inside front cover of this report. The new structure permits each business and every employee to focus on the customer and be more responsive to customer needs. The feedback we've received from customers has been very encouraging. Also in 1993, the first trials in the litigation involving our "Benlate" DF 50 fungicide were held; others are ongoing. To date, more than 60 cases have been disposed of by settlement, summary judgment in our favor or dismissal. Jury verdicts have been returned against the company, but for an average of less than a third of the compensatory damages claimed by the plaintiffs. We are appealing those. We also recently had one jury verdict for the company. Based on our science, we are convinced that our product did not cause any damage and that it is safe when applied at label rates. Overall, 1993 was a time in which our transformation process shifted into a higher gear. Our performance in the face of hostile economic conditions in major markets underscored that the company is financially strong; we expect these economic conditions to continue. However, we are positioned to show improvement even if current conditions remain unchanged, and we have strong upside potential when growth accelerates in the U.S. or the economies of Europe and Japan begin to recover. 5 What's ahead for 1994? We are in a period of rapid change and uncertainty. We face many smaller, flexible rapid-response companies around the world. In such an environment our focus has to be on the customer. In these circumstances we state our objectives in terms of performance. Our overall goal is focused, profitable growth achieved through a combination of healthy businesses and committed, enthusiastic employees. We seek to provide our shareholders with an average 15 percent total annual return while posting a 20 percent return on equity and a 10 percent annual growth in earnings through a business cycle. Each of our businesses has clear financial and growth objectives to support these corporate objectives. We're also devoting careful attention to portfolio management. We have determined certain business characteristics that are fundamental to our strategy. DuPont's businesses in the next century will be science-based where we have a clear technological advantage; in which the size and scope of the business and its ability to grow are meaningful to a company as large as DuPont; and in which we know we can be competitive and win on a global basis. It goes without saying that our businesses will also be able to achieve the high levels of safety and environmental performance, and maintain the other values that we have traditionally set for ourselves here at DuPont. Our experiences during the past two years are reminders that focusing on fundamentals works. In particular, focusing on the customer always works. But we can't be successful unless our people are also committed and enthusiastic. Our businesses know the importance of building winning teams. Only people can make sure that DuPont offers the lowest cost, the best product, the fastest and most efficient service -- all hallmarks of a successful global competitor. I have never seen a more dynamic period for world business than in the past two years. It has not been an easy time, and it has sometimes been a painful time. But there is no question that the actions we are taking are beginning to pay large dividends which will become more apparent in the months ahead. We communicated this last dynamism last year in our annual report, which generated some controversy as we graphically signaled the bold step change necessary for future success. In this year's annual report, we are featuring a series of attributes that describe both healthy businesses and committed, enthusiastic employees. Our people tell this story in their own words and through their own accomplishments. This report once again reflects the exciting environment of a company that has embraced change and is determined to win. EDGAR S. WOOLARD, JR. Chairman February 24, 1994 7 Business Review - ------------------------------------------------------------------------------- chemicals --------- . Chemicals manufactures a wide range of commodity and specialty products, including titanium dioxide, fluorochemicals and polymer intermediates, used in the paper, plastics, chemical processing, refrigeration, textile and environmental management industries. Under an initiative begun last year, these businesses are grouped into strategic business units (see chart inside front cover*). =================================== SALES ----------------------------- ($ in billions) 1991 1992 1993 3.5 3.6 3.5 ATOI ----------------------------- ($ in millions) 1991 1992 1993 316 226 166 ----------------------------------- Despite difficult economic conditions, Chemicals pressed forward with its strategy to increase DuPont's global presence in key businesses such as titanium dioxide and nylon intermediates, and pursue growth opportunities in fluorochemicals and specialty intermediates. As part of this strategy, construction was largely completed during the year on the "Ti-Pure" titanium dioxide facility in Kuan Yin, Taiwan; some commercial production began in January 1994 and full start-up is scheduled for May. DuPont is the world's largest producer of titanium dioxide, a white pigment used in paper, paint and plastics. In nylon intermediates, construction of a world-scale adipic acid plant in Singapore increases our presence in Asia Pacific. Some production is scheduled to start at the new Singapore plant later this year and full start- up is planned for 1995. There is growing demand in Asia Pacific for adipic acid, a key building block for nylon and polyurethanes. The addition of a nylon intermediates plant as a result of the acquisition of ICI's nylon business enhances our position in Europe. Among other major developments during the year, we started up the world's largest hydrofluorocarbon-134a plant at Corpus Christi, Texas, bringing our total capacity of this chlorofluorocarbon (CFC) substitute to more than 110 million pounds a year, including production in Ponca City, Oklahoma, and Chiba, Japan. We are an industry leader in CFC alternatives, with a full line of refrigerant products marketed under the "Suva" trademark. These products have zero or significantly reduced ozone depletion potential. Also during the year, Chemicals continued with business restructuring and other cost-reduction initiatives. The results of these efforts began to show up toward the end of the year, with an improvement in fourth-quarter performance. 1993 VERSUS 1992 Sales were down 2 percent, primarily from lower U.S. volume. Additional sales volume from acquisitions outside the United States was offset by lower prices, largely due to the currency effects of a stronger dollar. After-tax operating income (ATOI) was 27 percent lower than the prior year, resulting from higher nonrecurring charges for facility shutdowns, employee separation and other business restructuring. Excluding these charges from both years, ATOI was $282 million, up 2 percent from $277 million in 1992. This reflects improvements in specialty chemicals, intermediates and fluorochemicals. These improvements were principally from lower costs, partly offset by lower earnings from white pigment, which experienced declining prices for most of the year despite increases in volume. *This chart is not incorporated by reference in this Report. 20 1992 VERSUS 1991 Sales were up 4 percent, with higher sales volume outside the United States partly offset by lower prices. ATOI declined 28 percent. Excluding a 1992 charge of $49 million from accounting changes, and nonrecurring items from both years, earnings were up 9 percent reflecting improvements in nylon intermediates and a number of other basic and specialty chemicals businesses. OUTLOOK Cost reduction and other steps taken to enhance efficiency have put Chemicals in position for improved financial performance, especially in the event of renewed vigor in major world economies. In particular, the market for DuPont white pigment is improving as demand increases for high-quality titanium dioxide produced by our proprietary technology. However, while we have significantly reduced our production of CFCs, we continue to be disappointed by the market's slower than anticipated transition away from CFCs to the more environmentally acceptable alternatives. - ------------------------------------------------------------------------------- fibers ------------- . A diversified mix of specialty fibers is produced to serve end uses ranging from high-strength composites in aerospace to protective apparel, active sportswear and packaging. High-volume fibers are produced for apparel and home fabrics, carpeting and industrial applications, and sold directly to the textile and other industries for processing into products used in consumer and industrial markets. Under an initiative begun last year, these businesses are grouped into strategic business units (see chart inside front cover*). Fibers continued to pursue three long-term strategies: grow through improved quality, service, cost, innovation, and strategic acquisition; penetrate new high-growth worldwide markets; and develop and promote new high-technology fiber and resin products to replace traditional materials such as metals. The global nylon business -- including the newly acquired nylon business of ICI-- was restructured to meet customer needs with fewer people, improved productivity and less capital investment. We are aiming for global revenue growth. "Lycra" spandex intensified its development of new products and end- use markets globally. It also invested in processes and systems to further enhance quality. The newest "Lycra" plant in Singapore became a world-class performer after only six months of operation. Two new, fully automated, modern polyester filament production lines -- the cornerstone of the "Dacron" modernization program -- will be operating at the Kinston, North Carolina, plant by the end of 1994, adding approximately 100 million pounds of capacity. In flooring systems, we continued with business restructuring aimed at becoming the low-cost producer. Fixed costs were significantly reduced while markets strengthened -- particularly the U.S. commercial carpet business. Three new consumer brands were launched -- "DuPont Approved Stainmaster Plus", "DuPont Approved Masterlife", and "DuPont Approved Grand Luxura". A national network of 3,000 top carpet retailers -- known as "DuPont Approved MasterStores" -- was created; the network includes only retailers who offer the full line of DuPont-branded products. *This chart is not incorporated by reference in this Report. 21 fibers cont. --------- ------------------------------- Sales --------------------- ($ in billions) 1991 1992 1993 6.1 6.1 6.2 ATOI --------------------- ($ in millions) 1991 1992 1993 416 409 169 Industrial nylon's lower volumes were partially offset by increased sales of specialty products such as yarns for airbags -- a rapidly expanding market for which nylon 6,6 has become the fiber of choice. In nonwovens, DuPont built on its world leadership in the rapidly growing, high-technology segment of this multi-billion dollar market. The nonwovens businesses -- "Sontara" spunlaced fabric, "Tyvek" spunbonded olefins and "Typar" spunbonded polypropylene -- are organized to work across product lines and geographic regions to solve market needs in medical, apparel, construction, packaging, reinforcement and absorbents. "Typar" grew in Europe and the United States as the leading nonwoven for broadloom carpet backing. Strong growth in Europe came from our new, reinforced "Tyvek", which is used for breathable roofliners; these simplify construction techniques. "Sontara" maintained a strong position in the worldwide health care industry as the preferred material for surgical gowns and drapes. It continues to grow in diverse consumer applications including window shades, specialty wipes, man- made leather and adult incontinence products. The "Nomex" flame-resistant and "Kevlar" high-strength aramid fibers businesses focused on enhancing quality, customer service, productivity and cycle time. Construction was completed on a "Kevlar" pulp plant at Richmond, Virginia, and a "Nomex" fiber plant at Asturias, Spain. Four new products were introduced for enhanced worker protection. "Kevlar LT" is a new fiber for the lightest and thinnest bullet-resistant vests available. "Nomex 111A" provides protection against static electricity as well as flame and thermal shock, for flight suits and in apparel for the oil, chemical and munitions industries. "Kevlar Kleen" is a low-linting fiber for cut-resistant gloves for food handling and use in clean rooms, while "Kevlar Plus" gives higher protection in gloves used in metal stamping operations. Composites gained in three vital areas: growth, cost position and market partnerships. DuPont is emerging as the number one U.S. supplier of advanced materials and is partnering with leading companies in Europe and Asia. 1993 VERSUS 1992 Sales were 2 percent above the prior year, principally due to the sales added from the acquisition of ICI's nylon business. Worldwide sales volume was up 5 percent, while prices declined, largely due to the exchange effects of a stronger dollar. Sales were about even with last year in all regions except in Asia, where sales were up 9 percent, mainly reflecting business expansion in the region. Absent additional sales from the ICI acquisition, European sales were down 16 percent, with about two-thirds of the decline due to price effects of the stronger dollar. After-tax operating income (ATOI) was down $240 million from 1992, principally due to higher restructuring charges. Excluding nonrecurring items from both years, earnings were $425 million, down 11 percent from $478 million in 1992. This reflects lower results for "Lycra", "Dacron", and nylon, particularly in Europe. 1992 VERSUS 1991 Sales were up less than 1 percent, as slightly higher prices were nearly offset by lower volume. ATOI was down 2 percent from 1991. Excluding nonrecurring items from both years and a 1992 charge of $104 million for accounting changes, earnings were up 4 percent, principally reflecting improved results for the textile and flooring systems businesses. 22 OUTLOOK Major restructuring initiatives have been undertaken to reduce costs and enhance efficiency. Further economic improvement in the United States and recovery in Europe and Japan would increase and accelerate the benefits of the restructuring programs. Development of new products and new applications for existing products provides opportunities for growth in selected markets. - ------------------------------------------------------------------------------- polymers ------------ . Engineering polymers, elastomers, fluoropolymers, ethylene polymers, finishes and performance films are produced to serve industries including packaging, construction, chemical processing, electrical, paper, textiles and transportation. This group also includes the automotive businesses, which are engaged in manufacturing and marketing more than 100 DuPont product lines used by the automotive industry. Under an initiative begun last year, these businesses are grouped into strategic business units (see chart inside front cover*). Polymers is on track with a strategy that is focused on core strengths in engineering polymers, ethylene polymers, fluoropolymers and finishes, to enhance our position in the automotive, packaging, construction and electrical markets. Developments during the year included the acquisition of ICI's nylon resins business and the announcement of a new nylon polymer facility as further steps toward growing our global nylon resins business. The ICI move will broaden our base in Europe. The polymer facility, located on Pulau Sakra, off Singapore, is needed to meet growing customer demand for DuPont "Zytel" nylon resin throughout the Asia Pacific region. Start-up is scheduled for 1995. "Zytel" is used in a wide range of applications, including automotive and electrical components. We also purchased Ciba-Geigy's PBT (polybutylene terephthalate) polyester business in Germany, which strengthens our global position in polyester resins and electrical markets. Except for "Corian" solid surface material, used in applications such as sinks and countertops, we sold our acrylics business to ICI as part of our strategy of focusing resources on those businesses in which we have unique strengths and the opportunity for global growth. A combination of cost-reduction programs and improving market conditions, primarily in the United States, brought gains late in the year. 1993 VERSUS 1992 Sales were up less than 1 percent as increased sales in the United States were essentially offset by lower sales in other regions. A worldwide 5 percent volume increase was offset by lower prices resulting principally from the currency exchange effects of a stronger dollar. =================================== Sales ----------------------------------- ($ in billions) 1991 1992 1993 5.6 5.9 5.9 ATOI ----------------------------------- ($ in millions) 1991 1992 1993 119 318 177 ----------------------------------- * This chart is not incorporated by reference in this Report 23 polymers cont. --------- After-tax operating income (ATOI) was down 44 percent from 1992 reflecting higher restructuring costs in 1993, including a $64 million charge for shutdown of a portion of the plant in LaPorte, Texas. Excluding nonrecurring items from both periods, ATOI was $340 million, even with last year. This reflects increased earnings from the United States and Asia Pacific, offset by lower earnings in Europe and Canada. The earnings gain in the United States resulted primarily from improvement in businesses supplying the automotive original equipment and after-markets, and electrical markets. 1992 VERSUS 1991 Sales were up 5 percent reflecting a 7 percent increase in volume partly offset by 2 percent lower selling prices. ATOI increased about $200 million. Excluding a 1992 charge of $75 million for accounting changes and nonrecurring items from both years, earnings were up 67 percent. The earnings gain reflects better results for automotive finishes and higher sales volume for engineering polymers. OUTLOOK Polymers is well positioned for global growth in selected markets. Cost- reduction initiatives and strategic alignments already undertaken further enhance our prospects for profitable growth in the event of global economic resurgence. Late-year results for packaging and industrial polymers, automotive and engineering polymers, helped by improving market conditions in the United States, indicate the potential benefits from a more widespread economic recovery. - ------------------------------------------------------------------------------- petroleum ---------- . Petroleum operations are carried out through Conoco, and range from exploring for crude oil and natural gas to marketing finished products. The upstream business finds, develops and produces crude oil and natural gas and processes natural gas to capture liquid hydrocarbons, such as ethane and propane, that are sold separately at higher value. The downstream business refines crude oil and other feedstocks into products such as gasoline and heating oil, and markets finished products to customers, primarily in the United States and Europe. Downstream also produces intermediates used as petrochemical feedstocks and specialty products such as petroleum coke and lubricating oils used in commercial and industrial applications. 