PAGE 1
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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, 1996
THRIFT PLAN FOR EMPLOYEES OF
CONOCO INC.
(FULL TITLE OF THE PLAN)
CONOCO INC.
600 NORTH DAIRY ASHFORD ROAD
HOUSTON, TX 77079
(NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER)
============================================================
PAGE 2
INDEX
-----
Page(s)
-------
Report of Independent Accountants.................. 4
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, with Fund Information at
December 31, 1996 and 1995........................ 5-8
Statements of Changes in Net Assets Available
for Plan Benefits, with Fund Information
for the Years Ended December 31, 1996 and 1995.... 9-12
Notes to Financial Statements..................... 13-21
Supplemental Schedules*:
Schedule I:
Schedule of Assets Held for Investment Purposes
at December 31, 1996............................ 22
Schedule II:
Schedule of Reportable Transactions for the
Year Ended December 31, 1996.................... 23
EXHIBITS
--------
Exhibit
Number Description
- ------- -----------
24 Consent of Independent Accountants
*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.
PAGE 3
Pursuant to the requirements of the Securities and
Exchange Act of 1934, Conoco Inc. has duly caused this
Annual Report to be signed by the undersigned hereunto duly
authorized.
Thrift Plan for Employees of
Conoco Inc.
Date: June 24, 1997
By: /s/Mario Rocconi, Jr.
---------------------------------
Mario Rocconi, Jr.
Vice President of Human Resources
PAGE 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of the Thrift Plan for Employees of
Conoco Inc. and the Employee Benefit Plans Board of
Conoco Inc.
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects,
the net assets available for plan benefits of the Thrift
Plan for Employees of Conoco Inc. (the "Plan" at December
31, 1996 and 1995, and the changes in net assets available
for plan benefits for the years then ended, in conformity
with generally accepted accounting principles. These
financial statements are the responsibility of the Plan
Administrator; 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
generally accepted auditing standards 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 the Plan
Administrator, and evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The additional information included in Schedules I and II is
presented for purposes of additional analysis and is not a
required part of the basic financial statements but is
additional information required by ERISA. The Fund
Information in the statement of net assets available for
plan benefits and the statement of changes in net assets
available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets
available for plan benefits and the changes in net assets
available for plan benefits of each fund. Schedules I and
II and the Fund Information have been subjected to the
auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial
statements takes as a whole.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
June 6, 1997
PAGE 5
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1996
(Dollars In Thousands, Except Unit or Share Values)
FUND INFORMATION
-------------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
------------- ----------- ---------- ----------- ------- -------
Investments, at fair value
(notes 1, 2 and 3)
DuPont Company common stock
(cost $257,308) ............... $475,483<Fa>
Mutual Funds (cost
$213,929) ..................... $141,847
Common/Collective Trusts
(cost $86,909)................. $62,973 $57,610
Short-term investments & cash
(cost $39,562)................. $38,605 163 72 547 66
Loans to participants-
principal balance ............. $36,945
---------- -------- ------- -------- ------- -------
38,605 142,010 63,045 476,030 36,945 57,676
Investments, at Contract Value
Fixed Income Fund
(cost $1,952,549)............ 1,952,549<Fa>
---------- ------- ------- -------- ------- -------
Total investments ........... 1,991,154 142,010 63,045 476,030 36,945 57,676
Receivables
Due from Conoco Inc. ............ 3,079 533 212 1,386 252
---------- -------- ------- -------- ------- -------
Net assets available for plan
benefits ........................ $1,994,233 $142,543 $63,257 $477,416 $36,945 $57,928
========== ======== ======= ======== ======= =======
Unit or share values (note 2) ..... $100.926 $80.650 $16.370 $94.125 $49.161
======== ======= ======= ======= =======
<FN>
<Fa> Represents more than 5% of the net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
Continued on next page
PAGE 6
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1996 (Continued)
(Dollars In Thousands, Except Unit or Share Values)
FUND INFORMATION
-----------------------------------
Merrill
Merrill Merrill Lynch
Lynch Lynch Basic
Global Capital Value
Holdings Fund Fund Total
---------- --------- -------- -----------
Investments, at fair value
(notes 1, 2 and 3)
DuPont Company common stock
(cost $257,308) ............. $475,483
Mutual Funds (cost
$213,929).................... $32,682 $31,264 $30,303 236,096
Common/Collective Trusts
(cost $86,909)............... 120,583
Short-term investments & cash
(cost $39,562)............... 38 36 35 39,562
Loans to participants-
principal balance ........... 36,945
-------- -------- ------- ----------
32,720 31,300 30,338 908,669
Investments, at Contract Value
Fixed Income Fund
(cost $1,952,549)............ 1,952,549
------- ------- ------ ---------
Total investments ........... 32,720 31,300 30,338 2,861,218
Receivables
Due from Conoco Inc............ 127 116 135 5,840
------- -------- ------- ---------
Net assets available for plan
benefits ...................... $32,847 $31,416 $30,473 $2,867,058
======= ======== ======= ===========
Unit or share values (note 2) ... $14.080 $31.050 $31.000
====== ====== =======
The accompanying notes are an integral part of these financial statements.
