SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 5(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) October 24, 2001
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
1-815 |
51-0014090 |
(State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
Of Incorporation) |
File Number) |
Identification No.) |
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 774-1000
1
Item 5. Other Events
The Registrant Files, pursuant to Regulation FD, its earnings news release dated October 24, 2001, entitled "DuPont Reports Third Quarter 2001 Earnings," a copy of which is below. This earnings news release is also filed in connection with Debt and/or Equity Securities that may be offered on a delayed or continuous basis under Registration Statements on Form S-3 (No. 33-53327, No. 33-61339, No. 33-60069 and No. 333-86363).
October 24, 2001 |
Contact: |
Clif Webb |
WILMINGTON, Del. |
302-774-4005 |
|
r-clifton.webb@usa.dupont.com |
DUPONT REPORTS THIRD QUARTER 2001 EARNINGS
Summary
Earnings Comparisons
($ per share diluted)
3Q'01 |
3Q'00 |
|
Underlying |
.12 |
.51 |
One-Time Items |
.01 |
.02 |
Reported |
.13 |
.53 |
2
"During the quarter we kept our focus on careful cash management and the actions needed to meet our growth targets over time," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer. "Clearly we are experiencing one of the most challenging business environments the company has faced in decades. DuPont has the financial strength to face this challenge and to continue to invest in the future."
Global Sales and Income
Net income including one-time items was $142 million, compared to earnings of $562 million in the third quarter of 2000.
One-Time Items
One-time items for third quarter 2001 and third quarter 2000 are described in the notes to the accompanying financial statements and are summarized in the table below:
$MM Pretax |
$MM After-Tax |
($ Per Share) |
||||
2001 |
2000 |
2001 |
2000 |
2001 |
2000 |
|
Pioneer/Monsanto MON810 Settlement |
(56) |
(35) |
(.04) |
|||
Pharmaceuticals Business - Tax Benefit |
49 |
.05 |
||||
Pioneer Purchase Accounting |
(50) |
(55) |
(.06) |
|||
Sale of Interest in Quimica Fluor Affiliate |
23 |
16 |
.02 |
|||
Chambers Works Restructuring |
(28) |
(17) |
(.02) |
|||
Sale of Stock - DuPont Photomasks, Inc. |
123 |
81 |
.08 |
|||
Total - Third Quarter |
(56) |
68 |
14 |
25 |
.01 |
.02 |
One-time items include the reserve for a one-time payment made in October 2001 to resolve all issues related to Monsanto YieldGardÒ (MON810 Bt) insect resistant corn trait used in Pioneer's corn hybrids.
Ò |
Registered trademark of Monsanto. |
3
Segment Sales
Regional segment sales and related variances for the third quarter 2001 compared with the third quarter 2000 are summarized below:
Segment Sales |
% Change Due To |
|||||
|
3Q'01 $B |
% Change vs. 3Q'00 |
Local Price |
Currency Effect |
Volume |
Other* |
Worldwide |
6.4 |
(14) |
(2) |
(2) |
(9) |
(1) |
U.S. |
3.1 |
(16) |
(1) |
0 |
(12) |
(3) |
Europe |
1.6 |
(8) |
1 |
(4) |
(5) |
0 |
Asia Pacific |
1.0 |
(14) |
(3) |
(5) |
(6) |
0 |
Canada, Mexico, South America |
0.7 |
(13) |
(5) |
(1) |
(7) |
0 |
* |
Includes impact of reduced ownership of DuPont Photomasks, Inc. and sale of certain Polyester businesses. |
Business Segment Performance
The following compares third quarter 2001 results before one-time items for each segment with those for the third quarter 2000.
4
($ in millions) |
3Q 2001 |
2Q 2001 |
3Q 2000 |
CoumadinÒ |
60 |
52 |
80 |
SustivaÔ |
142 |
87 |
99 |
CardioliteÒ /MiralumaÔ |
62 |
53 |
77 |
Outlook
The company currently expects that the U.S. economy will continue to weaken through the fourth quarter of 2001. The company's macroeconomic outlook for other regional economies, currency, and raw material prices remains consistent with the outlook provided in its second quarter earnings release.
5
The fourth quarter earnings per share outlook for DuPont includes both positives and negatives, as compared to the third quarter:
Positives:
Negatives:
Of these factors, volume and price represent the greatest uncertainty as well as the greatest potential impact on earnings. Consumer and business confidence following the events of September 11 will be critical. Taking all of these issues into account, and acknowledging these uncertainties, the company's current view is that fourth quarter earnings per share will be roughly similar to those in the third quarter.
"Following the tragic events of September 11, our people worldwide have responded with true professionalism in the concern they have shown for the safety and security of our operations and in the attention they have given to our customers and other supply chain partners. The aftermath of September 11 has added to economic uncertainty and will likely prolong the current economic downturn," Holliday said. "I am confident that DuPont has the financial strength, the business focus and operational discipline to meet these new challenges head-on, no matter how long they persist."