24 =================================== Sales ----------------------------------- ($ in billions) 1991 1992 1993 15.9 16.1 15.8 ATOI ----------------------------------- ($ in millions) 1991 1992 1993 814 337 812 ----------------------------------- Conoco's strategies are to grow core upstream producing areas in North America and the North Sea and core downstream operations in the United States and Western Europe; create new core businesses in selected areas of high value and growth potential; and continuously rationalize the asset base, optimizing the portfolio and reducing costs. In upstream, these strategies have significantly affected the portfolio in the past two years. In 1991, we had 476 producing fields in North America. Today, we have 60 percent fewer fields, but we have retained essentially all of the original production volume. The largest portfolio transaction in 1993 was the trade of Conoco's Milne Point Field in Alaska and some deepwater Gulf of Mexico acreage for an interest in British Petroleum's Amberjack Field in the Gulf of Mexico. We also increased our equity interest in Dubai, the Kotter and Logger fields in the Netherlands, and the Britannia Field in the United Kingdom, while disposing of interests in Australia and France. All these steps were taken to improve our portfolio of assets for healthier businesses and improved profitability. In exploration, we made seven promising discoveries and drilled 32 successful reservoir evaluation wells. Our two most significant discoveries were in the United States. Excluding the impact of purchases and sales of reserves in place, we replaced more than 100 percent of our production last year, in part reflecting the addition of reserves for the Britannia Field in the U.K. North Sea. Overall, including the effect of purchases and sales to restructure our portfolio, and including reserves of equity affiliates, worldwide oil and gas reserves increased slightly last year, while our cost structure improved significantly. Production has begun from three new fields in the U.K. North Sea core area -- Lyell, Murdoch and Alba. Lyell and Murdoch are good examples of how new technology and partnering are being applied to reduce development costs. Design work continues on the development of the Britannia Field in the North Sea, and the Heidrun project in Norway is on schedule to produce first oil in 1995. In Indonesia, the Belida project is ahead of schedule, under budget and producing oil at a considerably higher rate than anticipated. Significant progress is being made in Russia on the Ardalin Field development. In addition, Conoco and our Russian partner, Arkhangelskgeologia, have recently signed an agreement for the evaluation of a new oil development project north of Ardalin. We continue to have high hopes that Nigeria can become a new core area. We were awarded a deepwater block during the year, and recently completed a seismic survey over the area. In the United States, we continue to pursue strategic growth in natural gas processing, a very profitable business. Natural gas liquids production increased by 13 percent over 1992. Our U.S. downstream network is seeing good results from consolidation into three regional units -- Rocky Mountain, Mid-Continent and Gulf Coast. The Rocky Mountain unit in particular posted improved results, reflecting success in reducing costs and capturing market opportunities. During 1994, the major challenge for the Gulf Coast regional business unit is to prepare for the changing market conditions that will result from the transition to cleaner, reformulated gasoline next January, under federal clean air legislation. The Lake Charles refinery can manufacture reformulated gasoline with lower new capital investment than the industry as a whole. In European downstream, our German affiliate had its best-ever earnings year, reflecting higher earnings from the Karlsruhe refinery, a major acquisition of retail stations, and continued expansion in eastern Germany. We are making substantial progress in expanding our marketing network elsewhere in Europe and began retail marketing in Norway and Finland. In Eastern Europe, our strategy couples 25 petroleum cont. - --------- refining and marketing opportunities, and we are moving forward with several refinery purchase options in countries where we have already begun retail marketing. In Southeast Asia, we are trying to penetrate a market of high growth and good margins. We are evaluating participation in a joint venture for construction of a 100,000-barrel-per-day high-conversion refinery at Petronas's new world-class facility in Melaka, Malaysia. The project would give Conoco a 40 percent interest in the refinery's expanded section. This, along with our new marketing network in Thailand, would establish a beachhead that could lead to an integrated system like our system in Europe. 1993 VERSUS 1992 Sales were down 2 percent on lower crude oil prices despite higher volumes. Earnings of $812 million were up 141 percent largely on lower costs, higher production volumes and a lower overall effective tax rate. Overhead and operating expenses were reduced approximately $400 million, or 12 percent, adding more than $200 million to earnings. 1993 earnings included a net benefit of $230 million due to tax law changes partly offset by property dispositions and restructuring charges of $161 million. 1992 results included restructuring charges of $96 million. Excluding these items, earnings were up 72 percent to $743 million compared with $433 million in the prior year. Upstream earnings were $509 million, up $310 million or 156 percent from 1992. After adjusting for nonrecurring items, earnings for the year were up $194 million or 79 percent on lower costs, higher international crude oil and worldwide natural gas volumes, and higher U.S. natural gas prices. Lower crude oil prices and higher production-related depreciation partly offset the improvement. Worldwide petroleum liquids production from Conoco's leases averaged 367,000 barrels per day, up 10 percent from 1992. The average realized selling price for crude oil was $14.66 per barrel in the United States and $16.50 per barrel outside the United States, down 16 percent and 11 percent, respectively. Worldwide natural gas deliveries for consolidated and equity affiliate operations of 1,311 million cubic feet per day were up 11 percent. The average price for natural gas in the United States was $1.94 per thousand cubic feet, up 14 percent. Outside the United States, the average natural gas price was up 3 percent to $2.62 per thousand cubic feet. Downstream earnings were $303 million, up 120 percent from $138 million in 1992. After adjusting for nonrecurring items, full-year earnings of $302 million were up $116 million or 62 percent reflecting lower costs and higher refined product margins. Feedstocks processed at the company's refineries increased 2 percent in 1993 to 674,000 barrels per day. Worldwide product sales of 876,000 barrels per day were up 4 percent from the prior year. 1992 VERSUS 1991 Sales were up slightly from 1991, while earnings were down 59 percent on lower worldwide crude oil prices and refined product margins. 1992 operating income included charges of $96 million for restructuring and $47 million for accounting changes, while 1991 included a charge of $40 million for nonrecurring items. Excluding accounting changes and other nonrecurring items, earnings of $480 million were down 44 percent. OUTLOOK With energy market conditions likely to remain soft for the near term, the focus for ongoing improvement in financial performance will continue to be on managing costs and restructuring assets, and identifying investment opportunities consistent with this market outlook. 26 - ------------------------------------------------------------------------------- diversified businesses --------- . Diversified Businesses are characterized by broad opportunities for future growth and the promise of increased profitability, with the shared advantage of DuPont research and development. Under an initiative begun last year, these businesses are grouped into strategic business units (see chart inside front cover*). AGRICULTURAL PRODUCTS Agricultural Products had an excellent sales year, despite a depressed European agricultural market and floods in the U.S. Midwest. We strengthened our position as one of the world's largest producers of crop protection chemicals, with continued growth in the United States, Canada, Australia, Japan and parts of Europe and South America. During the year, we introduced our "Synchrony STS" system in the U.S Midwest; this system links the new postemergence sulfonylurea herbicide "Synchrony" with specific varieties of a soybean seed to maximize weed control. We also introduced a new sugarbeet herbicide in Europe, continuing our strategy of introducing high-value new products for specific applications. ELECTRONIC MATERIALS Electronics' performance improved as a result of earlier business realignments and initiatives to reduce cost. Divestiture of the electronic connectors business was completed in the first quarter of 1993. Microcircuit and semiconductor materials recorded increases in sales and market share, which were offset by declines in sales of cleaning agents based on chlorofluorocarbons. The newly acquired Philips photomask operation in Germany is running smoothly, consolidating our position as a leading supplier of photomasks to semiconductor manufacturers in the Americas and Europe. A new joint venture in China for microcircuit materials increases our opportunities in this rapidly growing market. PRINTING AND PUBLISHING The printing and publishing businesses continued to improve through restructuring and reductions in fixed costs. A graphic arts film coater in Neu Isenberg, Germany, was started up and all worldwide coating operations will be consolidated at that facility in 1994. Products introduced included new Crosfield workstations for electronic imaging, the DuPont "HyperColor" system for high-fidelity color, and the DuPont "Digital Proofing System". MEDICAL PRODUCTS Medical Products focused on programs to maximize sales in a soft worldwide health care market, while continuing to reduce costs. We expanded our share among hospital groups with the signing of a single-source, multi-year contract with Columbia/HCA Health Care Corporation. =================================== Sales ----------------------------------- ($ in billions) 1991 1992 1993 7.7 6.2 5.7 ATOI ----------------------------------- ($ in millions) 1991 1992 1993 107 (49) (407) * This chart is not incorporated by reference in this Report. 27 diversified businesses cont. --------- Product introductions included the new "LINX" laser printer for diagnostic imaging, new tests for the "aca" and "Dimension" blood chemistry analyzers, new centrifuges and a variety of detection products for life science research. The DuPont Merck Pharmaceutical Company, of which DuPont owns 50 percent, had another year of significant sales and earnings growth with revenue exceeding $1 billion for the first time. CONSOL CONSOL Energy Inc., a coal operations joint venture owned 50 percent by DuPont, experienced strikes against its unionized operations for much of 1993. However, a new five-year contract was negotiated with the United Mine Workers of America in December that gave the company additional operating flexibility at union-represented mines. In July, CONSOL acquired Island Creek Coal Inc., including eight mining complexes with expected production of 10 to 12 million tons per year. 1993 VERSUS 1992 Sales decreased 7 percent due to lower volume reflecting the absence of sales from the divested connector systems business. Selling prices were 2 percent lower, as higher prices in the United States were more than offset by lower prices elsewhere, reflecting the stronger dollar. The segment had a loss of $407 million in 1993 as compared to a loss of $49 million the prior year. This results from increased net nonrecurring charges, principally higher restructuring costs, partly offset by a gain on the sale of Remington Arms Company. Restructuring included $448 million for asset write-downs, primarily after-tax charges for restructuring plant operations and write-offs of intangibles in printing and publishing. In addition, a $126 million charge was taken for product liability claims and legal expenses, related to the "Benlate" DF 50 fungicide recall. Excluding nonrecurring items and coal results from both years, earnings were up 146 percent. The increase is attributable to increased earnings from crop protection chemicals and films, and substantially lower costs in printing and publishing. 1992 VERSUS 1991 Sales decreased 20 percent reflecting the absence of coal business revenues in 1992 which became part of a joint venture accounted for under the equity method. Earnings declined from $107 million in 1991 to a loss of $49 million in 1992. Excluding a $65 million 1992 charge for accounting changes and nonrecurring items, earnings were $241 million, up 22 percent, principally reflecting cost reductions in printing and publishing and higher medical products earnings. OUTLOOK Diversified Businesses serves a wide range of industries, with various opportunities and challenges. One example is health care reform in the United States. We are considering the challenges and opportunities this may present. Steps have been taken to improve the profitability of the businesses in this group, through restructuring, realignment and cost reduction. 28 FINANCIAL INFORMATION 30 Management's Discussion and Analysis 35 Responsibilities for Financial Reporting 36 Report of Independent Accountants Financial Statements: 37 Consolidated Income Statement 38 Consolidated Balance Sheet 39 Consolidated Statement of Stockholders' Equity 40 Consolidated Statement of Cash Flows 41 Notes to Financial Statements 58 Supplemental Petroleum Data 64 Quarterly Financial Data 64 Consolidated Geographic Data 65 Five-Year Financial Review 29 Management's Discussion and Analysis This review and discussion of financial performance should be read in conjunction with the letter to stockholders (pages 2-7), business reviews (pages 20-28) and the consolidated financial statements (pages 37-57). ANALYSIS OF OPERATIONS Events of Note . In the first quarter the company sold its worldwide connector systems business to Hicks, Muse and Company, as part of its strategy for divestiture of non-core businesses. Proceeds were about $270 million, with negligible impact on earnings. . At mid-year, DuPont and Imperial Chemical Industries Ltd. (ICI) completed transactions in which DuPont acquired for about $475 million ICI's worldwide fibers business and ICI acquired for $280 million DuPont's acrylics business, excluding "Corian". The purchase strengthens the company's nylon market position, particularly in Europe, where most of ICI's business was based. The acrylics sale had minimal earnings impact. . In the third quarter, the company announced additional restructurings and recorded after-tax charges of $1.3 billion, principally for asset write-offs, the most significant of which were for goodwill, technology and rationalization of excess capacity in the printing and publishing businesses. . In the fourth quarter, the company completed sales of the Remington Arms Company and DuPont Canada's "Sclair" polyethylene business. A net after-tax gain of $52 million was recorded. Proceeds of $300 million from the Remington sale were used primarily to retire debt. . Also in the fourth quarter, the company took an additional $126 million after-tax charge in connection with the "Benlate" DF 50 fungicide recall. This additional accrual for "Benlate" DF 50 updates the estimate of costs based on recent experience of court trials, review of case histories and rate of spending on litigation. Adverse changes in estimates for these costs could result in additional future charges. Restructuring During 1993, the company announced a number of steps for strategic restructuring, primarily for improving competitiveness in global markets, but also to streamline internal organizations and eliminate large business sectors in favor of smaller, strategic business units. Restructuring charges of $1,295 million, after taxes, were taken in the third quarter. These include $375 million for employee separation costs related to the elimination of about 9,000 positions worldwide. Other charges were for write-offs, principally of goodwill and technology arising from printing and publishing acquisitions in the late 1980's, various facilities shutdowns and asset write-downs. The latter included write-downs for certain North American petroleum-producing properties sold in the fourth quarter, polymer production lines in LaPorte, Texas, nylon textile production lines in Martinsville, Virginia, and polyester filament production lines in Cooper River, South Carolina. It is estimated that 1994 earnings will reflect more than $300 million of after-tax cost savings related to this restructuring. Sales Sales in 1993 were $37.1 billion, down 2 percent from 1992. Sales in the Petroleum segment and the combination of all other segments were both about 2 percent below 1992. Lower sales were principally due to lower prices, partly offset by higher volumes. The sales decline for the combined Chemicals, Fibers, Polymers, and Diversified Businesses segments reflects 4 percent lower sales outside of the United States, largely due to adverse exchange effects from a stronger dollar, partly offset by higher volume. After adjusting for the divestiture of the connector systems business, U.S. sales were up 1 percent, reflecting slightly higher volume and prices. Fibers had increased sales resulting from the acquisition of ICI's nylon business, and Polymers had increased sales to the U.S. automotive industry. Sales in 1992 were $37.8 billion, 2 percent below 1991, principally reflecting the absence of sales from the coal business, which has been accounted for under the equity method since the beginning of 1992. After adjusting for the coal business, sales were up 2 percent, principally reflecting higher volumes worldwide. Currency exchange rates had no significant effect on the change in sales. 30 DUPONT Management's Discussion and Analysis Earnings Net income in 1993 was $555 million or $.81 per share, compared with a loss in 1992 of $3,927 million, or $(5.85) per share. Results in 1993 include higher restructuring charges, partly offset by reductions in cost of goods sold; selling, general and administrative expenses; interest; and other expenses. 1993 results also reflect a lower effective tax rate in Petroleum operations and a net benefit of $265 million resulting from tax law changes, primarily in the United Kingdom. Excluding the 1993 tax benefit, nonrecurring and extraordinary items from both years, and one-time charges in 1992 for adoption of new accounting standards, 1993 earnings were $1,677 million, or $2.46 per share, 25 percent higher than the $1,341 million, or $1.98 per share, earned in 1992. This improvement reflects higher Petroleum segment earnings, resulting principally from lower costs and increased production outside of the United States. Excluding the coal business that was adversely affected by United Mine Workers strikes for most of the year, combined earnings from segments other than Petroleum also improved, primarily due to cost reductions. 1992 net income* was $975 million, compared to $1,403 million in 1991. Excluding nonrecurring charges and the after-tax effect of accounting changes on 1992 earnings, 1992 earnings were $1,698 million, down 2 percent from 1991. Improvements in the Polymers and Diversified Businesses segments were offset by lower earnings for Petroleum. Taxes
- ------------------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------------------ ($ in millions) Income tax expense $ 392 $ 836 $ 1,415 Effective income tax rate (EITR) 40.9% 46.2% 50.2%
============================================================================== Over the last three years, the company's EITR exceeded the U.S. statutory rate of 35% in 1993, and 34% in 1992 and 1991, principally because of the higher tax rates associated with petroleum production operations outside the United States. The 1993 EITR decreased about 5 percentage points from the prior year, principally reflecting a lower effective tax rate in Petroleum operations and the $265 million tax benefit described above, partly offset by an increased proportion of higher-taxed Petroleum earnings. The decrease in the 1992 EITR, versus 1991, reflected a lower proportion of higher-taxed Petroleum earnings due to a reduced level of earnings in that segment, partly offset by an increase in the EITR from adoption of SFAS No. 109. The company paid total taxes of $6.4 billion in 1993, compared to $6.6 billion in 1992 and $6.4 billion in 1991. 1993 total tax payments were lower than 1992 reflecting lower taxes on income. Tax payments in 1992 were more than 1991, reflecting higher import duties and energy taxes outside the United States, partly offset by lower income tax payments. CASH FLOWS AND FINANCIAL CONDITION During the past three years, cash provided by operations was the primary source of funding for the company's capital investment programs and dividends. Cash provided by operations in 1993 totaled $5.4 billion, $1.0 billion higher than 1992. This principally reflects higher net income, excluding restructuring charges, and lower working capital. The 1993 third-quarter restructuring charge of $1.3 billion after taxes had minimal impact on cash provided by operations in 1993. Cash provided by operations in 1992 totaled $4.4 billion, down $1.1 billion from 1991, principally reflecting lower net income and a smaller benefit from working capital reductions. Capital expenditures of $3.7 billion in 1993, including expenditures for investments in affiliates, were $800 million, or 18 percent, below last year. Capital expenditures in 1992 were 14 percent lower than the 1991 level. The Petroleum segment accounted for 45 percent of total capital expenditures in 1993, up from 40 percent of the total in 1992, reflecting a proportionately higher curtailment of expenditures in segments other than Petroleum. The most significant Petroleum expenditures were for development of the Heidrun Field in Norway, the Murdoch and Alba North fields in the United Kingdom and the Belida field in Indonesia. For other segments, capital spending in 1993 continued to concentrate on strengthening and growing strategic businesses outside of the United States. This includes projects for "Adi-Pure" adipic acid and "Lycra" spandex in Singapore, "Ti-Pure" titanium dioxide in Taiwan, and "Nomex" aramid fibers and THF/"Terathane" polyether glycols in Spain. In the United States, significant expenditures were also made for commercialization of CFC alternatives and for modernization of "Dacron" polyester facilities. Improvement projects mainly concentrated on enhancing the efficiency and yields of existing refineries, including desulfurization of gasoline and diesel fuels, upgrading petroleum retail marketing networks, and X-ray film manufacturing. Capital expenditures for 1994 are estimated at $3.4 billion. - ------------------------------------------------------------------------------- *Before extraordinary item and transition effect of accounting changes. 31 DUPONT Management's Discussion and Analysis ===============================================================================
Capital Expenditures by Industry Segment ($ in billions) ----------------------------------------------------------------------- 1991 1992 1993 ----------------------------------------------------------------------- Chemicals .5 .4 .3 Fibers .8 .9 .8 Polymers .6 .6 .4 Petroleum 2.3 1.8 1.7 Diversified Businesses .7 .6 .3 ===============================================================================