PAGE 7
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1995
(Dollars In Thousands, Except Unit or Share Values)
FUND INFORMATION
--------------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
----------- ----------- ---------- ---------- ------- -------
Investments, at fair value
(notes 1, 2 and 3)
DuPont Company common stock
(cost $243,232) .............. $383,492<Fa>
Mutual Funds (cost
$189,120)..................... $154,191<Fa>
Common/Collective Trusts $59,232 $26,392
(cost $63,092)................
Short-term investments & cash
(cost $27,657)................ $26,988 149 57 371 25
Loans to participants-
principal balance ............ $38,074
---------- -------- ------- -------- ------- -------
Investments, at Contract Value.. 26,988 154,340 59,289 383,863 38,074 26,417
Fixed Income Fund
(contract value $1,843,776)... 1,843,776<Fa>
--------- ------- ------- ------- ------- -------
Total investments ............ 1,870,764 154,340 59,289 383,863 38,074 26,417
Receivables
Due from Conoco Inc. ........... 3,505 699 232 1,377 115
---------- -------- ------- -------- ------- -------
Net assets available for plan
benefits ..................... $1,874,269 $155,039 $59,521 $385,240 $38,074 $26,532
========== ======== ======= ======== ======= =======
Unit or share values (note 2) .... $93.46 $85.98 $14.58 $69.88 $40.09
====== ====== ====== ====== ======
<FN>
<Fa> Represents more than 5% of the net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
Continued on next page
PAGE 8
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC.
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1995 (Continued)
(Dollars In Thousands, Except Unit or Share Values)
FUND INFORMATION
---------------------------------------------
Merrill
Merrill Merrill Merrill Lynch
Lynch Lynch Lynch Basic
Global Balanced Capital Value
Holdings Fund Fund Fund Total
-------- --------- -------- -------- -----------
Investments, at fair value
(notes 1, 2 and 3)
DuPont Company common stock
(cost $243,232) ............. $383,492
Mutual Funds (cost
$189,120).................... $25,197 $4,632 $24,550 $15,959 224,529
Common/Collective Trusts
(cost $63,092)............... 85,624
Short-term investments & cash
(cost $27,657)............... 24 4 24 15 27,657
Loans to participants-
principal balance ........... 38,074
-------- ------- ------- ------- ----------
Investments, at Contract Value.. 25,221 4,636 24,574 15,974 759,376
Fixed Income Fund
(contract value $1,843,776).. 1,843,776
------- ------ ------- ------- ----------
Total investments............ 25,221 4,636 24,574 15,974 2,603,152
Receivables
Due from Conoco Inc............ 125 24 109 86 6,272
-------- ------- -------- ------- -----------
Net assets available for plan
benefits .................... $25,346 $4,660 $24,683 $16,060 $2,609,424
======= ======= ======== ======= ===========
Unit or share values (note 2) ... $13.32 $11.37 $30.55 $28.31
====== ====== ====== ======
The accompanying notes are an integral part of these financial statements.
