3: E





SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of Earliest Event Reported) April 29, 2003


E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)

Delaware

1-815

51-0014090

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

Of Incorporation)

File Number)

Identification No.)


1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)


Registrant's telephone number, including area code: (302) 774-1000









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Item 9. Regulation FD Disclosure

          The Registrant furnishes, pursuant to Regulation FD, its earnings news release dated April 29, 2003, entitled "DuPont Reports First Quarter 2003 Earnings," a copy of which is below.

April 29, 2003

Contact:

Anthony Farina

WILMINGTON, Del.

  

302-774-4114
   

anthony.r.farina@usa.dupont.com


DUPONT REPORTS FIRST QUARTER
2003 EARNINGS


Summary
  • Consolidated net sales for the first quarter were $7 billion, up 14 percent, driven by a 7 percent volume increase and a 6 percent benefit from the currency effect of a weaker U.S. dollar.

Earnings Comparisons*
($ per share diluted)

 

1Q'03

1Q'02

Reported

.56

.48

Special Items

(.05)

(.07)

Before Special Items

.61

.55

*

Excludes cumulative effect of changes in accounting principles of $(.03) in 2003 and $(2.94) in 2002.


          "Our sales growth in the first quarter reflects strong volume increases in each of our five growth platforms and DuPont Textiles & Interiors (DTI). This broad-based volume growth, combined with particularly strong results in Pharmaceuticals, Agriculture & Nutrition and Safety & Protection, offset the impact of higher pension, energy, and raw material costs in the first quarter," said Charles O. Holliday, Jr., chairman and CEO. "Our businesses performed well, maintaining their momentum even better than expected through the end of the quarter."

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Global Consolidated Net Sales and Net Income

          Consolidated net sales totaled $7 billion compared to $6.1 billion in first quarter 2002, up 14 percent. This includes 7 percent higher sales volume, a 2 percent benefit attributable to the net impact of acquired and divested businesses, and a 6 percent benefit from the weaker dollar, partly offset by 1 percent lower local selling prices.
          First quarter net income was $535 million, compared to a loss of $2,465 million in the first quarter of 2002. Income before cumulative effect of changes in accounting principles was $564 million in the current quarter versus $479 million in the first quarter 2002, up 18 percent. The increase in income principally reflects higher sales volumes, the benefit of a weaker U.S. dollar and lower income taxes, partly offset by increases in raw material costs and pension expense.
          Special items, which are described in the notes accompanying the financial statements, totaled a after-tax charge of $51 million, or $.05 per share, in the first quarter 2003 versus a net after-tax charge of $73 million, or $.07 per share, last year, as shown in the table below:

SPECIAL ITEMS
 

$MM Pretax

$MM After-Tax

($ Per Share)
 

2003

2002

2003

2002

2003

2002

BenlateÒ Shareholder Litigation Settlement

(78)

(51)

(.05)

1st Quarter Total

(78)

(72)

(51)

(73)

(.05)

(.07)

First Quarter Segment Sales
          Worldwide and regional segment sales and related variances for the first quarter 2003 compared with the first quarter 2002 are summarized below. Segment sales include transfers and a pro rata share of equity affiliate sales.

 

Segment Sales

% Change Due To


1Q'03
$B

% Change
vs. 1Q'02

Local
Price

Currency
Effect


Volume


Other*

Worldwide

7.8

15

(1)

6

7

3

United States

3.6

8

0

0

3

5

Europe

2.3

24

(4)

20

8

0

Asia Pacific

1.2

25

(1)

4

22

0

Canada, Mexico,

South America


0.7


10


4


1


3


2

*

Net impact of acquisitions and divestitures and a change in management reporting for certain intersegment transfers.



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Business Segment Performance
          Summarized below are comments on individual segment sales and after-tax operating income (ATOI) for the first quarter 2003 compared with the first quarter 2002. All segments had a benefit to sales ranging from 5-8 percent resulting from the currency effect of the weaker dollar. Additional segment information is available to investors and the public via the earnings data section of the DuPont Investor Web site.