=============================================================================== Dividends and Cash Provided by Operations ($ in billions) - ------------------------------------------------------------------------------- 1991 1992 1993 - ------------------------------------------------------------------------------- Dividends 1.1 1.2 1.2 Cash Provided by 5.5 4.4 5.4 Operations ===============================================================================
Total Capitalization at Year End ($ in billions) - ------------------------------------------------------------------------------- 1991 1992 1993 - ------------------------------------------------------------------------------- Total Capitalization 25.2 22.9 20.7 Total Debt 33% 48% 45% Stockholders' Equity 67% 52% 55% ===============================================================================
Proceeds from sales of assets were about $1.2 billion in 1993, versus about $180 million in 1992 and $1.4 billion in 1991. 1993 proceeds primarily reflected the sales of connector systems, acrylics, the Remington Arms Company and petroleum properties. 1991 included $570 million for the sale of an interest in the coal business. Dividends per share of common stock in 1993 were $1.76, compared with $1.74 in 1992 and $1.68 in 1991. The regular quarterly dividend remained at $.44 per share. Dividends were last increased in the second quarter of 1992 from $.42 per share. The common stock dividend payout, in relation to cash provided by operations, was 22 percent, as compared to a 27 percent payout in 1992 and 21 percent in 1991. Borrowings at year-end 1993 were $9.3 billion, compared to $10.9 billion and $8.2 billion in 1992 and 1991, respectively. The $1.6 billion decrease in borrowings in 1993 reflects improved cash flow and a $434 million decrease in cash and cash equivalents. The cash flow improvement results from lower costs, excluding noncash restructuring charges, increased proceeds from sales of non- strategic businesses and significantly lower capital expenditures. The year- end 1993 debt ratio* was 45 percent, as compared to 48 percent in 1992, reflecting the lower level of borrowings, partly offset by a reduction in stockholders' equity due to lower net income, resulting from restructuring. Working capital investment (excluding cash and cash equivalents, short- term borrowings and capital lease obligations) decreased $1.1 billion in 1993, reflecting lower inventories and accounts receivable, and higher current liabilities, principally due to the third-quarter restructuring charges. In 1992, working capital investment declined about $600 million, reflecting lower accounts receivable and higher accounts payable and other accrued liabilities. The ratio of current assets to current liabilities, including cash and cash equivalents, short-term borrowings and capital lease obligations, at year- end 1993 was 1.2:1, as compared to 1.2:1 in 1992 and 1.4:1 in 1991. * Total short- and long-term borrowings and capital lease obligations divided by the sum of these amounts plus stockholders' equity and minority interests in consolidated subsidiaries. 32 DUPONT Management's Discussion and Analysis ENVIRONMENTAL MATTERS Recognizing that some risk to the environment is associated with the company's operations, as it is with other companies engaged in similar businesses, the company is committed to protecting the environment and has a program to reduce emissions and generation of hazardous waste. The company complies worldwide with government regulations relating to the protection of the environment. Expenditures to comply with these increasingly stringent environmental laws and regulations could be significant over the next ten to twenty years but are not expected to have a material impact on the company's competitive or financial position. If new laws and regulations containing more stringent requirements are enacted, expenditures may be higher than the assessments of potential environmental costs provided below. New waste treatment facilities and pollution control and other equipment are being installed to satisfy legal requirements and to make progress in achieving the company's waste elimination and prevention goals. About $500 million was spent for capital projects related to environmental requirements and company goals in 1993. The company currently forecasts expenditures for environmental-related capital projects totaling about $500 million in 1994. These amounts may increase in future years. The company anticipates significant capital expenditures may be required over the next decade for treatment, storage, and disposal facilities for solid and hazardous waste. In addition, compliance costs under the 1990 Clean Air Act Amendments are expected to be significant. Environmental capital expenditures in 1992 and 1993 included expenditures in the Petroleum segment to meet federal requirements related to reformulated gasoline/clean fuels. Additional environmental capital expenditures are anticipated for plant air emission controls, primarily in the Chemicals and Petroleum segments; however, considerable uncertainty will remain with regard to estimates of capital expenditures until regulatory requirements are known. Estimated pretax environmental expenses charged to current operations, including the remediation accruals discussed below, totaled about $1 billion in 1993, as compared to $900 million in 1992 and 1991. These expenses include operating, maintenance, and depreciation costs for solid waste treatment, storage and disposal facilities and for air and water pollution control facilities; costs incurred in conducting environmental research activities; and other matters. The largest of these expenses results from the operation of water pollution control facilities (related to compliance with the Clean Water Act) and the operation of solid waste management facilities, each of which accounts for about one quarter of the total. More than 80 percent of total annual expenses relate to the company's Chemicals, Fibers, Polymers, and Diversified Businesses segments in the United States, primarily the Chemicals and Polymers segments. Expenses may increase over the next several years as a result of additional operating expenses associated with expected new pollution prevention and control equipment. The company accrues for certain environmental remediation activities relating to past operations, including those under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, often referred to as Superfund) and the Resource Conservation and Recovery Act (RCRA) described below, when it is probable that a liability has been incurred and reasonable estimates can be made. Accrued liabilities are exclusive of claims against third parties and are not discounted. During 1993, the company accrued $183 million for environmental remediation activities, compared to $160 million and $130 million in 1992 and 1991, respectively. At December 31, 1993, the company's balance sheet included an accrued liability of $522 million as compared to $465 million and $426 million at year-end 1992 and 1991, respectively. Expenditures for such previously accrued remediation activities were $126 million in 1993, $121 million in 1992 and $91 million in 1991. 33 Dupont Management's Discussion and Analysis The company's assessment of the potential impact of the two principal remediation statutes, RCRA and CERCLA, follows below. The assessment is subject to considerable uncertainty due to the complex, ongoing and evolving process of generating estimates of remediation costs. The various stages of remediation include initial broad-based analysis of a site, on-site investigation (including soil and ground water analyses), feasibility studies (comparing and selecting from among various remediation methods and technologies), approval by applicable authorities, and finally the actual implementation of the remediation plan. This process is affected by the ongoing development of new remediation technologies and regulations and occurs over a relatively long period of time. The company's assessment takes into account the stage of the process each site is in at the time of assessment, the degree of uncertainty surrounding estimates for each phase of remediation, and other factors affecting a specific site. RCRA, as amended in 1984, provides for extensive regulation of the treatment, storage and disposal of hazardous waste. Included in these regulations are bans on the land disposal of certain hazardous wastes and requirements for correcting contamination from past practices at operating sites subject to RCRA. The company anticipates significant additional expenditures may be required over the next two decades. Annual expenditures for RCRA corrective actions near term are not expected to vary significantly from the range of such expenditures over the past few years. Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly (perhaps between $50 million and $300 million in any one year), as a result of: the developing nature of administrative regulations; how the laws and regulations may be applied to sites; and multiple choices and costs associated with diverse technologies that may be used in corrective actions. The company is actively pursuing claims against insurers with respect to RCRA liabilities. The company from time to time receives notices from the Environmental Protection Agency (EPA) and state environmental agencies that the company is a "potentially responsible party" (PRP) under CERCLA and equivalent state legislation. These notices assert potential liability for remediation costs of various waste treatment or disposal sites that are not company-owned and allegedly contain wastes attributable to the company from past operations. The company may incur significant costs, which could exceed $150 million in the aggregate over the next decade with respect to these sites. The company's share of the remediation cost at these sites in many instances cannot be accurately predicted due to the large number of PRPs involved; the scarcity of reliable data pertaining to many of these sites; uncertainty as to how the laws and regulations may be applied to these sites; and multiple choices and costs associated with diverse technologies that may be used in remediation. For most sites, the company's potential liability will be significantly less than the total site remediation costs because the percentage of material attributable to the company versus that attributable to other PRPs is relatively low and the other PRPs have the financial strength to meet their obligations. The company is actively pursuing claims against insurers with respect to CERCLA liabilities. Although future remediation expenditures in excess of current reserves could be significant, the effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists, principally from evolving requirements and their effects on individual sites, selection of technology to meet compliance standards and the cost and timing of expenditures. These expenditures in the aggregate, however, are not expected to have a material impact on the company's competitive or financial position. 34 DUPONT Responsibilities for Financial Reporting Management is responsible for the consolidated financial statements and the other financial information contained in this Annual Report. The financial statements have been prepared in accordance with generally accepted accounting principles considered by management to present fairly the company's financial position, results of operations and cash flows. The financial statements include some amounts that are based on management's best estimates and judgments. The company's system of internal controls is designed to provide reasonable assurance as to the protection of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The company's business ethics policy is the cornerstone of our internal control system. This policy sets forth management's commitment to conduct business worldwide with the highest ethical standards. The business ethics policy also requires that the documents supporting all transactions clearly describe their true nature and that all transactions be properly reported and classified in the financial records. The system is monitored by an extensive program of internal audit, and management believes that the system of internal accounting controls at December 31, 1993 meets the objectives noted above. The financial statements have been audited by the company's independent accountants, Price Waterhouse. The purpose of their audit is to independently affirm the fairness of management's reporting of financial position, results of operations and cash flows. To express the opinion set forth in their report, they study and evaluate the internal accounting controls to the extent they deem necessary. Their report is shown on page 36. The adequacy of the company's internal accounting controls and the accounting principles employed in financial reporting are under the general oversight of the Audit Committee of the Board of Directors. This Committee also has responsibility for employing the independent accountants, subject to stockholder ratification. No member of this Committee may be an officer or employee of the company or any subsidiary or affiliated company. The independent accountants and the internal auditors have direct access to the Audit Committee, and they meet with the Committee from time to time, with and without management present, to discuss accounting, auditing and financial reporting matters. /s/ Edgar S. Woolard, Jr. /s/ Charles L. Henry Edgar S. Woolard, Jr. Charles L. Henry Chairman of the Board Senior Vice President and Chief Executive Officer DuPont Finance and Chief Financial Officer 35 DUPONT Report of Independent Accountants To the Stockholders and the Board of Directors of E. I. du Pont de Nemours and Company In our opinion, the consolidated financial statements appearing on pages 37 through 57 of this Annual Report present fairly, in all material respects, the financial position of E. I. du Pont de Nemours and Company and its subsidiaries at December 31,1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the company'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 generally accepted auditing standards 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 the opinion expressed above. As discussed in Note 1 to the consolidated financial statements, the company changed its method of accounting for postretirement benefits other than pensions and for income taxes in 1992. /s/ Price Waterhouse Price Waterhouse Thirty South Seventeenth Street Philadelphia, Pennsylvania 19103 February 17, 1994 36 DUPONT Financial Statements E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
- ----------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED INCOME STATEMENT DOLLARS IN MILLIONS, EXCEPT PER SHARE - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- 1993 1992 1991 - ----------------------------------------------------------------------------------------------------------------------------------- Sales* $ 37,098 $ 37,799 $ 38,695 Other Income (Note 2) 743 553 828 ---------------------------------------------------- Total 37,841 38,352 39,523 ---------------------------------------------------- Cost of Goods Sold and Other Operating Charges (Notes 3 and 13) 21,396 21,856 22,528 Selling, General and Administrative Expenses 3,309 3,743 3,576 Depreciation, Depletion and Amortization 2,833 2,655 2,640 Exploration Expenses, Including Dry Hole Costs and Impairment of Unproved Properties 361 416 602 Research and Development Expense 1,132 1,277 1,298 Interest and Debt Expense (Note 4) 594 643 752 Taxes Other Than on Income* (Note 5) 5,423 5,476 4,872 Gain from Sale of an Interest in Coal Business (Note 6) -- -- (391) Restructuring Charges (Note 7) 1,835 475 828 ---------------------------------------------------- Total 36,883 36,541 36,705 ---------------------------------------------------- Earnings Before Income Taxes 958 1,811 2,818 Provision for Income Taxes (Note 8) 392 836 1,415 ---------------------------------------------------- Income Before Extraordinary Item and Transition Effect of Accounting Changes 566 975 1,403 Extraordinary Charge from Early Extinguishment of Debt (Note 9) (11) (69) -- Transition Effect of Changes in Accounting Principles (Notes 1, 8, and 26) -- (4,833) -- ---------------------------------------------------- Net Income (Loss) $ 555 $ (3,927) $ 1,403 =================================================================================================================================== Earnings Per Share of Common Stock (Note 10) Income Before Extraordinary Item and Transition Effect of Accounting Changes $ .83 $ 1.43 $ 2.08 Extraordinary Charge from Early Extinguishment of Debt (Note 9) (.02) (.10) -- Transition Effect of Changes in Accounting Principles (Notes 1, 8, and 26) -- (7.18) -- ---------------------------------------------------- Net Income (Loss) $ .81 $ (5.85) $ 2.08 ===================================================================================================================================
* Includes petroleum excise taxes of $4,477, $4,508, and $3,867 in 1993, 1992, and 1991, respectively. See pages 41-57 for Notes to Financial Statements. 37 Dupont
- ----------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET DOLLARS IN MILLIONS, EXCEPT PER SHARE - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- December 31 1993 1992 - ----------------------------------------------------------------------------------------------------------------------------------- Assets Current Assets Cash and Cash Equivalents (Note 11) $ 1,240 $ 1,674 Accounts and Notes Receivable (Note 12) 4,848 5,238 Inventories (Note 13) 3,818 4,401 Prepaid Expenses 231 345 Deferred Income Taxes (Note 8) 762 570 ----------------------------------------- Total Current Assets 10,899 12,228 ----------------------------------------- Property, Plant and Equipment (Note 14) 47,926 47,235 Less: Accumulated Depreciation, Depletion and Amortization 26,503 25,353 ----------------------------------------- 21,423 21,882 ----------------------------------------- Investment in Affiliates (Note 15) 1,607 1,746 Other Assets (Notes 8 and 16) 3,124 3,014 ----------------------------------------- Total $37,053 $38,870 =================================================================================================================================== Liabilities and Stockholders' Equity Current Liabilities Accounts Payable (Note 17) $ 2,444 $ 2,771 Short-Term Borrowings and Capital Lease Obligations (Note 18) 2,796 3,799 Income Taxes (Note 8) 321 189 Other Accrued Liabilities (Note 19) 3,878 3,467 ----------------------------------------- Total Current Liabilities 9,439 10,226 Long-Term Borrowings and Capital Lease Obligations (Notes 20 and 21) 6,531 7,193 Other Liabilities (Note 22) 8,200 7,707 Deferred Income Taxes (Note 8) 1,466 1,802 ----------------------------------------- Total Liabilities 25,636 26,928 ----------------------------------------- Minority Interests in Consolidated Subsidiaries 187 177 ----------------------------------------- Stockholders' Equity (See page 39) Preferred Stock 237 237 Common Stock, $.60 par value; 900,000,000 shares authorized; issued at December 31: 1993--677,577,437; 1992--675,008,236 407 405 Additional Paid-In Capital 4,660 4,551 Reinvested Earnings 5,926 6,572 ----------------------------------------- Total Stockholders' Equity 11,230 11,765 ----------------------------------------- Total $37,053 $38,870 ===================================================================================================================================
See pages 41-57 for Notes to Financial Statements. 38 DUPONT - ------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF DOLLARS IN MILLIONS, EXCEPT PER SHARE STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 1993 1992 1991 - ----------------------------------------------------------------------------------------------------------------------------------- Preferred Stock, without par value-cumulative 23,000,000 shares authorized; issued at December 31: $4.50 Series -- 1,672,594 shares (callable at $120) $ 167 $ 167 $ 167 $3.50 Series -- 700,000 shares (callable at $102) 70 70 70 ---------------------------------------------------- 237 237 237 ---------------------------------------------------- Common Stock (Notes 23 and 24), $.60 par value; 900,000,000 shares authorized; issued at December 31: 1993 -- 677,577,437; 1992 -- 675,008,236; 1991 -- 671,242,137 407 405 403 ---------------------------------------------------- Additional Paid-In Capital (Notes 23 and 24) Balance at Beginning of Year 4,551 4,418 4,342 Common Stock: Issued in Connection with Compensation and Benefit Plans 109 133 81 Repurchased and Retired -- -- (5) ---------------------------------------------------- Balance at End of Year 4,660 4,551 4,418 ---------------------------------------------------- Reinvested Earnings (Note 23) Balance at Beginning of Year 6,572 11,681 11,437 Net Income (Loss) 555 (3,927) 1,403 ---------------------------------------------------- 7,127 7,754 12,840 - ----------------------------------------------------------------------------------------------------------------------------------- Preferred Dividends (10) (10) (10) Common Dividends (1993 -- $1.76; 1992 -- $1.74; 1991 -- $1.68) (1,191) (1,172) (1,127) ---------------------------------------------------- Total Dividends (1,201) (1,182) (1,137) ---------------------------------------------------- Common Stock Repurchased and Retired -- -- (22) ---------------------------------------------------- Balance at End of Year 5,926 6,572 11,681 ---------------------------------------------------- Total Stockholders' Equity $11,230 $11,765 $16,739 ===================================================================================================================================