Forward-Looking Statements: This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on
6
Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales of agricultural products.
# # #
10/24/01
NOTE: |
An update to the third quarter Investor Relations' quarterly note has been posted to: |
http://www.corporate-ir.net/ireye/ir site.zhtml?ticker=DD&script=11948&item id='earnings landing.htm'. |
7
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
Three Months Ended |
Nine Months Ended |
|||||||
CONSOLIDATED INCOME STATEMENT |
September 30 |
September 30 |
||||||
(Dollars in millions, except per share) |
2001 |
2000 |
2001 |
2000 |
||||
SALES |
$5,641 |
$6,445 |
$19,497 |
$21,952 |
||||
Other Income(a) |
135 |
420 |
521 |
986 |
||||
Total |
5,776 |
6,865 |
20,018 |
22,938 |
||||
|
||||||||
Cost of Goods Sold and Other Expenses(b) |
3,958 |
4,135 |
13,059 |
14,019 |
||||
Selling, General and Administrative Expenses |
687 |
710 |
2,269 |
2,276 |
||||
Depreciation |
328 |
351 |
995 |
1,055 |
||||
Amortization of Goodwill and Other Intangible Assets |
113 |
113 |
338 |
329 |
||||
Research and Development Expense |
441 |
442 |
1,288 |
1,323 |
||||
Interest and Debt Expense |
148 |
205 |
492 |
616 |
||||
Purchased In-Process Research and Development(c) |
- |
- |
- |
(11) |
||||
Employee Separation Costs and Write-Down of Assets(d) |
- |
28 |
1,046 |
126 |
||||
Gain on Issuance of Stock by Affiliates - Nonoperating(e) |
- |
(29) |
- |
(29) |
||||
Total |
5,675 |
5,955 |
19,487 |
19,704 |
||||
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS |
101 |
910 |
531 |
3,234 |
||||
Provision for (Benefit from) Income Taxes(f) |
(46) |
339 |
87 |
1,133 |
||||
Minority Interests in Earnings of Consolidated Subsidiaries |
5 |
9 |
31 |
48 |
||||
INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE |
142 |
562 |
413 |
2,053 |
||||
Cumulative Effect of a Change in Accounting Principle, Net of Income Taxes(g) |
- |
- |
11 |
- |
||||
NET INCOME |
$ 142 |
$ 562 |
$ 424 |
$ 2,053 |
||||
|
||||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK(h)(i) |
||||||||
Income before Cumulative Effect of a Change in Accounting Principle |
$ .13 |
$ .54 |
$ .39 |
$ 1.96 |
||||
Cumulative Effect of a Change in Accounting Principle |
- |
- |
.01 |
- |
||||
Net Income |
$ .13 |
$ .54 |
$ .40 |
$ 1.96 |
||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK(h)(i) |
||||||||
Income before Cumulative Effect of a Change in Accounting Principle |
$ .13 |
$ .53 |
$ .39 |
$ 1.94 |
||||
Cumulative Effect of a Change in Accounting Principle |
- |
- |
.01 |
- |
||||
Net Income |
$ .13 |
$ .53 |
$ .40 |
$ 1.94 |
||||
DIVIDENDS PER SHARE OF COMMON STOCK |
$ .35 |
$ .35 |
$ 1.05 |
$ 1.05 |
8
FOOTNOTES TO CONSOLIDATED INCOME STATEMENT
Third quarter 2000 includes gains of $117 resulting from the sale of stock that reduced the Company's ownership interest in DuPont Photomasks and the sale of the Company's interest in a Mexican affiliate. Year-to-date 2000 also includes a $176 gain resulting from the sale of certain equity securities classified as available for sale.
Third quarter and year-to-date 2000 charges related to the sale of acquired Pioneer inventory were $21 and $588, respectively. Third quarter 2000 also includes a charge of $29 for accrued post-employment costs for Pioneer employees. In addition, year-to-date 2000 also includes a charge of $100 to increase the Company's reserve for "Benlate" 50 DF fungicide litigation.
Third quarter 2000 charges of $28 result from restructuring manufacturing operations at the Chambers Works site. Year-to-date 2000 also includes charges of $98 resulting from the continued restructuring of the performance coatings business.
and Hedging Activities," as amended.
Three Months Ended |
Nine Months Ended |
|||||||
September 30 |
September 30 |
|||||||
Basic |
Diluted |
Basic |
Diluted |
|||||
2001 |
1,039,345,016 |
1,044,530,790 |
1,041,080,675 |
1,046,752,988 |
||||
2000 |
1,041,269,308 |
1,047,777,845 |
1,044,708,476 |
1,052,825,218 |
(i) Year-to-date earnings per share do not equal the sum of quarterly earnings per share due to changes in average share calculations.