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  • Pharmaceuticals - ATOI of $95 million was up 86 percent over prior year ATOI of $51 million. A substantial portion of the increase is attributable to earnings related to a wholesaler buy-in in anticipation of a price increase for CozaarÒ /HyzaarÒ .. CozaarÒ /HyzaarÒ continue to show solid growth globally, driven in part by new indications.
  • Safety & Protection - Sales of $1 billion were up 19 percent due to higher volumes, the acquisition of ChemFirst, and higher U.S. dollar selling prices. ATOI increased 24 percent to $128 million despite higher non-cash pension expense, reflecting higher earnings from nonwoven and aramid products.
  • Textiles & Interiors (DTI) - Sales of $1.7 billion reflect 5 percent higher volume and 6 percent higher U.S. dollar selling prices. In addition, in preparation for the planned separation of DTI, the company changed its management reporting regarding intermediates supplied to Performance Materials to reflect market-based transfers. This change increased first quarter 2003 segment sales by 8 percent versus prior year. ATOI was a loss of $5 million. First quarter 2002 ATOI of $20 million included a net charge of $10 million for special items. The earnings decline principally reflects lower margins due to higher raw material and non-cash pension costs.

Outlook
          Although the company currently expects the global economic recovery to resume its moderate pace later in 2003, the near-term economic outlook is somewhat restrained -- particularly for industrial production in developed economies. In addition, for the second quarter 2003 versus the prior year:

  • The company expects significantly higher energy related raw material costs. The year over year negative impact in the second quarter is expected to be at least double what it was in the first quarter of 2003.
  • As previously announced, the company will incur higher non-cash expense in 2003, mainly related to pension. This will negatively affect earnings per share versus the prior year by approximately 10 cents per quarter throughout 2003.

          Despite these challenges, the company expects its businesses to continue to perform well in the market place, driving both volume growth and price increases. Taking all of these factors into account, the company expects to deliver earnings per share for the first half of 2003 that are in line with the current First Call earnings estimate consensus of $1.16 (which excludes the impact of DuPont's first quarter special item and cumulative effect of a change in accounting principle), yielding a second quarter earnings outlook in the mid- to high 50 cents per share range. This outlook does not reflect any special items in the second quarter.

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          "Our leadership fully understands the near term challenges -- slower economic growth and higher costs," said Holliday. "Our businesses are focused on what they can control, keeping a tight rein on cash costs and driving sales and volume growth by staying close to the customer. I am confident that we will continue to outperform our competition."
          DuPont is a science company. Founded in 1802, DuPont puts science to work by solving problems and creating solutions that make people's lives better, safer and easier. Operating in more than 70 countries, the company offers a wide range of products and services to markets including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation and apparel.

Use of Non-GAAP Measures

          Management believes that earnings before special items, a "non-GAAP" measure, is meaningful to investors because it provides insight with respect to ongoing operating results of the company. Special items represent significant charges or credits that are important to an understanding of the company's ongoing operations. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance.

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










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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.



# # #


4/29/03

DuPontÔ , BenlateÒ , ClysarÒ , CozaarÒ and HyzaarÒ are a trademark and registered trademarks of E. I. du Pont de Nemours and Company.




































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

Three Months Ended

CONSOLIDATED INCOME STATEMENT

March 31

(Dollars in millions, except per share)

2003

  

2002

  
         

NET SALES

$7,008

  

$ 6,142

 

Other Income(a)

178

 

57

  
         

Total

7,186

  

6,199

  
 

     

Cost of Goods Sold and Other Operating Charges(b)

4,855

  

3,984

  

Selling, General and Administrative Expenses

730

  

645

  

Depreciation

329

  

305

  

Amortization of Intangible Assets

56

  

51

  

Research and Development Expense

315

  

287

  

Interest Expense

81

  

90

  

Employee Separation Costs and Write-Down of Assets(c)

-

  

9

  
         

Total

6,366

  

5,371

  
         

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS


820

  


828

  

Provision for Income Taxes

231

328

Minority Interests in Earnings of Consolidated Subsidiaries

25

  

21

  
         

INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES


564

  


479

  

Cumulative Effect of Changes in Accounting Principles,
Net of Income Taxes(d)


(29)



(2,944)

  
         

NET INCOME (LOSS)

$ 535

  

$(2,465)

  
         

BASIC EARNINGS (LOSS) PER SHARE OF
COMMON STOCK(e)

        

Income before Cumulative Effect of Changes in
Accounting Principles


$ .56

  


$ .48

  

Cumulative Effect of Changes in Accounting Principles

(.03)

  

(2.96)

         

Net Income (Loss)

$ .53

  

$ (2.48)

  
         

DILUTED EARNINGS (LOSS) PER SHARE OF
COMMON STOCK(e)

        

Income before Cumulative Effect of Changes in
Accounting Principles


$ .56

  


$ .48

  

Cumulative Effect of Changes in Accounting Principles

(.03)

  

(2.94)

  
         

Net Income (Loss)

$ .53

  

$ (2.46)

  
         

DIVIDENDS PER SHARE OF COMMON STOCK

$ .35

  

$ .35

  





8

 

 




FOOTNOTES TO CONSOLIDATED INCOME STATEMENT

(a)

First quarter 2002 includes an exchange loss of $63 resulting from the mandatory conversion of the Company's U.S. dollar-denominated trade receivables to Argentine pesos and moving from a preferential to a free-market exchange rate.
   