See pages 41-57 for Notes to Financial Statements. 39 DUPONT
- --------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS DOLLARS IN MILLIONS - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------------------- Cash and Cash Equivalents at Beginning of Year $ 1,674 $ 468 $ 611 -------------------------------------------- Cash Provided by Operations Net Income (Loss) 555 (3,927) 1,403 Adjustments to Reconcile Net Income to Cash Provided by Operations: Extraordinary Charge from Early Extinguishment of Debt (Note 9) 11 69 -- Transition Effect of Accounting Changes (Notes 1, 8 and 26) -- 4,833 -- Depreciation, Depletion and Amortization 2,833 2,655 2,640 Dry Hole Costs and Impairment of Unproved Properties 201 185 311 Other Noncash Charges and Credits--Net (Note 7) 843 (174) (546) Decrease in Operating Assets: Accounts and Notes Receivable 103 104 380 Inventories and Other Operating Assets 664 219 740 Increase (Decrease) in Operating Liabilities: Accounts Payable and Other Operating Liabilities 686 907 823 Accrued Interest and Income Taxes (Notes 4 and 8) (516) (483) (290) -------------------------------------------- Cash Provided by Operations 5,380 4,388 5,461 -------------------------------------------- Investment Activities (Note 6) Purchases of Property, Plant and Equipment (3,621) (4,448) (5,065) Investments in Affiliates (70) (127) (220) Payments for Businesses Acquired (409) -- -- Proceeds from Sales of Assets 1,160 179 1,380 Miscellaneous--Net (41) (123) (40) -------------------------------------------- Cash Used for Investment Activities (2,981) (4,519) (3,945) -------------------------------------------- Financing Activities Dividends Paid to Stockholders (1,201) (1,182) (1,137) Net Increase (Decrease) in Short-Term Borrowings (Note 6) (2,024) 2,310 (1,301) Long-Term and Other Borrowings (Notes 6 and 9): Receipts 1,806 2,976 3,075 Payments (1,392) (2,711) (2,255) Common Stock: Issued in Connection with Compensation Plans 67 86 7 Repurchased and Retired -- -- (27) -------------------------------------------- Cash Provided by (Used for) Financing Activities (2,744) 1,479 (1,638) -------------------------------------------- Effect of Exchange Rate Changes on Cash (89) (142) (21) -------------------------------------------- Cash and Cash Equivalents at End of Year $ 1,240 $ 1,674 $ 468 -------------------------------------------- Increase (Decrease) in Cash and Cash Equivalents $ (434) $ 1,206 $ (143) ===========================================================================================================================
See pages 41-57 for Notes to Financial Statements. 40 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 1. Summary of Significant Accounting Policies DuPont observes the generally accepted accounting principles described below. These, together with the other notes that follow, are an integral part of the consolidated financial statements. Accounting Changes In 1992, DuPont adopted Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" and SFAS No. 109, "Accounting for Income Taxes." The company recorded charges to net income of $3,788 ($5.63 per share) and $1,045 ($1.55 per share), respectively, as of January 1, 1992 for the effects of transition to these two new standards. See also Notes 8 and 26. Basis of Consolidation The accounts of wholly owned and majority-owned subsidiaries are included in the consolidated financial statements. Investments in affiliates owned 20 percent or more and corporate joint ventures are accounted for under the equity method. Investments in noncorporate joint ventures of petroleum operations are consolidated on a pro rata basis. Other securities and investments are generally carried at cost. Inventories Substantially all inventories are valued at cost as determined by the last-in, first-out (LIFO) method; in the aggregate, such valuations are not in excess of market. Elements of cost in inventories include raw materials, direct labor and manufacturing overhead. Stores and supplies are valued at cost or market, whichever is lower; cost is generally determined by the average cost method. Property, Plant and Equipment Property, plant and equipment (PP&E) is carried at cost and, except for petroleum PP&E, is generally classified in depreciable groups and depreciated by accelerated methods that produce results similar to the sum-of-the-years' digits method. Depreciation rates range from 4 percent to 12 percent per annum on direct manufacturing facilities and from 2 percent to 10 percent per annum on other facilities; in some instances appropriately higher or lower rates are used. Generally, for PP&E acquired prior to 1991, the gross carrying value of assets surrendered, retired, sold or otherwise disposed of is charged to accumulated depreciation and any salvage or other recovery therefrom is credited to accumulated depreciation. For disposals of PP&E acquired after 1990, the gross carrying value and related accumulated depreciation are removed from the accounts and included in determining gain or loss on such disposals. Petroleum PP&E, other than that described below, is depreciated on the straight-line method at various rates calculated to extinguish carrying values over estimated useful lives. When petroleum PP&E is surrendered, retired, sold or otherwise disposed of, the assets involved determine if gain or loss is recognized, or the gross carrying value is charged to accumulated depreciation, depletion and amortization and any salvage or other recovery therefrom is credited to accumulated depreciation, depletion and amortization. Maintenance and repairs are charged to operations; replacements and betterments are capitalized. Oil and Gas Properties The company's exploration and production activities are accounted for under the successful-efforts method. Costs of acquiring unproved properties are capitalized, and impairment of those properties, which are individually insignificant, is provided for by amortizing the cost thereof based on past experience and the estimated holding period. Geological, geophysical and delay rental costs are expensed as incurred. Costs of exploratory dry holes are expensed as the wells are determined to be dry. Costs of productive properties, production and support equipment, and development costs are capitalized and amortized on a unit-of-production basis. Intangible Assets Identifiable intangible assets such as purchased patents and trademarks are amortized on a straight-line basis over their estimated useful lives. Goodwill is amortized over periods up to 40 years on the straight-line method. Environmental Liabilities and Expenditures Accruals for environmental matters are recorded in operating expenses when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Accrued liabilities are exclusive of claims against third parties and are not discounted. In general, costs related to environmental remediation are charged to expense. Environmental costs are capitalized if the costs increase the value of the property and/or mitigate or prevent contamination from future operations. Income Taxes The provision for income taxes for 1993 and 1992 has been determined under SFAS No. 109, which requires use of the asset and liability approach to accounting for income taxes. Under that approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the company's assets and liabilities and are adjusted for changes in tax rates and tax laws 41 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Prior to 1992, the provision for income taxes was determined under Accounting Principles Board (APB) Opinion No. 11, which required use of the deferral method. Under that method, the provision for income taxes was based on pretax financial income, which differed from taxable income because certain elements of income and expense were reflected in different periods for financial accounting and tax purposes. Deferred taxes were provided on these timing differences using the tax rate in effect when the timing difference originated, and the effects of reversing timing differences were reflected at those historical tax rates. Provision has been made for income taxes on unremitted earnings of subsidiaries and affiliates, except in cases in which these earnings are deemed to be permanently invested. Investment tax credits or grants are accounted for in the period earned (the flow-through method). Foreign Currency Translation The company has determined that the U.S. dollar is the "functional currency" of its worldwide operations. Foreign currency asset and liability amounts are translated into U.S. dollars at end-of-period exchange rates, except for inventories, prepaid expenses and property, plant and equipment, which are translated at historical rates. Income and expenses are translated at average exchange rates in effect during the year, except for expenses related to balance sheet amounts that are translated at historical exchange rates. The company enters into forward exchange contracts to hedge against the adverse impact of foreign currency fluctuations on the monetary assets and liabilities of operations outside the United States. Exchange gains and losses, net of their related tax effects, are included in income in the period in which they occur. In addition, the company enters into forward exchange contracts and similar agreements to effectively convert certain firm foreign currency commitments to U.S. dollar-denominated transactions. Gains and losses on these specific commitment hedges are deferred and included in the measurement of the related foreign currency transactions. In the Consolidated Statement of Cash Flows, the company reports the cash flows resulting from its hedging activities in the same category as the related item that is being hedged. Interest Rate Swap Agreements The company enters into interest rate swap agreements to moderate its exposure to interest rate changes and/or to lower the overall cost of borrowings. The differential to be paid or received is accrued as interest rates change and is recognized in income over the life of the agreements. Reclassifications Certain reclassifications of prior years' data have been made to conform to 1993 classifications. 2. Other Income
- -------------------------------------------------------------------- 1993 1992 1991 - -------------------------------------------------------------------- Royalty income $111 $118 $120 Interest income, net of miscellaneous interest expense 160 178 193 Equity in earnings of affiliates (see Note 15) 121 216 18 Sales of assets 198 40 442 Miscellaneous income and expenses-net 153 1 55 ------------------------- $743 $553 $828 ====================================================================
3. Fungicide Recall and Claims Provision During 1991, the company initiated a stop-sale and recall of "Benlate" DF 50 fungicide. The company accrued $200, $212 and $343 in 1993, 1992 and 1991 respectively, for estimated costs in excess of insurance coverage. Adverse changes in estimates for such costs could result in additional future charges. 4. Interest and Debt Expense
- -------------------------------------------------------------------- 1993 1992 1991 - -------------------------------------------------------------------- Interest and debt cost incurred $825 $860 $968 Less: Interest and debt cost capitalized 194 194 197 Foreign currency adjustments* 37 23 19 ------------------------ $594 $643 $752 ====================================================================
* Represents exchange gains associated with local currency borrowings in hyperinflationary economies. These amounts effectively offset the related inflationary interest expense arising from currency devaluations. Interest paid (net of amounts capitalized) was $614 in 1993, $611 in 1992 and $712 in 1991. 42 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 5. Taxes Other Than on Income
- ------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------ Petroleum excise taxes (also included in Sales): U.S. $ 803 $ 709 $ 664 Non-U.S. 3,674 3,799 3,203 Payroll taxes 443 459 479 Property taxes 201 201 207 Import duties 151 146 136 Production and other taxes 151 162 183 ------------------------------ $5,423 $5,476 $4,872 ==================================================================
6. Investment Activities Payments for businesses acquired in 1993 include $380 as part of the third-quarter acquisition of Imperial Chemical Industries P.L.C.'s worldwide nylon business. In addition to the cash payment, a deferred payment of $93 is reflected in Other Liabilities. Of the total purchase price, $259 and $170 were reflected in property, plant and equipment and inventories, respectively. Proceeds from sales of businesses in 1993 principally include $270 from the first-quarter sale of the connector systems business, $280 from the third-quarter sale of the acrylics business, and $300 from the fourth-quarter sale of Remington Arms. Assets sold in connection with these sales amounted to $656, of which $336 was property, plant and equipment with the remainder divided about equally between inventories and other current assets. On December 31, 1991, DuPont and subsidiaries of RWE AG of Germany (collectively, Rheinbraun) formed a corporate joint venture owned 50% each. To form this joint venture, DuPont sold an approximate 34% interest in its coal business, principally Consolidation Coal Company, to Rheinbraun. Proceeds to the company were $570. DuPont contributed the remainder of its coal business interests to the joint venture, and the venture assumed $896 of short- and long-term borrowings of the coal business. Rheinbraun contributed the interest purchased from DuPont, other U.S. coal interests and $320 cash, which was used at December 31, 1991 to pay down venture borrowings. This corporate joint venture, CONSOL Energy Inc., is accounted for under the equity method. 7. Restructuring Charges Restructuring charges are directly related to corporate decisions to reduce worldwide employment levels and realign worldwide production and support facilities in order to improve productivity and competitiveness. Charges include write-offs of intangibles, employee separation costs, costs of shutting down certain facilities and contract cancellation costs. Charges of $1,835 were recorded in the third quarter of 1993. Asset writedowns and facility shutdowns totaled $1,206 million, principally for rationalization of excess capacity and write-offs of goodwill and technology in the printing and publishing business and for certain North American petroleum properties sold in the fourth quarter. Employee separation costs totaled $559, of which approximately $190 will be paid from the company's pension trust. Costs for miscellaneous items were $70. In the fourth quarter of 1992, the company recorded charges of $475 for termination incentives and payments, as well as certain other charges, related to business restructurings. During 1991 the company announced various cost reduction programs, primarily in the U.S. chemicals and specialties businesses. The cost of these programs accrued in the fourth quarter 1991 was $828. About $417 of this amount was paid from the company's pension trust. 43 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 8. Provision for Income Taxes Effective January 1, 1992, the company adopted SFAS No. 109, "Accounting for Income Taxes." Information shown below for 1991 was determined under the provisions of APB Opinion No. 11. On adoption of SFAS No. 109, the company recorded an increase in deferred tax liabilities at January 1, 1992, and a charge to income of $1,045, principally to provide deferred taxes for purchase business combinations consummated prior to 1992 for which it was not practicable to adjust all remaining assets and liabilities to pretax amounts. Total income taxes paid worldwide were $896 in 1993, $1,213 in 1992 and $1,661 in 1991.
- ------------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------------ Current tax expense: U.S. federal $ 321 $ 34 $ 665 U.S. state and local 21 5 42 Non-U.S. 758 857 1,012 ---------------------------------- Total 1,100 896 1,719 Deferred tax expense: U.S. federal (486) (319) (549) U.S. state and local (53) (35) (64) Non-U.S. (198) 133 206 ---------------------------------- Total (737) (221) (407) ---------------------------------- Other/1/ 29 161 103 ---------------------------------- Provision for Income Taxes (Excluding Extraordinary Item and Transition Effect of Accounting Change) 392 836 $ 1,415 =========== Extraordinary Item (7) (39) Transition Effect of Change in Accounting for Postretirement Benefits Other Than Pensions -- (2,130) Stockholders' Equity/2/ (20) (11) ----------------------- Total Provision/3/ $ 365 $ (1,344) ========================================================================
/1/ Represents exchange losses associated with the company's hedged non-U.S. tax liabilities. These amounts offset the tax effect arising from related hedging activities. The 1992 amount also includes $97 representing exchange gains on unhedged non-U.S. deferred tax liabilities established in conjunction with the adoption of SFAS No. 109. Excluding this item, exchange gains and losses, net of their related tax effects, were not material in the periods presented. /2/ Represents tax benefit of certain stock compensation amounts that are deductible for income tax purposes but do not affect net income. /3/ 1993 includes a net tax benefit of $265, arising principally from U.K. Petroleum Revenue Tax law revisions. Deferred income taxes result from temporary differences between the financial and tax bases of the company's assets and liabilities. Temporary differences are determined in accordance with SFAS No. 109 commencing in 1992 and are more inclusive than timing differences as determined under previously applicable accounting principles. Deferred income taxes for years prior to 1992 have not been restated. The tax effects of temporary/timing differences and tax loss/tax credit carryforwards included in the deferred income tax provision (excluding extraordinary item and transition effect of accounting change) are as follows:
- ------------------------------------------------------------------------- 1993 1992 1991 - ------------------------------------------------------------------------- Depreciation $ (105) $ 232 $ 154 Accrued employee benefits (69) (69) (434) Other accrued expenses (346) (67) (169) Intangible drilling costs (68) 10 33 Inventory 109 (53) 101 Unrealized exchange losses (22) (125) (37) Investment in subsidiaries and affiliates (4) -- -- Other temporary/timing differences 30 (55) (58) Tax loss/tax credit carryforwards 4 (103) 3 Valuation allowance change--net 8 9 -- Tax rate changes (274) -- -- ----------------------------- $ (737) $ (221) $ (407) =========================================================================
44 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- The significant components of deferred tax assets and liabilities at December 31, 1993 and 1992 are as follows:
- --------------------------------------------------------------------------------------- 1993 1992 - --------------------------------------------------------------------------------------- Deferred Tax Asset Liability Asset Liability - --------------------------------------------------------------------------------------- Depreciation $ -- $ 2,808 $ 5 $ 3,111 Accrued employee benefits 2,875 651 2,763 649 Other accrued expenses 963 -- 626 -- Intangible drilling costs -- 337 -- 420 Inventory 107 330 182 317 Unrealized exhange gains/losses 85 -- 60 -- Tax loss/tax credit carryforwards 590 -- 594 -- Investment in subsidiaries and affiliates 34 130 26 123 Other 352 878 370 829 -------------------------------------------------- Total 5,006 $ 5,134 4,626 $ 5,449 ========= ========= Less : Valuation allowance (445) (437) --------- --------- Net $ 4,561 $ 4,189 =======================================================================================
Current deferred tax liabilities (included in the Consolidated Balance Sheet caption "Income Taxes") were $67 and $28 at December 31, 1993 and 1992, respectively. In addition, at December 31, 1993, a $198 deferred tax asset was included in Other Assets (see Note 16). An analysis of the company's effective income tax rate (excluding extraordinary item and transition effect of accounting changes) follows:
- -------------------------------------------------------------------------------- 1993 1992 1991 - -------------------------------------------------------------------------------- Statutory U.S. federal income tax rate 35.0% 34.0% 34.0% Higher effective tax rate on non-U.S. operations (principally Petroleum) 51.9 20.5 22.9 Lower effective tax rate on operations within U.S. possessions (5.6) (2.4) (1.1) Lower effective tax rate on export sales (2.5) (1.6) (1.3) Alternative fuels credit (6.9) (2.0) (1.0) States taxes (2.2) (0.6) (0.5) Tax rate changes (28.6) -- -- Rate differential on reversing timing differences -- -- (2.9) Other-net (0.2) (1.7) 0.1 -------------------------------- Effective income tax rate 40.9% 46.2% 50.2% ================================================================================
Earnings before income taxes shown below are based on the location of the corporate unit to which such earnings are attributable. However, since such earnings are often subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. does not correspond to the earnings set forth below.