PAGE 9
THRIFT PLAN FOR EMPLOYEES
OF CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
(Dollars in Thousands)
FUND INFORMATION
---------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
--------- --------- -------- ---------- --------- ---------
Investment income
Interest ................. $148,182 $31 $13 $87 $3,111 $8
Dividends ................ 25,201 11,531
Distribution of loan
interest income......... 1,788 258 99 761 (3,111) 69
Net realized gains.......... 1,852 2,898 52,664 1,190
Net unrealized appreciation
(depreciation) in fair
value of investments ..... (10,957) 4,197 77,915 6,946
--------- --------- -------- --------- --------- --------
Total investment income. 149,970 16,385 7,207 142,958 8,213
Contributions
Conoco Inc. contributions
(net of forfeitures
applied of $456)........ 13,396 2,833 983 5,734 827
Participants ............ 19,136 4,536 1,463 8,218 17 1,342
Rollovers................. 42,900 2,135 724 3,039 2,154
---------- --------- -------- --------- --------- --------
225,402 25,889 10,377 159,949 17 12,536
---------- --------- -------- --------- --------- --------
Withdrawals ................ (153,038) (9,406) (4,294) (15,148) (3,556) (1,747)
Net transfers among funds
Loans .................... (12,903) (1,317) (573) (3,306) 18,748 (172)
Loan principal repayments. 9,025 1,447 524 4,054 (16,291) 406
Interfund transfers....... 52,265 (29,011) (2,308) (52,560) 20,373
Affiliated company
transfers in(out), net.... (787) (98) 10 (813) (47)
--------- --------- -------- --------- --------- --------
(105,438) (38,385) (6,641) (67,773) (1,146) 18,860
--------- --------- -------- --------- --------- --------
Net Increase(Decrease)..... 119,964 (12,496) 3,736 92,176 (1,129) 31,396
Net assets available
for plan benefits:
Beginning of year ....... 1,874,269 155,039 59,521 385,240 38,074 26,532
---------- --------- -------- --------- -------- --------
End of year .............$1,994,233 $142,543 $63,257 $477,416 $36,945 $57,928
========== ========= ======== ========= ======== ========
The accompanying notes are an integral part of these financial statements.
Continued on next page
PAGE 10
THRIFT PLAN FOR EMPLOYEES
OF CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996 (Continued)
(Dollars in Thousands)
FUND INFORMATION
------------------------------------------
Merrill
Merrill Merrill Merrill Lynch
Lynch Lynch Lynch Basic
Global Balanced Capital Value
Holdings Fund Fund Fund Total
--------- --------- --------- -------- -----------
Investment income
Interest ................. $6 $0 $6 $5 $151,449
Dividends ................ 2,039 106 3,077 1,954 43,908
Distribution of loan
interest income......... 47 1 43 45
Net realized gains.......... 627 23 557 522 60,333
Net unrealized appreciation
(depreciation) in fair
value of investments...... 1,035 (88) 1,401 80,449
-------- --------- --------- -------- -----------
Total investment income. 3,754 130 3,595 3,927 336,139
Contributions
Conoco Inc. contributions
(net of forfeitures
applied of $456).......... 579 9 540 528 25,429
Participants ............. 958 13 870 889 37,442
Rollovers................. 235 148 888 52,223
-------- --------- --------- -------- -----------
5,526 152 5,153 6,232 451,233
-------- --------- --------- -------- -----------
Withdrawals................. (987) (52) (2,380) (1,215) (191,823)
Net transfers among funds
Loans .................... (160) (196) (121)
Loan principal repayments. 322 3 259 251
Interfund transfers....... 2,781 (4,763) 3,869 9,354
Affiliate company
transfers in(out), net.... 19 28 (88) (1,776)
-------- --------- --------- -------- -----------
1,975 (4,812) 1,580 8,181 (193,599)
-------- --------- --------- -------- -----------
Net Increase(Decrease).... 7,501 (4,660) 6,733 14,413 257,634
Net assets available
for plan benefits:
Beginning of year ........ 25,346 4,660 24,683 16,060 2,609,424
-------- --------- --------- -------- -----------
End of year .............. $32,847 $ 0 $31,416 $30,473 $2,867,058
======== ========= ========= ======== ===========
The accompanying notes are an integral part of these financial statements.
PAGE 11
THRIFT PLAN FOR EMPLOYEES
OF CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands)
FUND INFORMATION
---------------------------------------------------------------------
3-Way DuPont Merrill
Fixed Fidelity Asset Common Lynch
Income Magellan Allocation Stock Loan Equity
Fund Fund Fund Fund Fund Index
----------- --------- -------- --------- --------- ---------
Investment income
Interest ................. $148,446 $18 $7 $47 $2,983 $2
Dividends ................ 8,742 10,904
Distribution of loan
interest income ........ 1,829 236 83 676 (2,983) 31
Net realized gains(losses) 7,306 1,308 28,126 606
Net unrealized appreciation
in fair value of
investments ............ 25,003 12,131 49,585 5,305
--------- -------- -------- -------- --------- ---------
Total investment income. 150,275 41,305 13,529 89,338 5 944
Contributions
Conoco Inc.