(b)

First quarter 2003 includes a charge of $78 to provide for settlement of the 1995 BenlateÒ shareholder litigation case.
   

(c)

First quarter 2002 includes a charge of $39 to withdraw from a polyester joint venture in China. This charge is partly offset by a $30 gain resulting principally from a favorable litigation settlement associated with exiting a nylon joint venture in China.
   

(d)

On January 1, 2003, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires companies to record an asset and related liability for the costs associated with the retirement of a long-lived tangible asset if a legal liability to retire the asset exists. The Company recorded a cumulative effect adjustment to income of $29.
   
 

The Company's adoption of SFAS No. 142, "Goodwill and Other Intangible Assets," resulted in a cumulative effect adjustment to income of $2,944 effective January 1, 2002.
   

(e)

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

 

Three Months Ended
 

March 31

 

Basic

Diluted

   

2003

995,752,067

998,192,276

2002

995,776,462

1,001,260,784

 

9

 




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

Three Months Ended

CONSOLIDATED SEGMENT INFORMATION(a)

March 31

(Dollars in millions)

2003

  

2002
       

SEGMENT SALES(b)

      

Agriculture & Nutrition

$1,790

  

$ 1,606

Coatings & Color Technologies

1,269

  

1,137

Electronic & Communication Technologies

677

  

578

Performance Materials

1,336

  

1,163

Safety & Protection

985

  

827

Textiles & Interiors

1,717

  

1,439

Other

3

  

8
       

Total Segment Sales

7,777

  

6,758
     

Elimination of Transfers

(219)

  

(95)

Elimination of Equity Affiliate Sales

(550)

  

(523)

Miscellaneous

-

  

2
       

CONSOLIDATED NET SALES

$7,008

  

$ 6,142

       
     

AFTER-TAX OPERATING INCOME (LOSS)

      

Agriculture & Nutrition

$ 378

  

$ 323

Coatings & Color Technologies

74

  

85

Electronic & Communication Technologies

21

  

45

Performance Materials

75

  

84

Pharmaceuticals

95

  

51

Safety & Protection

128

  

103

Textiles & Interiors(c)

(5)

  

20

Other(d)

(69)

  

(20)
       

Total Segment ATOI

697

  

691
       

Interest & Exchange Gains and Losses(e)

(43)

  

(122)

Corporate Expenses

(83)

  

(78)

Corporate Minority Interest(f)

(7)

  

(12)
       

Income Before Cumulative Effect of Changes
in Accounting Principles


564


479

Cumulative Effect of Changes in Accounting Principles(g)

(29)

(2,944)

NET INCOME (LOSS)

$ 535

$(2,465)

 








10

 





FOOTNOTES TO CONSOLIDATED SEGMENT INFORMATION

(a)

Certain reclassifications of segment data have been made to reflect 2003 changes in organizational structure.
   

(b)

Includes transfers and pro rata share of equity affiliate sales. Beginning in 2003, Textiles & Interiors segment sales include transfers of intermediates to Performance Materials.
   

(c)

First quarter 2002 includes a charge of $29 to withdraw from a polyester joint venture in China, partly offset by a $19 gain resulting principally from a favorable litigation settlement associated with exiting a nylon joint venture in China.
   

(d)

First quarter 2003 includes a charge of $51 to provide for settlement of the 1995 BenlateÒ shareholder litigation case.
   

(e)

First quarter 2002 includes an exchange loss of $63 resulting from the mandatory conversion of the Company's U.S. dollar-denominated trade receivables to Argentine pesos and moving from a preferential to a free-market exchange rate.
   

(f)

Represents a rate of return to minority interest investors who made capital contributions to consolidated subsidiaries.
   

(g)

On January 1, 2003, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires companies to record an asset and related liability for the costs associated with the retirement of a long-lived tangible asset if a legal liability to retire the asset exists. The Company recorded a cumulative effect adjustment to income of $29.
   
 

The Company's adoption of SFAS No. 142, "Goodwill and Other Intangible Assets," resulted in a cumulative effect adjustment to income of $2,944 effective January 1, 2002.





