- ----------------------------------------------------------------- 1993 1992 1991 - ----------------------------------------------------------------- U.S. (including exports) $ (167) $ 136 $ 860 Other regions 1,125 1,675 1,958 ------------------------------ $ 958 $1,811 $2,818 =================================================================
At December 31, 1993, unremitted earnings of non-U.S. subsidiaries totaling $3,526 were deemed to be permanently invested. No deferred tax liability has been recognized with regard to the remittance of such earnings. It is not practicable to estimate the income tax liability that might be incurred if such earnings were remitted to the United States. Under the tax laws of various jurisdictions in which the company operates, deductions or credits that cannot be fully utilized for tax purposes during the current year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future year. At December 31, 1993, the tax effect of such carryforwards approximated $590. Of this amount, $303 has no expiration date, $26 expires in 1994, $154 expires after 1994 but before 2000, and $107 expires between 2000 and 2009. 45 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 9. Extraordinary Charge from Early Extinguishment of Debt In December 1993, there was a charge of $11, net of a tax benefit of $7, for the redemption of $285 of outstanding debentures. In 1992, outstanding debt of $603 was redeemed with a resulting charge of $69, net of a tax benefit of $39. Charges principally represent call premium and unamortized discount, respectively. 10. Earnings Per Share of Common Stock Earnings per share are calculated on the basis of the following average number of common shares outstanding: 1993 - 676,622,115; 1992 - 673,454,935; and 1991 - - 670,743,786. 11. Cash and Cash Equivalents Cash equivalents represent investments with maturities of three months or less from time of purchase. They are carried at cost plus accrued interest, which approximates fair value because of the short maturity of these instruments. Cash and cash equivalents are used, in part, to support a portion of the company's commercial paper program. 12. Accounts and Notes Receivable
- ----------------------------------------------------------------- December 31 1993 1992 - ----------------------------------------------------------------- Trade-net of allowances of $97 in 1993 and $91 in 1992 $4,020 $4,234 Miscellaneous 828 1,004 ------------------- $4,848 $5,238 =================================================================
Accounts and notes receivable are carried at amounts which approximate fair value. See Note 29 for a description of business segment markets and associated concentrations of credit risk. 13. Inventories
- ----------------------------------------------------------------- December 31 1993 1992 - ----------------------------------------------------------------- Chemicals $ 250 $ 233 Fibers 571 600 Polymers 550 740 Petroleum 1,367 1,350 Diversified Businesses 1,080 1,478 ------------------- $3,818 $4,401 =================================================================
The excess of replacement or current cost over stated value of inventories for which cost has been determined under the LIFO method approximated $766 and $1,187 at December 31, 1993 and 1992, respectively. In the aggregate, the market value of the company's vertically integrated petroleum and petroleum-based chemical products exceeds cost. Inventories valued at LIFO comprised 87 percent and 85 percent of consolidated inventories before LIFO adjustment at December 31, 1993 and 1992, respectively. The liquidation of LIFO inventory quantities carried in the aggregate at lower costs prevailing in prior years increased 1993 net income by about $50 ($.07 per share). 14. Property, Plant and Equipment
- ----------------------------------------------------------------- December 31 1993 1992 ------- ------- Chemicals $ 4,984 $ 4,946 Fibers 10,280 9,875 Polymers 7,742 7,567 Petroleum 17,698 17,499 Diversified Businesses 5,265 5,504 Corporate 1,957 1,844 ---------------------- $47,926 $47,235 =================================================================
Property, plant and equipment includes gross assets acquired under capital leases of $72 and $109 at December 31, 1993 and 1992, respectively; related amounts included in accumulated depreciation, depletion and amortization were $57 and $72 at December 31, 1993 and 1992, respectively. Maintenance and repairs expense was $1,475 in 1993, $1,645 in 1992 and $1,819 in 1991. 46 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 15. Summarized Financial Information for Affiliated Companies Summarized combined financial information for affiliated companies for which DuPont uses the equity method of accounting (see Note 1, "Basis of Consolidation") is shown below on a 100 percent basis. The most significant of these affiliates are CONSOL Energy, Inc. and The DuPont Merck Pharmaceutical Company; DuPont has a 50 percent equity ownership in each of these companies. Dividends received from equity affiliates were $243 in 1993, $124 in 1992 and $138 in 1991.
- --------------------------------------------------------------------- Year Ended December 31 - --------------------------------------------------------------------- Results of operations 1993 1992 1991 - --------------------------------------------------------------------- Sales/1/ $8,030 $8,173 $4,751 Earnings before income taxes 446 771 347 Net Income 252 568 187 DuPont's equity in earnings of affiliates (see Note 2) 121 216 18 =====================================================================
- --------------------------------------------------------------------- December 31 - --------------------------------------------------------------------- Financial position 1993 1992 - --------------------------------------------------------------------- Current assets $2,703 $2,474 Noncurrent assets 6,813 7,042 -------------------- Total assets $9,516 $9,516 -------------------- Short-term borrowings/2/ $ 475 $ 623 Other current liabilities 1,820 1,504 Long-term borrowings/2/ 2,220 1,767 Other long-term liabilities 2,847 2,250 -------------------- Total liabilities $7,362 $6,144 -------------------- DuPont's investment in affiliates (includes advances) $1,607 $1,746 =====================================================================
/1/ Includes sales to DuPont of $752 in 1993, $803 in 1992 and $602 in 1991. /2/ DuPont's pro rata interest in total borrowings was $985 in 1993 and $839 in 1992, of which $388 in 1993 and $274 in 1992 was guaranteed by the company. These amounts are included in the guarantees disclosed in Note 27. 16. Other Assets
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- Prepaid pension cost (see Note 25) $1,384 $1,448 Intangible assets 278 461 Other securities and investments 474 397 Deferred income taxes (see Note 8) 198 -- Miscellaneous 790 708 ------------------- $3,124 $3,014 =====================================================================
At December 31, 1993, $391 of the $474 of other securities and investments represents marketable securities carried at cost, the fair value of which approximated cost based on quoted market prices. The remaining $83 of other securities and investments represents numerous small investments in securities for which there are no quoted market prices and for which it is not practicable to determine fair value. 17. Accounts Payable
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- Trade $1,675 $1,913 Payables to banks 264 390 Compensation awards 94 90 Other 411 378 ------------------- $2,444 $2,771 =====================================================================
Payables to banks represents checks issued on certain disbursement accounts but not presented to the banks for payment. The reported amounts approximate fair value because of the short maturity of these obligations. 47 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 18. Short-Term Borrowings and Capital Lease Obligations
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- Commercial paper/1/ $ 325 $2,182 Bank borrowings: U.S. dollars/2/ 25 169 Other currencies/3/ 395 262 Master notes 495 570 Indexed notes payable within one year:/4/ U.S. dollars 152 15 Other currencies 107 25 Long-term borrowings payable within one year: U.S. dollars 1,130 503 Other currencies/5/ 100 8 Industrial development bonds payable on demand 50 50 Capital lease obligations 17 15 -------------------- $2,796 $3,799 =====================================================================
/1/ The company had an outstanding interest rate swap agreement at December 31, 1993 and 1992 that effectively converted $50 of floating rate borrowings to fixed rate borrowings with an average interest rate of 8.5 percent. The remaining term of this swap agreement was more than one year at December 31, 1993. /2/ 1992 includes $157 with a floating money market based interest rate. /3/ 1993 includes 1,173 million Norwegian krone borrowings ($158 at the year-end exchange rate) with an average interest rate of 5.9 percent. 1992 includes 200 million Australian dollar borrowings ($140 at the December 31, 1992 exchange rate) with a floating money market based interest rate. /4/ Principal repayments are indexed to changes in various exchange rates and can theoretically range from zero to twice the face amount of the note. Interest payments are calculated on the face amount using either a fixed or floating interest rate. Concurrent with the issuance of each of these notes, the company entered into contractual agreements that effectively converted each note to a U.S. dollar-denominated borrowing with (1) a fixed principal repayment amount independent of changes in the indexation factor, and (2) either a fixed or floating rate of interest comparing favorably with rates for the company's nonindexed borrowings of comparable maturity. /5/ 1993 amount represents notes denominated as 125 billion Italian lire with a 12.375 percent interest rate. Concurrent with the issuance of these notes, the company entered into contractual agreements that effectively established U.S. dollar-denominated principal with U.S. dollar interest payable at a 7.45 percent fixed rate. The fair value of the company's short-term borrowings at December 31, 1993 is estimated to be $2,900 based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities. Unused short-term bank credit lines amounted to approximately $2,100 at December 31, 1993. These lines support short-term industrial development bonds, master note borrowings and a portion of the company's commercial paper program and other borrowings. 19. Other Accrued Liabilities
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- Payroll and other employee benefits $ 694 $ 662 Taxes other than on income 380 412 Postretirement benefits other than pensions (see Note 26) 343 344 Restructuring charges 810 370 Miscellaneous 1,651 1,679 ------------------- $3,878 $3,467 =====================================================================
48 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 20. Long-Term Borrowings and Capital Lease Obligations
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- U.S. dollar: Industrial development bonds due 2001-2022 $ 234 $ 304 Medium-term notes due 1994-2002/1/ 837 1,044 9.00% notes due 1994 -- 252 8.50% notes due 1996 252 253 8.45% notes due 1996 300 300 8.65% notes due 1997 300 300 8.50% notes due 1998 302 302 7.50% notes due 1999 304 305 9.15% notes due 2000/2/ 307 309 6.00% debentures due 2001 ($660 face value, 13.95% yield to maturity) 411 395 6.75% notes due 2002/3/ 299 299 8.00% notes due 2002 254 254 8.50% notes due 2003/4/ 300 300 8.13% notes due 2004 349 349 8.25% notes due 2006 299 299 8.50% debentures due 2006 -- 158 8.50% debentures due 2016 -- 284 8.25% debentures due 2022 399 399 7.95% debentures due 2023/5/ 299 -- 7.50% debentures due 2033/6/ 247 -- 12.375% Italian lira notes due 1994 -- 100 6.25% Swiss franc notes due 2000/7/ 103 -- Other loans (various currencies) due 1994-2005/8/ 701 923 Capital lease obligations 34 64 ------------------- $6,531 $7,193 =====================================================================
/1/ Average interest rates at December 31, 1993 and 1992 were 6.78 percent and 6.79 percent, respectively. The company had outstanding interest rate swap agreements at December 31, 1993 and 1992, that effectively converted $197 and $259, respectively, of long-term fixed rate borrowings to floating rate obligations with an effective interest rate less than that generally available for the company's commercial paper. The remaining term of these swap agreements was more than one year at December 31, 1993. /2/ Concurrent with the issuance of these notes, the company entered into an interest rate swap agreement that effectively converted these notes to an 8.55 percent fixed rate obligation over their term. The counterparty has the option, in 1997, to convert the swap to a floating rate essentially equivalent to the rate the company pays on its commercial paper. /3/ Subsequent to the issuance of these notes, the company entered into interest rate swap agreements that effectively converted $250 of these notes to a floating rate obligation. The remaining average term of these swap agreements was more than one year at December 31, 1993. /4/ Subsequent to the issuance of these notes, the company entered into an interest rate swap agreement that could effectively convert these notes to a floating rate obligation. The counterparty has the right to exercise the option in 2001, converting the notes to a floating rate essentially equivalent to the rate the company pays on its commercial paper. /5/ Subsequent to the issuance of these debentures, the company entered into interest rate swap agreements that effectively converted $225 of these debentures to a floating rate obligation. The remaining term of these swap agreements was more than one year at December 31, 1993. /6/ Concurrent with the issuance of these debentures, the company entered into an interest rate swap agreement that effectively converted the debentures to a floating rate obligation. The remaining term of this swap agreement was more than one year at December 31, 1993. /7/ Represents notes denominated as 150 million Swiss francs with a 6.25 percent interest rate. Concurrent with the issuance of these notes, the company entered into a contractual agreement that effectively established U.S. dollar- denominated principal with U.S. dollar interest payable at a 6.9 percent fixed rate. /8/ Includes notes denominated as 160 million Australian dollars with a 16.5 percent interest rate issued by the company's majority-owned Canadian subsidiary, which were effectively converted to a 149 million Canadian dollar obligation with an implicit 12.43 percent annual cost through a series of currency swap agreements and forward exchange contracts. Also includes a loan in the amount of 190 million pounds sterling ($292 and $287 at the respective 1993 and 1992 year-end exchange rates) with a floating money market based interest rate. 1992 includes a bank loan in the amount of 4 billion Belgian financial francs ($121 at the 1992 year-end exchange rate). The company entered into forward exchange contracts that effectively converted interest payments for the current interest settlement period to U.S. dollar-denominated amounts. Average interest rates on industrial development bonds and on other loans (various currencies) were 5.5 percent and 7.4 percent at December 31, 1993, and 6.2 percent and 7.3 percent at December 31, 1992, respectively. Maturities of long-term borrowings, together with sinking fund requirements in each of the four years after December 31, 1994, are as follows: 1995 - $386 1997 - $789 1996 - $872 1998 - $417 The fair value of the company's long-term borrowings at December 31, 1993 is estimated to be $7,500 based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities. 49 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 21. Leases The company uses various leased facilities and equipment in its operations. The company's future minimum lease payments under operating and capital leases, together with the present value of the net minimum capital lease payments at December 31, 1993, are as follows:
- --------------------------------------------------------------------- Capital Operating Leases Leases - --------------------------------------------------------------------- Minimum lease payments for years ending December 31:* 1994 $ 24 $ 322 1995 14 248 1996 9 191 1997 4 157 1998 4 118 Remainder 40 695 ------------------------- 95 $ 1,731 =========== Less: Estimated executory costs 8 ----------- Net minimum lease payments 87 Less: Imputed interest 36 ----------- Present value of net minimum 51 lease payments Due in 1994 17 ----------- Due after 1994 $ 34 =====================================================================
* Minimum lease payments have not been reduced by minimum sublease rentals due in the future under noncancelable subleases related to capital and operating leases in the amounts of $0 and $135, respectively. Rental expense under operating leases was $429 in 1993, $453 in 1992 and $486 in 1991. 22. Other Liabilities
- --------------------------------------------------------------------- December 31 1993 1992 - --------------------------------------------------------------------- Accrued postretirement benefits cost (see Note 26) $5,998 $5,964 Reserves for employee-related costs 989 750 Miscellaneous 1,213 993 -------------------- $8,200 $7,707 =====================================================================
23. Stockholders' Equity Shares of new common stock issued in connection with employee compensation and benefit plans were 2,569,201 in 1993, 3,766,099 in 1992 and 2,179,976 in 1991. Shares repurchased and retired were 785,800 in 1991. 24. Compensation Plans In 1990, the Board of Directors approved the adoption of a worldwide Corporate Sharing Program. Under the program, in February 1991, essentially all employees each received a one-time grant of options to acquire 100 shares of DuPont common stock at the fair market value ($38.25 per share) at date of grant. Common shares subject to option under this Plan follows:
- --------------------------------------------------------------------- 1993 1992 1991 - --------------------------------------------------------------------- Outstanding at January 1 10,525,892 12,693,600 -- Options: Granted -- -- 13,228,900 Exercised 1,534,403 1,960,028 1,700 Terminated 74,780 207,680 533,600 Outstanding at December 31 8,916,709 10,525,892 12,693,600 =====================================================================
Awards for 1993 under the DuPont Stock Performance Plan (granted to key employees in 1994) consisted of 2,308,490 options to acquire DuPont common stock at fair market value of $52.50 per share. Payment of the purchase price must be made in cash or in DuPont common stock (at fair market value on the date of exercise). Common shares subject to option under this Plan, including options granted in prior years under plans of acquired companies, follows: 50 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE -------------------------------------
- ------------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------------ Outstanding at January 1 13,594,606 13,822,375 13,516,271 Options granted 2,160,360 2,425,130 2,955,450 Average price $46.01 $49.21 $36.22 Options exercised 1,092,473 2,456,592 2,073,691 Average price $27.77 $26.78 $24.73 Options expired or terminated 108,572 196,307 575,655 At December 31: Participants 1,226 1,188 1,166 Options outstanding 14,553,921 13,594,606 13,822,375 Average price $37.62 $35.47 $31.47 Options exercisable 12,418,711 11,202,016 10,991,715 Shares available for option 26,215,426 25,092,886 24,651,486 ========================================================================
At December 31, 1993, 700,473 stock appreciation rights (SARs) were outstanding, at an average option price of $32.06 per share. SARs may be exercised only in tandem with the exercise of an accompanying stock option. As each SAR is exercised, one additional stock option is cancelled. Expiration dates for outstanding options and SARs ranged from February 20, 1994 to July 26, 2003. Awards under the Variable Compensation Plan may be granted in stock and/or cash to employees who have contributed most in a general way to the company's success, consideration being given to ability to succeed to more important managerial responsibility. Such awards were $87 for 1993, $87 for 1992 and $125 for 1991. Amounts credited to the Variable Compensation Fund are dependent on company earnings, and are subject to maximum limits as defined by the Plan. The amounts credited to the fund were $89 in 1993, $85 in 1992 and $125 in 1991. In accordance with the terms of the Variable Compensation Plan and similar plans of subsidiaries, 870,447 shares of common stock were awaiting delivery from awards for 1993 and prior years. 25. Pensions The company has noncontributory defined benefit plans covering substantially all U.S. employees. The benefits for these plans are based primarily on years of service and employees' pay near retirement. The company's funding policy is consistent with the funding requirements of federal law and regulations. Pension coverage for employees of the company's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate plans. Obligations under such plans are systematically provided for by depositing funds with trustees, under insurance policies or by book reserves. Net pension credit for defined benefit plans includes the following components:
- --------------------------------------------------------------------------------------------------------------- 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------- Service cost - benefits earned during the period $ 301 $ 283 $ 259 Interest cost on projected benefit obligation 1,038 980 860 Return on assets: Actual gain $ (1,880) $ (1,055) $ (2,937) Deferred gain (loss) 617 (1,263) (164) (1,219) 1,789 (1,148) -------- --------- --------- Amortization of net gains and prior service cost (123) (127) (142) ------- ------ ------- Net pension credit $ (47) $ (83) $ (171) ===============================================================================================================
The change in the annual pension credit was primarily due to the discount rate used to determine the present value of future benefits. 51 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- The funded status of these plans was as follows:
- ------------------------------------------------------------------------------------------------------------ December 31 1993 1992 - ------------------------------------------------------------------------------------------------------------ Actuarial present value of: Vested benefit obligation $ (11,681) $ (9,834) --------- --------- Accumulated benefit obligation $ (12,177) $ (10,218) --------- --------- Projected benefit obligation $ (14,195) $ (11,815) Plan assets at fair value 15,250 14,648 --------- --------- Excess of assets over projected benefit obligation 1,055 2,833 Unrecognized net gains/1/ (35) (1,792) Unrecognized prior service cost 364 407 --------- --------- Prepaid pension cost/2/ $ 1,384 $ 1,448 ============================================================================================================
/1/ Includes the unamortized balance of $(1,513) and $(1,691) at December 31, 1993 and 1992, respectively, of unrecognized net gain at January 1, 1985, the initial application date of Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions." /2/ Excludes the pension liability for unfunded plans of $744 and $617 and the related projected benefit obligation of $1,228 and $941 at December 31, 1993 and 1992, respectively. For U.S. plans, the projected benefit obligation was determined using a discount rate of 7.25 percent at December 31, 1993 and 8.5 percent at December 31, 1992, and an assumed long-term rate of compensation increase of 5 percent. The assumed long-term rate of return on plan assets is 9 percent. Plan assets consist principally of common stocks and U.S. government obligations. For non-U.S. plans, no one of which was material, similar economic assumptions were used. The Omnibus Budget Reconciliation Act of 1990 permits employers to transfer some of the excess funds from an overfunded pension trust to pay the company portion of certain postretirement health care benefits. The company transferred $260 million and $200 million during 1993 and 1992, respectively, to a special retiree health care account to be used toward the payment of these benefits. These transfers had no impact on earnings (see Note 26). 26. Other Postretirement Benefits The parent company and certain subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans are unfunded, and approved claims are paid from company funds. Under the terms of the benefit plans, the company reserves the right to change, modify or discontinue the plans. In 1992 the company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Medical, dental and life insurance costs for these plans and related disclosures for 1993 and 1992 are determined under the provisions of SFAS No. 106. Cash expenditures are not affected by this accounting change. At January 1, 1992, the accumulated postretirement benefit obligation was $5,990, and related accrued liabilities were $68, resulting in a transition charge of $5,922. The cost of these benefits was $347 in 1993 and $591 in 1992. The decrease in cost in 1993 versus 1992 was due to plan changes, as discussed below. In 1991, $247 of such cost was expensed as paid. Other postretirement benefits cost for 1993 and 1992 includes the following components:
- ------------------------------------------------------------------------------------------ Health Life Care Insurance Total - ------------------------------------------------------------------------------------------ 1993 Service cost - benefits allocated to current period $ 55 $ 12 $ 67 Interest cost on accumulated postretirement benefit obligation 305 69 374 Amortization of net gains and prior service credit (94) -- (94) ------------------------------------- Other postretirement benefits cost $ 266 $ 81 $ 347 ------------------------------------- 1992 Service cost - benefits allocated to current period $ 82 $ 11 $ 93 Interest cost on accumulated postretirement benefit obligation 431 67 498 ------------------------------------- Other postretirement benefits cost $ 513 $ 78 $ 591 ==========================================================================================
52 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- The following provides a reconciliation of the accumulated postretirement benefit obligation to the liabilities reflected in the balance sheet at December 31, 1993 and 1992.
- -------------------------------------------------------------------------------- Health Life Care Insurance Total - -------------------------------------------------------------------------------- 1993 Accumulated postretirement benefit obligation for: Current pensioners and survivors $ (2,993) $ (692) $ (3,685) Fully eligible employees (146) -- (146) Other employees (934) (404) (1,338) ------------------------------------- (4,073) (1,096) (5,169) Unrecognized net loss/(gain) (285) 252 (33) Unrecognized prior service credit (1,139) -- (1,139) ------------------------------------- Accrued postretirement benefits cost $ (5,497) $ (844) $ (6,341) ===================================== Amount included in Other Accrued Liabilities (see Note 19) $ 343 ========= Amount included in Other Liabilities (see Note 22) $ 5,998 - ----------------------------------------------------------------------========= 1992 Accumulated postretirement benefit obligation for: Current pensioners and survivors $ (3,144) $ (576) $ (3,720) Fully eligible employees (879) -- (879) Other employees (909) (253) (1,162) ------------------------------------- (4,932) (829) (5,761) Unrecognized net loss/(gain) (554) 7 (547) ------------------------------------- Accrued postretirement benefits cost $ (5,486) $ (822) $ (6,308) ===================================== Amount included in Other Accrued Liabilities (see Note 19) $ 344 ========= Amount included in Other Liabilities (see Note 22) $ 5,964 ================================================================================
On December 31, 1992 the company announced changes in its health care benefits programs in the United States. These changes provide for increased cost control through prevention and managed care, and for increased cost sharing by employees and pensioners. The impact of these changes resulted in an unrecognized prior service credit of $1,219 at the beginning of 1993; the accumulated postretirement benefit obligation was reduced by a similar amount. The health care accumulated postretirement benefit obligation was determined at December 31, 1993 and 1992 using health care cost escalation rates of 10 percent and 11 percent, respectively, decreasing to 5 percent over ten years. The assumed long-term rate of compensation increase used for life insurance was 5 percent. The discount rate was 7.25 percent at December 31, 1993 and 8.5 percent at December 31, 1992. A one-percentage-point increase in the health care cost escalation rate would have increased the accumulated postretirement benefit obligation by $446 at December 31, 1993, and the 1993 other postretirement benefit cost would have increased by $46. 27. Commitments and Contingent Liabilities The company has various purchase commitments for materials, supplies and items of permanent investment incident to the ordinary conduct of business. In the aggregate, such commitments are not at prices in excess of current market. The company is subject to various lawsuits and claims with respect to such matters as product liabilities, governmental regulations and other actions arising out of the normal course of business. While the effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists, in the opinion of company counsel, the ultimate liabilities resulting from such lawsuits and claims will not materially affect the consolidated financial position of the company. The company is also subject to contingencies pursuant to environmental laws and regulations that in the future may require the company to take action to correct the effects on the environment of prior disposal or release of chemical or petroleum substances by the company or other parties. The company has accrued for certain environmental remediation activities consistent with the policy set forth in Note 1. Although future remediation accruals and expenditures could be significant, the effect on future financial results is not subject to reasonable estimation. Management does not anticipate, however, that they will have a material adverse effect on the consolidated financial position of the company. To hedge against the adverse impact of foreign currency fluctuations on the monetary assets and liabilities of operations outside the United States, the company enters into forward exchange contracts. At December 31, 1993, the company had outstanding forward exchange contracts maturing between January 4, 1994 and December 19, 1996 to purchase $6,764 (principally the U.K. pound [$2,934] and 53 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- Norwegian krone [$1,517]), and to sell $2,832 (principally the Norwegian krone [$478], Italian lira [$413], Canadian dollar [$304], and French franc [$271]) of various currencies. The company's balance sheet at December 31, 1993 reflects an accrual of $36 for unrealized losses associated with these contracts. The amounts recorded approximate fair value of forward exchange contracts based on quoted prices for contracts of comparable maturities and terms. As described above and in Notes 18 and 20, the company has entered into a variety of contractual agreements (financial instruments) to hedge exposures to interest rate and foreign exchange risks. The counterparties to these agreements are major financial institutions. The company is exposed to credit loss in the event of nonperformance by these counterparties. The company manages this exposure to credit loss through credit approvals, limits and monitoring procedures and, where possible, by restricting the period over which unpaid balances are allowed to accumulate. The company does not anticipate nonperformance by counterparties to these agreements and no material loss would be expected from such nonperformance. The company has indirectly guaranteed various debt obligations under agreements with certain affiliated and other companies to provide specified minimum revenues from shipments or purchases of products. At December 31, 1993, these indirect guarantees totaled $14. In addition, at December 31, 1993, the company had directly guaranteed $620 of the obligations of certain affiliated companies and others. No material loss is anticipated by reason of such agreements and guarantees. 28. Geographic Information
- ------------------------------------------------------------------------------------------------------------------------- United Other States Europe Regions Consolidated - ------------------------------------------------------------------------------------------------------------------------- 1993 Sales to Unaffiliated Customers/1/ $ 20,342 $ 12,639 $ 4,117 $ 37,098 Transfers Between Geographic Areas/2/ 2,260 395 522 -- -------------------------------------------------------------- Total $ 22,602 $ 13,034 $ 4,639 $ 37,098 ============================================================== After-Tax Operating Income $ 133 $ 721 $ 63 $ 917 Identifiable Assets at December 31 $ 17,117 $ 9,995 $ 3,812 $ 30,924 - ------------------------------------------------------------------------------------------------------------------------- 1992 Sales to Unaffiliated Customers/1/ $ 20,331 $ 13,571 $ 3,897 $ 37,799 Transfers Between Geographic Areas/2/ 2,477 298 469 -- -------------------------------------------------------------- Total $ 22,808 $ 13,869 $ 4,366 $ 37,799 ============================================================== After-Tax Operating Income $ 528 $ 624 $ 89 $ 1,241 Identifiable Assets at December 31 $ 19,197 $ 9,667 $ 3,827 $ 32,691 - ------------------------------------------------------------------------------------------------------------------------- 1991 Sales to Unaffiliated Customers/1/ $ 21,609 $ 13,041 $ 4,045 $ 38,695 Transfers Between Geographic Areas/2/ 2,467 378 417 -- -------------------------------------------------------------- Total $ 24,076 $ 13,419 $ 4,462 $ 38,695 ============================================================== After-Tax Operating Income $ 861 $ 961 $ (50) $ 1,772 Identifiable Assets at December 31 $ 19,345 $ 8,987 $ 3,537 $ 31,869 =========================================================================================================================
/1/ Sales outside the United States of products manufactured in and exported from the United States totaled $3,500 in 1993, $3,509 in 1992 and $3,812 in 1991. /2/ Products are transferred between geographic areas on a basis intended to reflect as nearly as practicable the "market value" of the products. 54 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- 29. Industry Segment Information The company has five principal business segments that manufacture and sell a wide range of products to many different markets, including the energy, transportation, textile, construction, automotive, electronics, printing, health care, packaging and agricultural markets. The company's sales are not materially dependent on a single customer or small group of customers. The Fibers and Polymers segments, however, have several large customers in their respective industries that are important to these segments' operating results.