contributions (net
of forfeitures
applied of $128)....... 15,089 2,845 1,026 5,579 398
Participants .............. 20,660 5,287 1,613 8,845 787
Rollovers................. 12,164 507
----------- --------- -------- --------- --------- ---------
198,188 49,437 16,168 104,269 7,129
----------- --------- -------- --------- --------- ---------
Withdrawals ................ (123,608) (6,009) (1,668) (14,318) (2,603) (604)
Net transfers among funds
Loans .................... (14,499) (1,144) (540) (3,438) 20,167 (128)
Loan principal repayments. 8,637 1,193 392 3,124 (14,121) 157
Interfund transfers....... 23,214 (10,859) (1,350) (10,319) 5,623
Affiliated company
transfers in(out), net.... (733) (130) (40) (126) (62) 117
----------- --------- -------- --------- --------- ---------
(106,989) (16,949) (3,206) (25,077) 3,381 5,165
----------- --------- -------- --------- --------- ---------
Net Increase(Decrease).... 91,199 32,488 12,962 79,192 3,381 12,294
Net assets available
for plan benefits:
Beginning of year ........ 1,783,070 122,551 46,559 306,048 34,693 14,238
----------- --------- -------- --------- --------- ---------
End of year ..............$1,874,269 $155,039 $59,521 $385,240 $38,074 $26,532
=========== ========= ======== ========= ========= =========
The accompanying notes are an integral part of these financial statements.
Continued on next page
PAGE 12
THRIFT PLAN FOR EMPLOYEES
OF CONOCO INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995 (Continued)
(Dollars in Thousands)
FUND INFORMATION
--------------------------------------------
Merrill
Merrill Merrill Merrill Lynch
Lynch Lynch Lynch Basic
Global Balanced Capital Value
Holdings Fund Fund Fund Total
---------- --------- --------- --------- -----------
Investment income
Interest ................... $2 $1 $3 $2 $151,511
Dividends .................. 1,327 317 2,499 668 24,457
Distribution of loan
interest income .......... 58 9 34 27
Net realized gains (losses) .. 140 (238) 350 240 37,838
Net unrealized appreciation
in fair value of
investments ............... 2,320 833 3,120 2,467 100,764
--------- -------- --------- --------- -----------
Total investment income .. 3,847 922 6,006 3,404 314,570
Contributions
Conoco Inc.
contributions (net of forfeitures
applied of $128).......... 656 132 501 345 26,571
Participants .............. 1,081 225 838 630 39,966
Rollovers................... 1 1 12,673
---------- -------- --------- --------- -----------
5,584 1,279 7,346 4,380 393,780
---------- -------- --------- --------- -----------
Withdrawals .................. (1,117) (321) (766) (605) (151,619)
Net transfers among funds
Loans ...................... (194) (16) (120) (88)
Loan principal repayments .. 248 50 171 149
Interfund transfers......... (6,585) (2,098) (44) 2,418
Affiliated company
transfers in(out), net...... (8) (30) (5) (1,017)
---------- -------- --------- ---------- -----------
(7,648) (2,393) (789) 1,869 (152,636)
---------- -------- --------- ---------- -----------
Net Increase(Decrease)..... (2,064) (1,114) 6,557 6,249 241,144
Net assets available
for plan benefits:
Beginning of year .......... 27,410 5,774 18,126 9,811 2,368,280
--------- --------- -------- ---------- -----------
End of year ................ $25,346 $4,660 $24,683 $16,060 $2,609,424
========= ========= ======== ========== ===========
The accompanying notes are an integral part of these financial statements.
PAGE 13
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. ("THE COMPANY")
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF THE THRIFT PLAN:
The following description of the Thrift Plan for Employees of
Conoco Inc. (the "Plan") provides only general information. Members should
refer to the Plan document for the Plan's provisions.
THE PLAN
The Plan is a defined contribution plan which was established in
1952 by Conoco Inc. (the "Company"), a wholly-owned subsidiary of E. I. du
Pont de Nemours and Company (DuPont). The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 and the Internal
Revenue Code.
The purpose of the Plan is to encourage employees to save
systematically a portion of their current compensation and to assist them to
accumulate additional means for the time of their retirement. The Plan is a
tax-qualified, contributory profit sharing plan. Employees of the Company,
including employees of Affiliated Companies that have adopted the Plan, who
have previously met the eligibility requirements of the Plan or who have
completed a designated period of 12 consecutive months during which they
complete 1,000 hours or more of service; who are regular, full time employees
and have completed at least one year of continuous service, are eligible to
participate in a qualified profit-sharing plan of an Affiliated Company from
which they were transferred, or became, prior to January 1, 1993, and
remained members of the Retirement Plan of Conoco Inc. (now the Pension and
Retirement Plan of E. I. du Pont de Nemours and Company (Title 2)); are
eligible to participate in the Plan.