(j) On October 1, 2001, the Company sold DuPont Pharmaceuticals to Bristol-Myers Squibb for approximately $7,800 in cash. As part of the transaction, the Company retained its interest in Cozaar®/Hyzaar®. The Company estimates this transaction will result in an after-tax gain of about $4,000 in its fourth quarter results.
9
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
Three Months Ended |
Nine Months Ended |
||||||
CONSOLIDATED SEGMENT INFORMATION(a) |
September 30 |
September 30 |
|||||
(Dollars in millions) |
2001 |
2000 |
2001 |
2000 |
|||
SEGMENT SALES (b) |
|||||||
Agriculture & Nutrition |
$ 546 |
$ 586 |
$ 3,601 |
$ 3,785 |
|||
Nylon |
675 |
807 |
2,057 |
2,360 |
|||
Performance Coatings & Polymers |
1,381 |
1,572 |
4,353 |
4,941 |
|||
Pharmaceuticals |
393 |
389 |
902 |
1,172 |
|||
Pigments & Chemicals |
866 |
974 |
2,769 |
2,972 |
|||
Polyester |
429 |
594 |
1,475 |
1,723 |
|||
Specialty Fibers |
1,060 |
1,213 |
3,387 |
3,813 |
|||
Specialty Polymers |
937 |
1 ,124 |
2,985 |
3,366 |
|||
Other |
67 |
105 |
229 |
371 |
|||
Total Segment Sales |
6,354 |
7,364 |
21,758 |
24,503 |
|||
Elimination of Intersegment Transfers |
(111) |
(165) |
(384) |
(501) |
|||
Elimination of Equity Affiliate Sales |
(602) |
(757) |
(1,884) |
(2,055) |
|||
Miscellaneous |
- |
3 |
7 |
5 |
|||
CONSOLIDATED SALES |
$5,641 |
$6,445 |
$19,497 |
$21,952 |
|||
|
|||||||
AFTER-TAX OPERATING INCOME (LOSS) (c) |
|||||||
Agriculture & Nutrition |
$(153)(d) |
$ (140)(e) |
$ 139(f) |
$ 76(g) |
|||
Nylon |
25 |
58 |
(99) |
199 |
|||
Performance Coatings & Polymers |
75 |
170 |
224 |
478(h) |
|||
Pharmaceuticals |
133(i) |
41 |
79(i) |
146 |
|||
Pigments & Chemicals |
112 |
168(j) |
329 |
518(j) |
|||
Polyester |
(20) |
20 |
(309) |
32 |
|||
Specialty Fibers |
65 |
182 |
290 |
600 |
|||
Specialty Polymers |
90 |
175 |
273 |
523 |
|||
Other |
(29) |
57(k) |
(33)(l) |
63(k) |
|||
Total Segment ATOI |
298 |
731 |
893 |
2,635 |
|||
Interest & Exchange Gains and Losses |
(72) |
(122) |
(257) |
(381) |
|||
Corporate Expenses |
(76) |
(47)(m) |
(215) |
(201)(m) |
|||
Corporate Minority Interest(n) |
(8) |
- |
(8) |
- |
|||
INCOME FROM OPERATIONS |
$142 |
$ 562 |
$ 413 |
$ 2,053 |
10
FOOTNOTES TO CONSOLIDATED SEGMENT INFORMATION
(a) Certain reclassifications of segment data have been made to reflect second quarter changes in organizational structure. The Agriculture & Nutrition segment now includes the Pioneer business. The Specialty Fibers segment now includes the new Apparel & Textile Sciences SBU, which comprises the former Lycra® business, nylon apparel and specialty textile businesses, and the polyester branded specialties businesses.
(d) Includes a charge of $35 to establish a reserve related to settlement of YieldGard® (MON 810 Bt) insect resistant corn litigation with Monsanto.
(e) Includes a charge of $42 for accrued post-employment benefits for Pioneer employees and tax adjustments related to finalization of purchase accounting, as well as a charge of $13 resulting from the sale of acquired Pioneer inventories which, in accordance with purchase accounting rules, were recorded at fair market value on October 1, 1999.