11

 



E. I. DUPONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

SEGMENT SALES(a)
(1st QUARTER 2003 VS. 1st QUARTER 2002)
 

Segment Sales

  
 

Three Months Ended

Percentage Change Due to:
 

March 31

U.S.$
 

$

  

% Change

  

Price

  

Volume

  

Other(b)
                   

Agriculture & Nutrition

$1,790

  

11%

  

5%

  

4%

  

2%

Coatings & Color Technologies

1,269

  

12

  

7

  

5

  

-

Electronic & Communication Technologies

677

  

17

  

-

  

13

  

4

Performance Materials

1,336

  

15

  

4

  

12

  

(1)

Safety & Protection

985

  

19

  

5

  

7

  

7

Textiles & Interiors

1,717

  

19

  

6

  

5

  

8

Other

3

  

(63)

  

-

  

(63)

  

-
                   

Total

$7,777

15%

5%

7%

3%

(a)

Includes transfers and pro rata share of equity affiliate sales.

(b)

Includes impacts from the sale of ClysarÒ , and acquisitions of Liqui-Box and ChemFirst. In preparation for the planned separation, Textiles & Interiors segment sales includes market-based transfers of intermediates to Performance Materials beginning in 2003.

 

SEGMENT INFORMATION

Three Months Ended

EXCLUDING IMPACT OF SPECIAL ITEMS -

March 31

(Dollars in millions)

2003

  

2002

  

% Chg.

AFTER-TAX OPERATING INCOME

          

Agriculture & Nutrition

$378

  

$ 323

17 %

Coatings & Color Technologies

74

  

85

(13)

Electronic & Communication Technologies

21

  

45

  

(53)

Performance Materials

75

  

84

  

(11)

Pharmaceuticals

95

  

51

  

86

Safety & Protection

128

  

103

  

24

Textiles & Interiors

(5)

  

30

  

N/M

Other

(18)

  

(20)

  

N/M

Total Segment ATOI

748

  

701

  

7%

Interest & Exchange Gains and Losses

(43)

  

(59)

    

Corporate Expenses

(83)

  

(78)

    

Corporate Minority Interest

(7)

  

(12)

    

INCOME BEFORE SPECIAL ITEMS
AND CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING
PRINCIPLES




615

  




552

  




11 %

Special Items

(51)

  

(73)

    

INCOME BEFORE CUMULATIVE
EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES



564

  



479

    

Cumulative Effect of Changes in
Accounting Principles


(29)

  


(2,944)

  


NET INCOME (LOSS)

$535

  

$(2,465)

    

12

 




E. I. DUPONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES

FINANCIAL SUMMARY
(Dollars in millions, except per share)

 

1st Quarter 2003 Vs.
 

1st Quarter 2002    

Variance Analysis: Income Before Cumulative
Effect of Changes in Accounting Principles

 

Local Prices

$ (40)

Volume

105

Costs

(180)

Currency

75

Other Income (mostly Pharmaceuticals)

55

Other

48

 

Total Before Special Items

63
   

Special Items

22

 

Total

$ 85


 

Three Months Ended
 

March 31
 

2003

  

2002

  

% Chg.

Selected Income Statement Data -

          

Excluding Impact of Special Items

          

And Cumulative Effect of Changes

          

In Accounting Principles

         

         

Consolidated Net Sales

$7,008

$6,142

14%

Segment Sales

7,777

  

6,758

  

15

Segment ATOI*

748

  

701

  

7

EBIT*

947

  

966

  

(2)

EBITDA*

1,317

  

1,307

  

1

Income

615

  

552

  

11

EPS - Diluted

0.61

  

0.55

  

11

*

See Reconciliation of Non-GAAP Measures.













13

 

 



RECONCILIATION OF NON-GAAP MEASURES
(Dollars in millions)

Reconciliation of Segment ATOI
 

Three Months Ended
 

March 31

2003

2002
     

Segment ATOI Excluding Special Items

$748

$701

Special Items included in Segment ATOI

(51)

(10)

   

Segment ATOI

$697

$691

 

Reconciliation of EBIT / EBITDA to Consolidated Income Statement
 

Three Months Ended
 

March 31
 

2003

2002

   

Income Before Income Taxes and Minority Interests

$ 820

$ 828
     

Less:

    

Minority Interest in Earnings of Consolidated Subsidiaries(1)


(22)


(16)

Add:

    

Net Interest Expense(2)

71

82

Special Items

78

72

   

EBIT

947

966
     

Add:

    

Depreciation and Amortization(3)

370

341

   

EBITDA

$1,317

$1,307

(1)

Excludes income taxes and corporate minority interests.

(2)

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

(3)

Excludes amortization of capitalized interest.













14

 






SIGNATURE



          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

E. I. DU PONT DE NEMOURS AND COMPANY

(Registrant)
 
 

/s/ D. B. Smith

D. B. Smith

Vice President and Controller


April 29, 2003




























15