DuPont

An investment analysis

DuPont makes a variety of high-value products for industry today, including

polymers,

chemicals, fibers, and petroleum products...products for agriculture,

electronics,

transportation, apparel, food, aerospace, construction, and health care.

DuPont serves

customers in these and other industries every day, offering "better things

for better living"

as the company prepares to begin its third century of scientific,

technological,

commercial, and social achievement. DuPont is a research and technology

based

chemical and energy company with its annual revenue exceeding $39 billion.
Eleuth?re Ir?n?e du Pont de Nemours, a French immigrant, established DuPont

in

1802 in a small Delaware town. E.I. du Pont was a student of Antoine

Lavoisier, the

father of modern chemistry, and when he came to America he brought some of

the new

ideas about the manufacturing of consistently reliable gun powder. His

product ignited

when it was supposed to, in a manner consistent with expectations. This was

greatly

appreciated by the citizens of the growing nation, including Thomas

Jefferson, who wrote

thanking du Pont for the quality of his powder, which was being used to clear

the land at

Monticello. Many other heroes of early America owed their success, and their

lives, to
the dependable quality of DuPont's first product. This represents a good,

strong start for

a company.

DuPont, which is moving through the last decade of the twentieth century and

toward its third century, emphasizes several things; competing globally;

sharpening its

business focus; increasing productivity; committing to safety, health, and

environmental

excellence; and continuing to extend its significant science and

technological

achievement.

One of DuPont's major strategies is to focus on businesses in which DuPont

has

core competencies, where DuPont can build competitive advantage. The most

notable
example of this focus was the 1993 transaction in which DuPont acquired ICI's

nylon

business and ICI acquired DuPont's acrylics business. This strengthened the

company's

position in the global nylon business while divesting a business that no

longer fit its

portfolio.

Another major factor in the transformation of the company in the1990s was

the

focus on reducing costs and improving productivity. This was necessary to

give the

company the flexibility for competitive pricing and to grow market share and

earnings.

DuPont had strong plants in several countries around the world for many

years,
and their globalization trend continued in the 1990s. New plants opened in

Spain,

Singapore, Korea, Taiwan, and China, and a major technical service center

opened in

Japan. In 1994, a Conoco joint venture began producing oil from the Ardalin

Field in the

Russian Arctic--the first major oil field brought into production by a

Russian/Western

partnership since demise of the Soviet Union.

A further major development was the redemption of 156 million DuPont shares

from Seagram for $8.8 billion in cash and warrants --- one of the largest

stock

redemptions in history. This large block of shares was redeemed at a 13

percent discount

to market price. While DuPont later sold some new shares, there are 18

percent fewer
shares currently outstanding than just prior to the redemption. This resulted

in a

significant opportunity for wealth creation for our stockholders. The share

redemption

was made possible by four years of cost reduction, productivity improvement

and

organizational change that have made DuPont strong financially and allowed

them to

move decisively and quickly.

The DuPont that emerged from the company's transformation in the 1990s has

often been described by people inside and outside the company as "the new

DuPont."

This characterization is only partly appropriate, because while DuPont has

changed, there

are many things that remain the same. The core competency in science and
technology,

the commitment to safety, the concern for people, the feeling of community,

the

emphasis on personal and corporate integrity, the future focus, and indeed

the willingness

to change. DuPont is a company not only out for their own interest, but also

for the best

interest of the world.

What has always set DuPont apart is the quality of the people, people

committed

to making life easier and better for everybody, proud to be a part of an

enterprise making

"better things for better living." That was true in 1802. And it is just as

true today.

In the second quarter of 1995 DuPont reported earnings per share of $1.70,
up 47

percent from the $1.16 earned in the second quarter 1994. Net income

totaled $938

million, compared to $792 million earned in 1994. Both earnings per share

and net

income increased 27 percent."These outstanding results continue to reflect

strong

revenue gains and ongoing productivity improvements," said DuPont Chairman

Edgar

S.Woolard Jr. Sales for the second quarter were $11.1 billion, up 9 percent

from prior

year.

The third quarter of the 1995 business year led DuPont to a $1.38 per share

earning. This number exceeded the $.95 earned in the third quarter of 1994

by more than

45%. Net income totaled $769 million compared to $647 million earned in
1994. Sales

for the third quarter were