8-KOther Events

EIDP, Inc. 8-K Report, Corporate Update (Jan 19, 2005)

Filed January 19, 2005For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) is reporting on the resolution of two significant litigation matters involving its 50/50 joint venture, DuPont Dow Elastomers LLC (DDE). DDE has reached a plea agreement with the U.S. Department of Justice, resulting in an $84 million fine to resolve criminal charges related to the polychloroprene industry. Additionally, DDE has settled a federal class action antitrust lawsuit concerning ethylene propylene diene monomer (EPDM) purchases. As per prior agreements between DuPont and Dow Chemical Company announced in April 2004, DuPont will primarily bear the financial impact of these resolutions. DuPont previously set aside $150 million for DDE antitrust liabilities and costs and will now increase its consolidated litigation reserve by an additional $118 million pre-tax. This will result in a special charge of approximately $100 million pre-tax, or $0.09 per share, impacting DuPont's fourth quarter 2004 results after accounting for Dow's contributions.

Key Highlights

  • 1DuPont Dow Elastomers LLC (DDE), a joint venture of DuPont and Dow, resolved criminal charges with an $84 million fine from the DOJ.
  • 2DDE settled a federal class action antitrust lawsuit regarding ethylene propylene diene monomer (EPDM) purchases.
  • 3DuPont agreed in April 2004 to fund the majority of DDE's antitrust liabilities and costs, up to $150 million, and more than 75% of excess amounts.
  • 4DuPont will increase its consolidated litigation reserve by $118 million on a pre-tax basis due to these resolutions.
  • 5The resolution will lead to a special charge of approximately $100 million pre-tax for DuPont's fourth quarter 2004 results.
  • 6The charge equates to approximately $0.09 per share, after Dow's contributions are considered.

Frequently Asked Questions

This filing announces the resolution of two significant legal matters by DuPont Dow Elastomers LLC (DDE), a joint venture of DuPont and Dow Chemical Company. These resolutions involve a criminal plea agreement with the DOJ and a settlement of a class action antitrust lawsuit.

DuPont will incur an additional pre-tax charge of approximately $118 million to its consolidated litigation reserve. This is expected to result in a special charge of about $100 million pre-tax, or $0.09 per share, impacting the fourth quarter of 2004 results, after Dow's contractual contributions are factored in.

According to agreements made in April 2004 between DuPont and Dow, DuPont is responsible for funding 100 percent of DDE's antitrust liabilities and costs up to $150 million, and more than 75 percent of any excess. Consequently, DuPont is bearing the substantial financial impact of these resolutions.

DDE faced criminal charges from the U.S. Department of Justice related to the polychloroprene industry, which resulted in an $84 million fine. It also faced a federal class action antitrust lawsuit concerning the purchase of ethylene propylene diene monomer (EPDM), a type of synthetic rubber.