11
E. I. DUPONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
SEGMENT SALES(a)
(3rd QUARTER 2001 VS. 3rd QUARTER 2000)
Segment Sales |
|||||||||
Three Months Ended |
Percentage Change Due to: |
||||||||
September 30 |
U.S.$ |
||||||||
$ |
% Change |
Price |
Volume |
Other(b) |
|||||
Agriculture & Nutrition |
$ 546 |
(7)% |
(4) |
(3) |
|||||
Nylon |
675 |
(16) |
(3) |
(13) |
|||||
Performance Coatings & Polymers |
1,381 |
(12) |
(3) |
(9) |
|||||
Pharmaceuticals |
393 |
1 |
- |
1 |
|||||
Pigments & Chemicals |
866 |
(11) |
(4) |
(7) |
|||||
Polyester |
429 |
(28) |
(7) |
(12) |
(9) |
||||
Specialty Fibers |
1,060 |
(13) |
(4) |
(9) |
|||||
Specialty Polymers |
937 |
(17) |
(3) |
(14) |
|||||
Other |
67 |
(36) |
- |
- |
(36) |
||||
Total |
$6,354 |
|
(14) |
(4) |
(9) |
(1) |
___________________________
(b) Reflects sales decrease due to divestitures.
SEGMENT INFORMATION |
Three Months Ended |
Nine Months Ended |
||||||||||
EXCLUDING IMPACT OF ONE-TIME ITEMS - |
September 30 |
September 30 |
||||||||||
(Dollars in millions) |
2001 |
2000 |
% Chg. |
2001 |
2000 |
% Chg. |
||||||
AFTER-TAX OPERATING INCOME (LOSS) |
||||||||||||
Agriculture & Nutrition |
$(118) |
$ (85) |
|
N/M |
$ 337 |
$ 426 |
(21)% |
|||||
Nylon |
25 |
58 |
(57)% |
44 |
199 |
(78) |
||||||
Performance Coatings & Polymers |
75 |
170 |
(56) |
284 |
539 |
(47) |
||||||
Pharmaceuticals |
84 |
41 |
105 |
30 |
146 |
(79) |
||||||
Pigments & Chemicals |
112 |
169 |
(34) |
359 |
519 |
(31) |
||||||
Polyester |
(20) |
20 |
N/M |
(45) |
32 |
N/M |
||||||
Specialty Fibers |
65 |
182 |
(64) |
320 |
600 |
|
(47) |
|||||
Specialty Polymers |
90 |
175 |
(49) |
305 |
523 |
(42) |
||||||
Other |
(29) |
(5) |
N/M |
(27) |
1 |
|
N/M |
|||||
Total Segment ATOI |
284 |
725 |
(61) |
1,607 |
2,985 |
(46) |
||||||
Interest & Exchange Gains and Losses |
(72) |
(122) |
(257) |
(381) |
||||||||
Corporate Expenses |
(76) |
(66) |
(215) |
(220) |
||||||||
Corporate Minority Interest |
(8) |
- |
(8) |
- |
||||||||
INCOME FROM OPERATIONS |
$ 128 |
$ 537 |
(76)% |
$1,127 |
$2,384 |
(53)% |
12
E. I. DUPONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Dollars in millions, except per share)
Three Months Ended |
Nine Months Ended |
||||||||||
September 30 |
September 30 |
||||||||||
2001 |
2000 |
% Chg. |
2001 |
2000 |
% Chg. |
||||||
Selected Income Statement Data - |
|||||||||||
Excluding Impact of One-Time Items |
|||||||||||
and Cumulative Effect of a Change |
|||||||||||
in Accounting Principle |
|||||||||||
Consolidated Sales |
$5,641 |
$6,445 |
(12)% |
$19,497 |
$21,952 |
|
(11)% |
||||
Segment Sales |
6,354 |
7,364 |
(14) |
21,758 |
24,503 |
(11) |
|||||
Segment ATOI |
284 |
725 |
(61) |
1,607 |
2,985 |
(46) |
|||||
EBIT |
319 |
1,062 |
(70) |
2,251 |
4,407 |
(49) |
|||||
EBITDA |
760 |
1,526 |
(50) |
3,584 |
5,791 |
(38) |
|||||
Income from Operations |
128 |
537 |
(76) |
1,127 |
2,384 |
(53) |
|||||
EPS - Diluted |
0.12 |
0.51 |
(76) |
1.07 |
2.26 |
(53) |
|||||
|
Nine Months Ended |
|||||
3rd Quarter 2001 Vs. |
September 30, 2001 Vs. |
|||||
3rd Quarter 2000 |
September 30, 2000 |
|||||
|
||||||
Segment ATOI Variance Analysis - |
||||||
Excluding Impact of One-Time Items |
||||||
Local Prices |
$ (80) |
$ 30 |
||||
Volume |
(160) |
(640) |
||||
Costs |
(125) |
(615) |
||||
Currency |
(30) |
(115) |
||||
Other |
(46) |
(38) |
||||
Total |
$(441) |
$(1,378) |
Six Sigma Estimated Annualized Benefits - $ Pretax |
|
From Ongoing Projects |
$ 600 |
From Completed Projects |
$ 800 |
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
E. I. DU PONT DE NEMOURS AND COMPANY |
(Registrant) |
/s/ D. B. Smith |
D. B. Smith |
Assistant Controller |
October 24, 2001
14