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