- ----------------------------------------------------------------------------------------------------------------------------------- Diversified Chemicals Fibers Polymers Petroleum Businesses Consolidated - ----------------------------------------------------------------------------------------------------------------------------------- 1993 Sales to Unaffiliated Customers/1/ $ 3,546 $ 6,188 $ 5,869 $ 15,771/2/ $ 5,724 $ 37,098 Transfers Between Segments 475 14 23 428 1 - ------------------------------------------------------------------------------------------ Total $ 4,021 $ 6,202 $ 5,892 $ 16,199 $ 5,725 $ 37,098 ========================================================================================== Operating Profit $ 237 $ 258 $ 255 $ 1,195 $ (495) $ 1,450 Provision for Income Taxes (99) (144) (108) (428) 162 (617) Equity in Earnings of Affiliates 28 55 30 45 (74) 84 ------------------------------------------------------------------------------------------ After-Tax Operating Income/3, 4, 5/ $ 166 $ 169 $ 177 $ 812/6/ $ (407) $ 917/7/ ========================================================================================== Identifiable Assets at December 31 $ 2,960 $ 5,771 $ 5,226 $ 11,938 $ 5,029 $ 30,924/8/ ========================================================================================== Depreciation, Depletion and Amortization $ 303 $ 658 $ 527 $ 1,379 $ 460 $ 3,451/9/ Capital Expenditures $ 294 $ 751 $ 428 $ 1,659 $ 329 $ 3,655/10/ ===================================================================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------- Diversified Chemicals Fibers Polymers Petroleum Businesses Consolidated - ----------------------------------------------------------------------------------------------------------------------------------- 1992 Sales to Unaffiliated Customers/1/ $ 3,617 $ 6,074 $ 5,856 $ 16,065/2/ $ 6,187 $ 37,799 ------------------------------------------------------------------------------------------ Transfers Between Segments 187 6 51 414 5 - Total $ 3,804 $ 6,080 $ 5,907 $ 16,479 $ 6,192 $ 37,799 ========================================================================================== Operating Profit $ 324 $ 591 $ 471 $ 1,008 $ (182) $ 2,212 Provision for Income Taxes (128) (246) (185) (707) 101 (1,165) Equity in Earnings of Affiliates 30 64 32 36 32 194 ------------------------------------------------------------------------------------------ After-Tax Operating Income/11/ $ 226 $ 409 $ 318 $ 337 $ (49)/12/ $ 1,241/7/ ========================================================================================== Identifiable Assets at December 31 $ 3,201 $ 5,738 $ 5,412 $ 12,307 $ 6,033 $ 32,691/8/ ========================================================================================== Depreciation, Depletion and Amortization $ 317 $ 592 $ 409 $ 1,006 $ 410 $ 2,839/9/ Capital Expenditures $ 366 $ 856 $ 642 $ 1,781 $ 558 $ 4,397/10/ ===================================================================================================================================
55 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE -------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- Diversified Chemicals Fibers Polymers Petroleum Businesses/13/ Consolidated - ------------------------------------------------------------------------------------------------------------------------------------ 1991 Sales to Unaffiliated Customers/1/ $ 3,478 $ 6,056 $ 5,565 $ 15,851/2/ $ 7,745 $ 38,695 Transfers Between Segments 216 11 57 390 149 -- ------------------------------------------------------------------------------------------- Total $ 3,694 $ 6,067 $ 5,622 $ 16,241 $ 7,894 $ 38,695 =========================================================================================== Operating Profit $ 439 $ 603 $ 223 $ 1,872 $ 246 $ 3,383 Provision for Income Taxes (161) (226) (79) (1,088) (44) (1,598) Equity in Earnings of Affiliates 38 39 (25) 30 (95) (13) ------------------------------------------------------------------------------------------- After-Tax Operating Income/14/ $ 316/15/ $ 416/16/ $ 119/17/ $ 814/18/ $ 107/19/ $ 1,772/7/ =========================================================================================== Identifiable Assets at December 31 $ 2,985 $ 5,459 $ 5,061 $ 12,140 $ 6,224 $ 31,869/8/ =========================================================================================== Depreciation, Depletion and Amortization $ 294 $ 566 $ 445 $ 943 $ 571 $ 2,917/9/ Capital Expenditures $ 476 $ 765 $ 607 $ 2,301 $ 680 $ 5,026/10/ ====================================================================================================================================
/1/ Sales of refined petroleum products of $12,403 in 1993, $12,681 in 1992 and $12,232 in 1991 exceeded 10 percent of consolidated sales. /2/ Excludes crude oil and refined product exchanges and trading transactions. /3/ Includes the following third quarter charges for asset write-downs, employee separation costs, facility shutdowns and other restructuring costs (see Note 7): - ----------------------------------------------------- Chemicals/a/ $ 112 Fibers/b/ 266 Polymers/c/ 148 Petroleum/d/ 172 Diversified Businesses/e/ 597 -------- $1,295 =====================================================
/a/ Includes $59 for asset write-downs and facility shutdowns for the fluorochemicals and specialty chemicals businesses. /b/ Includes $46 for facility shutdowns and asset write-downs, primarily for the nylon business. /c/ Includes $64 for shutdown of a portion of a polymers plant in LaPorte, Texas. /d/ Includes $147 primarily for asset write-downs of certain North American petroleum-producing properties sold in the fourth quarter. /e/ Includes $448 for asset write-downs, primarily intangibles and facilities for the printing and publishing business. /4/ Includes a net benefit of $265 resulting from tax law changes. The Petroleum segment reflects $230, primarily due to a reduction in deferred U.K. petroleum revenue taxes, and $35 is reflected in the remaining segments (Chemicals, $6; Fibers, $10; Polymers, $10; and Diversified Businesses, $9). /5/ Includes a net charge of $92 related to certain product liability claims and litigation costs ($144, of which $126 is associated with the "Benlate" DF 50 fungicide recall) and a loss on the sale of a polyethylene business ($17), partly offset by a gain from the sale of the Remington Arms Company ($69). The foregoing amounts are reflected in the Chemicals ($10), Polymers ($25) and Diversified Businesses ($57) segments. /6/ Includes a $21 loss from sale of petroleum-producing properties and a $32 gain from exchange of North Sea properties. /7/ The following reconciles After-Tax Operating Income to Net Income:
- ------------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------------ After-Tax Operating Income $ 917 $1,241 $1,772 Interest and Other Corporate Expenses Net of Tax/a/ (351) (266) (369) ---------------------------- Net Income/b/ $ 566 $ 975 $1,403 ========================================================================
/a/ Includes interest and debt expense and other corporate expenses such as exchange gains and losses (including the company's share of equity affiliates' exchange gains and losses), minority interests in earnings of consolidated subsidiaries and amortization of capitalized interest. The year 1992 includes an exchange gain of $97 related to unhedged non-U.S. deferred tax liabilities, which were established on the adoption of SFAS No. 109. The year 1991 includes interest benefit of $60 associated with refunds of taxes paid in prior years. /b/ Before extraordinary item and transition effect of accounting changes. See the Consolidated Income Statement on page 37. /8/ The following reconciles Identifiable Assets to Total Assets:
- ------------------------------------------------------------------------ 1993 1992 1991 - ------------------------------------------------------------------------ Identifiable Assets at December 31 $30,924 $32,691 $31,869 Investment in Affiliates 1,607 1,746 1,580 Corporate Assets 4,522 4,433 3,110 ----------------------------- Total Assets at December 31 $37,053 $38,870 $36,559 ========================================================================
/9/ Includes depreciation on research and development facilities, impairment of unproved properties and depreciation reflected in restructuring charges. /10/ Excludes investments in affiliates. 56 DUPONT - -------------------------------------------------- Notes to Financial Statements - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE ------------------------------------- /11/ Includes the following fourth quarter charges for termination incentives and payments, as well as other charges, related to business restructurings (see Note 7): - ---------------------------------------------------- Chemicals/a/ $ 51 Fibers/b/ 69 Polymers 22 Petroleum/c/ 96 Diversified Businesses/d/ 91 ------ $329 ====================================================
/a/ Includes $38 charge for project and facility shutdowns. /b/ Includes $38 charge principally for shutdown of fire-damaged facilities. /c/ Includes $17 charge for shutdown of refinery facilities. /d/ Includes $42 charge principally for withdrawal from certain printing and publishing business lines. /12/ Includes charge of $134 associated with "Benlate" DF 50 fungicide recall. /13/ Effective December 31, 1991, the company's coal business is accounted for under the equity method with its results included in the Diversified Businesses segment. For 1991, the Diversified Businesses segment includes the following amounts for the coal business (see Note 6):
- ------------------------------------------------------- 1991 - ------------------------------------------------------- Sales to Unaffiliated Customers $1,752 Transfers Between Segments 145 -------- Total $1,897 -------- Operating Profit $ 524 Provision for Income Taxes (264) Equity in Earnings of Affiliates 1 -------- After-Tax Operating Income $ 261/a/ ======== Identifiable Assets at December 31 $ --/b/ ======== Depreciation, Depletion and Amortization $ 167 Capital Expenditures $ 199 =======================================================
/a/ Includes $152 gain from sale of an interest in the coal business. /b/ Effective December 31, 1991, the company's coal business became part of a joint venture accounted for under the equity method. If fully consolidated at this date, identifiable assets of the coal business would have been $2,588. /14/ Includes the following fourth quarter charges related to the company's cost reduction and business restructuring programs (see Note 7): - ---------------------------------------------------- Chemicals $ 55 Fibers 116 Polymers 141 Petroleum 54 Diversified Businesses 171 ------ $537 ====================================================
/15/ Includes $89 gain from sale of methanol business partly offset by $18 charge associated with a partial withdrawal from the "Freon" chlorofluorocarbon manufacturing business. /16/ Includes $29 charge for facility shutdowns. /17/ Includes $11 gain from sale of a business. /18/ Includes $54 benefit from refunds of taxes paid in prior years, partly offset by charges of $20 related to supplemental amortization for U.S. unproved properties and $20 for withdrawal from operations in Ecuador. /19/ Includes $152 gain from sale of an interest in coal business (see Note 6) and $161 gain from sales of interests in other businesses and assets. Also includes charges of $216 associated with "Benlate" DF 50 fungicide recall and $16 associated with additional restructuring activities. See segment discussions on pages 20 to 28 for a description of each industry segment. Products are transferred between segments on a basis intended to reflect as nearly as practicable the "market value" of the products. 57 DUPONT - -------------------------------------------------- Supplemental Petroleum Data - -------------------------------------------------- DOLLARS IN MILLIONS ------------------------------------- Oil- and Gas-Producing Activities The disclosures on pages 58 through 63 are presented in accordance with the provisions of Statement of Financial Accounting Standards No. 69. Accordingly, volumes of reserves and production exclude royalty interests of others, and royalty payments are reflected as reductions in revenues./1/ In January 1989, the U.S. Treasury Department was authorized by the President to modify the sanctions levied against Libya in 1986. In June 1989, Conoco was granted a license by the Treasury Department to resume its activities in Libya, and commenced negotiations with the Libyan government's national oil company. Although negotiations are continuing, Conoco has not resumed its participation in Libyan operations. Accordingly, disclosures for 1993 continue to exclude petroleum reserve data applicable to the company's petroleum assets in Libya. Estimated Proved Reserves of Oil and Gas/2/
- ------------------------------------------------------------------------------------------------------------------------------------ Total Worldwide United States Europe Other Regions/3/ - ------------------------------------------------------------------------------------------------------------------------------------ Oil/4/--in millions of barrels 1993 1992 1991 1993 1992 1991 1993 1992 1991 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed and Undeveloped Reserves of Fully Consolidated Companies Beginning of the year 1,034 1,112 1,045 421 470 475 391 392 290 222 250 280 Revisions and other changes 14 26 3 (6) (13) 6 13 37 (7) 7 2 4 Extensions and discoveries 83 23 136 19 9 13 41 10 121 23 4 2 Improved recovery 7 3 44 5 3 12 -- -- 32 2 -- -- Purchase of reserves 25 5 17 7 5 17 2 -- -- 16 -- -- Sale of reserves (64) (12) (9) (62) (12) (9) (2) -- -- -- -- -- Production (135) (123) (124) (40) (41) (44) (55) (48) (44) (40) (34) (36) --------------------------------------------------------------------------------------------- End of year 964 1,034 1,112 344 421 470 390 391 392 230 222 250 - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed Reserves of Fully Consolidated Companies Beginning of year 750 778 856 397 441 455 153 118 154 200 219 247 End of year 708 750 778 332 397 441 160 153 118 216 200 219 ==================================================================================================================================== Gas--in billion cubic feet - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed and Undeveloped Reserves of Fully Consolidated Companies - ------------------------------------------------------------------------------------------------------------------------------------ Beginning of year 3,445 3,619 3,850 1,928 2,149 2,299 1,417 1,321 1,383 100 149 168 Revisions and other changes 72 (36) (114) (22) (55) (128) 54 56 19 40 (37) (5) Extensions and discoveries 712 307 185 196 127 166 507 172 10 9 8 9 Improved recovery 1 -- 39 1 -- 9 -- -- 30 -- -- -- Purchase of reserves 53 37 166 53 37 166 -- -- -- -- -- -- Sale of reserves (122) (51) (90) (49) (51) (87) (68) -- -- (5) -- (3) Production (481) (431) (417) (305) (279) (276) (158) (132) (121) (18) (20) (20) --------------------------------------------------------------------------------------------- End of year 3,680 3,445 3,619 1,802 1,928 2,149 1,752 1,417 1,321 126 100 149 - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed and Undeveloped Reserves of Equity Affiliates Beginning of year 368 128 -- 368 128 -- -- -- -- -- -- -- Revisions and other changes 72 167 128 72 167 128 -- -- -- -- -- -- Extensions and discoveries -- 75 -- -- 75 -- -- -- -- -- -- -- Purchase of reserves 151 -- -- 151 -- -- -- -- -- -- -- -- Production (5) (2) -- (5) (2) -- -- -- -- -- -- -- --------------------------------------------------------------------------------------------- End of year 586 368 128 586 368 128 -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed and Undeveloped Reserves Total 4,266 3,813 3,747 2,388 2,296 2,277 1,752 1,417 1,321 126 100 149 - ------------------------------------------------------------------------------------------------------------------------------------ Proved Developed Reserves of Fully Consolidated Companies Beginning of year 2,539 2,750 2,753 1,837 2,013 1,984 618 602 622 84 135 147 End of year 2,570 2,539 2,750 1,717 1,837 2,013 738 618 602 115 84 135 ====================================================================================================================================
/1/ Elsewhere in this Annual Report, sales data for 1991 relating to production outside the United States include royalty interests attributable to other parties, and related royalty payments are reflected as costs. /2/ Oil reserves comprise crude oil and condensate and natural gas liquids (NGL) expected to be removed for the company's account from its natural gas deliveries. Royalty interests in reserves outside North America that are dependent on rates of production or prices were calculated using projected rates of production and prices that existed at the time the quantities were estimated. /3/ Includes Canada, Dubai and Indonesia. /4/ The company's share of equity affiliate oil reserves (19 million barrels in 1993 and 1992) is excluded. 58 DUPONT - -------------------------------- Supplemental Petroleum Data - -------------------------------- DOLLARS IN MILLIONS ------------------- Results of Operations for Oil- and Gas-Producing Activities
- ------------------------------------------------------------------------------------------------------------------------------------ Total Worldwide United States Europe Other Regions/1/ - ------------------------------------------------------------------------------------------------------------------------------------ 1993 1992 1991 1993 1992 1991 1993 1992 1991 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------------------ Revenues: Sales to unaffiliated customers $2,177 $1,990 $2,102 $ 538 $ 535 $ 564 $1,000 $ 874 $ 942 $ 639 $ 581 $ 596 Transfers to other company operations 930 1,003 1,115 558 583 720 372 407 363 -- 13 32 Exploration, including dry hole costs (329) (347) (493) (107) (82) (137) (109) (165) (163) (113) (100) (193) Production (868) (1,039) (978) (424) (492) (525) (363) (473) (384) (81) (74) (69) Depreciation, depletion, amortization and valuation provisions (1,140) (786) (744) (591)/2/ (433) (413) (468) (296) (242) (81) (57) (89) Other/3/ (20) (55) 141 (17) (8) 119 9 (28) 41 (12) (19) (19) Income taxes (281)/4/ (626) (881) 84 2 (98) (16)/4/ (219) (340) (349) (409) (443) ------------------------------------------------------------------------------------------------------ Results of operations of fully consolidated companies $ 469 $ 140 $ 262 $ 41 $ 105 $ 230 $ 425 $ 100 $ 217 $ 3 $ (65) $ (185) ------------------------------------------------------------------------------------------------------ Results of operations of equity affiliates (13) (13) (2) (1) (1) (2) (12) (12) -- -- -- -- ------------------------------------------------------------------------------------------------------ Total results of operations $ 456 $ 127 $ 260 $ 40 $ 104 $ 228 $ 413 $ 88 $ 217 $ 3 $ (65) $ (185) ====================================================================================================================================
/1/ Comprises exploration costs in all areas outside the United States and Europe and production operations primarily in Canada, Dubai and Indonesia. /2/ Includes a charge of $219 ($137 after taxes) for impairment of U.S. producing properties sold in the fourth quarter. /3/ Includes gain (loss) on disposal of fixed assets and other miscellaneous revenues and expenses. /4/ Includes a benefit of $241 resulting from tax law changes in the United Kingdom. 59 DUPONT - -------------------------------- Supplemental Petroleum Data - -------------------------------- DOLLARS IN MILLIONS ------------------- Capitalized Costs Relating to Oil- and Gas-Producing Activities
- ------------------------------------------------------------------------------------------------------------------------------------ Total Worldwide United States Europe Other Regions* - ------------------------------------------------------------------------------------------------------------------------------------ 1993 1992 1991 1993 1992 1991 1993 1992 1991 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------------------ Gross Costs: Proved properties $11,663 $11,356 $10,698 $ 4,934 $ 5,587 $ 5,619 $ 5,582 $ 4,732 $ 4,145 $ 1,147 $ 1,037 $ 934 Unproved properties 701 1,152 1,241 321 471 483 218 461 528 162 220 230 Accumulated depreciation, depletion, amortization and valuation allowances: Proved properties 6,467 6,171 5,677 3,023 3,244 3,050 2,604 2,169 1,895 840 758 732 Unproved properties 261 347 318 162 235 225 13 13 21 86 99 72 ---------------------------------------------------------------------------------------------------------- Net costs of fully consolidated companies $ 5,636 $ 5,990 $ 5,944 $ 2,070 $ 2,579 $ 2,827 $ 3,183 $ 3,011 $ 2,757 $ 383 $ 400 $ 360 ---------------------------------------------------------------------------------------------------------- Net costs of equity affiliates 177 66 18 92 36 18 85 30 -- -- -- -- ---------------------------------------------------------------------------------------------------------- Total net costs $ 5,813 $ 6,056 $ 5,962 $ 2,162 $ 2,615 $ 2,845 $ 3,268 $ 3,041 $ 2,757 $ 383 $ 400 $ 360 ====================================================================================================================================
* Includes Canada, Dubai and Indonesia. 60 DUPONT - -------------------------------- Supplemental Petroleum Data - -------------------------------- DOLLARS IN MILLIONS ------------------- Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities/1/
- ------------------------------------------------------------------------------------------------------------------------------------ Total Worldwide United States Europe Other Regions/2/ - ------------------------------------------------------------------------------------------------------------------------------------ 1993 1992 1991 1993 1992 1991 1993 1992 1991 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------------------ Property acquisitions: Proved $ 111 $ 16 $ 227 $ 93 $ 16 $ 227 $ 5 $ -- $ -- $ 13 $ -- $ -- Unproved 11 23 217 8 7 24 -- -- 165/3/ 3 16 28 Exploration 352 432 653 83 99 172 158 221 279 111 112 202 Development 864 806 883 195 206 346 567 498 472 102 102 65 --------------------------------------------------------------------------------------------------------- Total for fully consolidated companies $1,338 $1,277 $1,980 $ 379 $ 328 $ 769 $ 730 $ 719 $ 916 $ 229 $ 230 $ 295 --------------------------------------------------------------------------------------------------------- Cost incurred for equity affiliates 70 38 10 16 19 10 54 19 -- -- -- -- --------------------------------------------------------------------------------------------------------- Total costs incurred $1,408 $1,315 $1,990 $ 395 $ 347 $ 779 $ 784 $ 738 $ 916 $ 229 $ 230 $ 295 ====================================================================================================================================
/1/ These data comprise all costs incurred in the activities shown, whether capitalized or charged to expense at the time they were incurred. /2/ Includes Canada, Dubai and Indonesia. /3/ Essentially reflects acquisitions of North Sea properties that contain probable reserves for which development is either underway or being actively planned. 61 DUPONT - -------------------------------- Supplemental Petroleum Data - -------------------------------- DOLLARS IN MILLIONS ------------------- Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves The information below has been prepared in accordance with Statement of Financial Accounting Standards No. 69, which requires the standardized measure of discounted future net cash flows to be based on year-end sales prices, costs and statutory income tax rates, and a 10 percent annual discount rate. Specifically, the per-barrel oil sales prices used to calculate the December 31, 1993 data averaged $11.00 for the United States and $12.47 for Europe and Other Regions, and the gas prices per thousand cubic feet averaged approximately $1.92 for the United States and $2.70 for Europe and Other Regions. Because prices used in the calculation are as of December 31, the standardized measure could vary significantly from year-to-year based on market conditions at that specific date. The projections should not be viewed as realistic estimates of future cash flows nor should the "standardized measure" be interpreted as representing current value to the company. Material revisions to estimates of proved reserves may occur in the future, development and production of the reserves may not occur in the periods assumed, actual prices realized are expected to vary significantly from those used and actual costs may also vary. The company's investment and operating decisions are not based on the information presented below, but on a wide range of reserve estimates that includes probable as well as proved reserves, and on different price and cost assumptions from those reflected in this information. Beyond the above considerations, the "standardized measure" is also not directly comparable with asset balances appearing elsewhere in the financial statements, because any such comparison would require reconciling adjustments, including reduction of the asset balances for related deferred income taxes.
- ----------------------------------------------------------------------------------------------------------------------------- Total Worldwide United States Europe Other Regions* 1993 1992 1993 1992 1993 1992 1993 1992 - ----------------------------------------------------------------------------------------------------------------------------- Future cash flows: Revenues $ 19,558 $ 24,439 $ 7,199 $ 10,027 $ 9,380 $ 10,785 $ 2,979 $ 3,627 Production costs (9,117) (10,011) (4,361) (5,228) (4,005) (4,119) (751) (664) Development costs (1,802) (1,719) (515) (534) (1,143) (1,001) (144) (184) Income tax expense (3,607) (6,022) (414) (1,060) (1,514) (2,585) (1,679) (2,377) -------------------------------------------------------------------------------------------- Future net cash flows $ 5,032 $ 6,687 $ 1,909 $ 3,205 $ 2,718 $ 3,080 $ 405 $ 402 Discounted to present value at a 10% annual rate (1,818) (2,379) (655) (1,239) (1,021) (1,000) (142) (140) -------------------------------------------------------------------------------------------- Standardized measure of discounted future net cash flows of fully consolidated companies $ 3,214 $ 4,308 $ 1,254 $ 1,966 $ 1,697 $ 2,080 $ 263 $ 262 -------------------------------------------------------------------------------------------- Standardized measure of discounted future net cash flows of equity affiliates 99 70 96 55 3 15 -- -- -------------------------------------------------------------------------------------------- Standardized measure of discounted future net cash flows - Total $ 3,313 $ 4,378 $ 1,350 $ 2,021 $ 1,700 $ 2,095 $ 263 $ 262 =============================================================================================================================
* Includes Canada, Dubai and Indonesia. 62 DUPONT - -------------------------------- Supplemental Petroleum Data - -------------------------------- DOLLARS IN MILLIONS ------------------- Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves For Fully Consolidated Companies
- -------------------------------------------------------------------------------------------------------------------- 1993 1992 1991 - -------------------------------------------------------------------------------------------------------------------- Balance at January 1 $ 4,308 $ 3,558 $ 6,059 Sales and transfers of oil and gas produced, net of production costs (2,239) (2,053) (2,245) Development costs incurred during the period 864 833 883 Net changes in prices and in development and production costs (3,017) 765 (7,487) Extensions, discoveries and improved recovery, less related costs 915 453 840 Revisions of previous quantity estimates 130 178 284 Purchases (sales) of reserves in place-net (120) (42) 39 Accretion of discount 791 689 1,301 Net change in income taxes 1,493 (369) 3,891 Other 89 296 (7) --------------------------------- Balance at December 31 $ 3,214 $ 4,308 $ 3,558 ====================================================================================================================
63 DUPONT - -------------------------------------------------- Quarterly Financial Data - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE -------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------- Quarter Ended March 31 June 30 September 30 December 31 - ---------------------------------------------------------------------------------------------------------------------------------- 1993 Sales $ 9,070 $ 9,546 $ 9,231 $ 9,251 Cost of Goods Sold and Other Expenses/1/ 8,247 8,684 10,375 8,983 Net Income (Loss) 493/2/ 516/3/ (680)/4/ 237/5,6/ Earnings (Loss) Per Share of Common Stock .73 .76 (1.01) .35/5/ Dividends Per Share of Common Stock .44 .44 .44 .44 Market Price of Common Stock/7/: High 50 53 7/8 49 5/8 50 1/2 Low 44 1/2 46 1/2 45 7/8 44 1/2 - ---------------------------------------------------------------------------------------------------------------------------------- 1992 Sales $ 9,160 $ 9,745 $ 9,733 $ 9,161 Cost of Goods Sold and Other Expenses/1/ 8,393 9,021 9,082 9,402 Net Income (Loss)/8/ 439 277/9/ 420 (161)/10/ Earnings (Loss) Per Share of Common Stock/8/ .64 .41 .63 (.25) Dividends Per Share of Common Stock .42 .44 .44 .44 Market Price of Common Stock/7/: High 50 1/2 54 7/8 54 1/4 50 7/8 Low 43 1/2 45 7/8 46 3/8 45 1/4 ==================================================================================================================================
/1/ Excludes interest and debt expense and provision for income taxes. /2/ Includes a gain of $32 ($.05 per share) from exchange of North Sea properties. /3/ Includes a loss of $21 ($.03 per share) from sale of petroleum-producing properties. /4/ Includes restructuring charges of $1,295 ($1.91 per share), partially offset by a net tax benefit of $265 ($.39 per share). /5/ Before extraordinary item. /6/ Includes net charge of $92 ($.13 per share) related to certain product liability claims and litigation costs ($144, of which $126 is associated with the "Benlate" DF 50 fungicide recall) and a loss on the sale of a polyethylene business ($17), partly offset by a gain from the sale of the Remington Arms Company ($69). Also includes a benefit of about $50 ($.07 per share) as a result of the liquidation of certain LIFO inventory quantities. /7/ As reported on the New York Stock Exchange, Inc. Composite Transactions Tape. /8/ Before extraordinary item and transition effect of accounting changes. See the Consolidated Income Statement on page 37. Includes exchange gain (loss) related to unhedged non-U.S. deferred tax liabilities, which were established on the adoption of SFAS No. 109, for quarters ended: March 31 - $55 ($.08 per share); June 30 - $(73) ($.11 per share); September 30 - $44 ($.07 per share); December 31 - $71 ($.10 per share). /9/ Includes charge of $134 ($.20 per share) associated with "Benlate" DF 50 fungicide recall. /10/ Includes charge of $329 ($.49 per share) for termination incentives and payments, as well as certain other charges, related to business restructurings. - -------------------------------- Consolidated Geographic Data - -------------------------------- DOLLARS IN MILLIONS -------------------
- ---------------------------------------------------------------------------------------------- Capital Total Assets Average Expenditures December 31 Employment - ---------------------------------------------------------------------------------------------- 1993 1992 1993 1992 1993 1992 - ---------------------------------------------------------------------------------------------- United States $ 1,842 $ 2,323 $20,610 $22,859 81,587 91,808 Europe 1,277 1,596 11,315 11,114 22,427 20,987 Other Regions 606 605 5,128 4,897 15,395 15,952 --------------------------------------------------------------- Total $ 3,725 $ 4,524 $37,053 $38,870 119,409 128,747 ==============================================================================================
Capital expenditures, total assets and average employment are assigned to geographic areas, generally based on physical location. 64 DUPONT - -------------------------------------------------- Five-Year Financial Review/1/ - -------------------------------------------------- DOLLARS IN MILLIONS, EXCEPT PER SHARE -------------------------------------
- ------------------------------------------------------------------------------------------------- 1993 1992 1991 1990 1989 - ------------------------------------------------------------------------------------------------- Summary of Operations Sales $37,098 $37,799 $38,695 $40,047 $35,534 Earnings Before Income Taxes $ 958 $ 1,811 $ 2,818 $ 4,154 $ 4,324 Provision for Income Taxes $ 392 $ 836 $ 1,415 $ 1,844 $ 1,844 Net Income/2/ $ 566 $ 975 $ 1,403 $ 2,310 $ 2,480 Percent of Average Stockholders' Equity/2/ 4.8% 8.1% 8.3% 14.3% 15.7% Earnings Per Share of Common Stock/2,3/ $ .83 $ 1.43 $ 2.08 $ 3.40 $ 3.53 - ------------------------------------------------------------------------------------------------- Financial Position at Year End Working Capital $ 1,460 $ 2,002 $ 3,381 $ 2,210 $ 1,996 Total Assets $37,053 $38,870 $36,559 $38,128 $34,715 Long-Term Borrowings and Capital Leases $ 6,531 $ 7,193 $ 6,456 $ 5,663 $ 4,149 Stockholders' Equity $11,230 $11,765 $16,739 $16,418 $15,798 Total Debt as Percent of Total Capitalization 45% 48% 33% 37% 33% - ------------------------------------------------------------------------------------------------- General For the Year: Capital Expenditures $ 3,725 $ 4,524 $ 5,246 $ 5,513 $ 4,481 Depreciation, Depletion and Amortization $ 2,833 $ 2,655 $ 2,640 $ 2,625 $ 2,530 Research and Development Expense $ 1,132 $ 1,277 $ 1,298 $ 1,428 $ 1,387 As Percent of Combined Segment Sales for: Chemicals, Fibers, Polymers and Diversified Businesses (excluding Coal) 5.1% 5.6% 5.8% 6.2% 6.2% Petroleum 0.3% 0.4% 0.4% 0.3% 0.5% Average Number of Shares Outstanding (millions) 677 673 671 676 701 Dividends Per Common Share $ 1.76 $ 1.74 $ 1.68 $ 1.62 $ 1.45 Dividends as Percent of Earnings on Common Stock/2/ 212% 122% 81% 48% 41% Common Stock Prices: High $53 7/8 $54 7/8 $50 $42 3/8 $42 1/8 Low $44 1/2 $43 1/2 $32 3/4 $31 3/8 $28 5/8 Year-End Close $48 1/4 $47 1/8 $46 5/8 $36 3/4 $41 At Year End: Employees (thousands) 114 125 133 144 146 Common Stockholders of Record (thousands) 181 188 195 199 196 Book Value Per Common Share $ 16.22 $ 17.08 $ 24.58 $ 24.16 $ 22.71 =================================================================================================
/1/ See Management's Discussion and Analysis on pages 30 to 34, Consolidated Income Statement on page 37, Notes to Financial Statements on pages 41 to 57 and Quarterly Financial Data on page 64 for information relating to significant items affecting the results of operations and financial position. /2/ Before effect on income of extraordinary item (1993 and 1992) and transition effect of accounting changes (1992). See the Consolidated Income Statement on page 37. /3/ Based on the average number of common shares outstanding. 65 DUPONT EX-21 6 SUBSIDIARIES OF REGISTRA EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT
NAME ORGANIZED UNDER LAWS OF - ------------------------------------------------------- ----------------------- Conoco Canada Limited.................................. Canada Conoco Developments Ltd................................ England Conoco Inc............................................. Delaware Conoco Indonesia Inc................................... Delaware Conoco International, Inc.............................. Delaware Conoco Investments Norge A/S........................... Norway Conoco Ireland Ltd..................................... Delaware Conoco Limited......................................... England Conoco Mineraloel GmbH................................. Germany Conoco Norway Inc...................................... Delaware Conoco Petroleum Limited............................... England Conoco Petroleum Norge A/S............................. Norway Conoco Pipe Line Company............................... Delaware Conoco Specialty Products, Inc......................... Delaware Conoco Timan-Pechora Ltd............................... Bermuda Conoco (U.K.) Limited.................................. England Consol Energy Inc. (50% owned)......................... Delaware Continental Oil Company of Libya....................... Delaware Danube Insurance Ltd................................... Bermuda Douglas Oil Company of California...................... California Dubai Petroleum Company................................ Delaware Du Pont Agrichemicals Caribe, Inc...................... Delaware Du Pont Argentina S.A.................................. Argentina Du Pont Asia Pacific, Ltd. ............................ Delaware Du Pont (Australia) Limited............................ Australia Du Pont Canada Inc. (76.49% owned)..................... Canada Du Pont Chemical and Energy Operations, Inc............ Delaware Du Pont Delaware, Inc.................................. Delaware Du Pont Diagnostics, Inc............................... Delaware Du Pont de Colombia, S.A............................... Colombia Du Pont de Nemours (Belgium) N.V....................... Belgium Du Pont de Nemours (Deutschland) GmbH.................. Germany Du Pont de Nemours (France) S.A........................ France Du Pont de Nemours International S.A................... Switzerland Du Pont de Nemours Italiana S.p.A...................... Italy Du Pont de Nemours (Luxembourg) S.A.................... Luxembourg Du Pont de Nemours (Nederland) B.V..................... Netherlands Du Pont do Brasil S.A.................................. Brazil Du Pont Electronic Materials, Inc...................... Delaware Du Pont Energy Company................................. Delaware Du Pont Engineering Products, S.A...................... Luxembourg Du Pont Feedstocks Company............................. Delaware Du Pont Foreign Sales Corporation...................... Virgin Islands Du Pont Iberica, S.A................................... Spain Du Pont (K.K.)......................................... Delaware Du Pont Korea, Ltd..................................... Republic of Korea Du Pont Merck Pharmaceutical Company (Delaware Partner- ship) (50% owned)..................................... Delaware
NAME ORGANIZED UNDER LAWS OF - ------------------------------------------------------- ----------------------- Du Pont Merck Pharma (Puerto Rico Partnership) (50% owned)................................................ Puerto Rico Du Pont (New Zealand) Ltd.............................. New Zealand Du Pont Photomasks, Inc................................ Texas Du Pont Polymeres S.A.................................. Luxembourg Du Pont, S.A. de C.V................................... Mexico Du Pont Scandanavia A.B................................ Sweden Du Pont (Singapore) Pte. Ltd........................... Singapore Du Pont (Singapore) Fibres Pte. Ltd. (90% owned)....... Singapore Du Pont Specialty Operations, B.V...................... Netherlands Du Pont Taiwan Ltd..................................... Taiwan Du Pont (Thailand) Co. Ltd............................. Thailand Du Pont (U.K.) Limited................................. England Kayo Oil Company....................................... Delaware Societe Europeene Des Carburants....................... Belgium World Wide Transport, Inc.............................. Liberia
Subsidiaries not listed would not, if considered in the aggregate as a single subsidiary, constitute a significant subsidiary. EX-23 7 CONSENT OF ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (No. 33-39161 and No. 33-48128) and Form S-8 (No. 33-51817, No. 33-43918, No. 2-74004, No. 33- 51821 and No. 33-36339) of E. I. du Pont de Nemours and Company of our report dated February 17, 1994 appearing on page 36 of the Annual Report to Stockholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appears on page 19 of this Form 10-K. Price Waterhouse Thirty South Seventeenth Street Philadelphia, Pennsylvania 19103 March 18, 1994 -----END PRIVACY-ENHANCED MESSAGE-----