An eligible Participant may authorize the Company to make a payroll
deduction under the Plan ranging from 1% to 19% of monthly compensation. The
amount deducted can be deposited into a before-tax or after-tax account or
some combination thereof; however, no more than 15% may be deposited into a
before-tax account. Participants' monthly deductions up to 6% are called
Basic Deposits. The Company will contribute an amount equal to 100% of the
Participant's monthly basic deposits. Subject to certain limitations,
certain Participants are eligible to make Supplemental Deposits, lump sum
deposits or deposits in the form of monthly deductions in excess of 16%. Due
to the discrimination rules of the Internal Revenue Code, only "Non-highly
Compensated" Participants are currently able to make lump sum Supplemental
Deposits.
PAGE 14
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
A Participant with less than five years of participation credit or
service, who withdraws any matched before-tax or after-tax deposits will
forfeit a portion of related Company Contributions in accordance with the
specific Plan provisions. Company Contributions will be suspended for six
months if a Participant makes an in-service withdrawal of any earnings in the
before-tax or after-tax accounts, or Basic Deposits or Company Contributions
contributed during the last 24 months. Employee deposits and matching Company
Contributions will be suspended for up to 12 months if a Participant
withdraws any before-tax contribution prior to age 59-1/2. In certain
circumstances such a withdrawal may also preclude a Participant from making
any before-tax contributions in the year following the withdrawal.
Any vested Participant who separates from service, including one
who retires, may elect to make a full account withdrawal at any time.
Required minimum distributions commence in March following the year in which
a former Participant reaches age 70-1/2. A Participant who is an active
employee may elect to defer minimum distributions until he separates from
service or may elect to commence minimum distribution payments in March
following the year in which he reaches age 70-1/2.
Participants may borrow up to one-half of their nonforfeitable
account balances subject to certain minimum and maximum loan limitations.
The loans are executed by promissory notes and have a minimum term of 12
months and a maximum term of 60 months, except for qualified residential
loans which have a maximum term of 120 months. The loans bear an interest
rate equal to the average rate charged by selected major banks to prime
customers for secured loans. The loans are repaid over the term in monthly
installments of principal and interest by payroll deduction. A participant
also has the right to repay the loan in full at any time without penalty.
INVESTMENT FUNDS
The following investment funds have been established for the
investment of Employee Deposits and Company Contributions. The nature
of the investments maintained in each fund is described below:
Fixed Income Fund -- Investments under agreements with one or more
financial institutions, including insurance
companies, banks and other investment
organizations that provide for a stable rate
of return.
Fidelity Magellan Fund -- A growth mutual fund offered through Fidelity
Investments Institutional Operation Company.
PAGE 15
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
3-Way Asset Allocation Fund -- 3-Way Asset Allocation Fund with money
invested by BZW Global Investors
among stocks, bonds, and cash
(money market).
DuPont Common Stock Fund -- Common Stock of E. I. du Pont de Nemours and
Company, Conoco's ultimate parent company.
Loan Fund -- Participant loans--amounts transferred from
other funds that are loaned to
participants.
Merrill Lynch Funds -- Prior to March 1, 1996, a group of 4
different mutual funds and 1 common/
collective trust, each with its own
investment objective offered through
Merrill Lynch. On March 1, 1996, Merrill
Lynch merged the Balanced Fund into the
Global Holdings Fund; thereby eliminating
the Balanced Fund from Merrill Lynch's
investment line-up. Prior to the merger,
participants were permitted to transfer
their Balanced Fund holdings to any of the
other investment options available in the
Plan. The Plan's position remaining in the
Balanced Fund, immediately prior to the
merger, was converted to the Merrill Lynch
Capital Fund.
Participants may allocate their Employee Deposits and Company
Contributions among all funds at their discretion and may reallocate the
amounts in their accounts among all funds at their discretion. Members may
reallocate the amounts in their accounts among all funds, except the Loan
Fund, at their discretion.
Affiliated Company transfers in(out) represent the net movement of
Participant account balances among the Plan and other defined contribution
benefit plans sponsored by Affiliated Companies.
PAGE 16
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
ADMINISTRATION
The designated trustee of all the aforementioned funds is
Merrill Lynch Trust Company of America (Merrill Lynch). The administration
of the Plan is vested in the Employee Benefit Plans Board. The Board of
Directors of Conoco Inc. or its delegee may designate three or more persons
to serve on the Employee Benefit Plans Board, which has the authority to
prescribe regulations for the administration of the Plan, review all claims
for benefits under the Plan and enter into agreements with one or more
entities, including, but not limited to insurance companies, banks and other
investment organizations, to provide a stable rate of return for the Fixed
Income Fund. All recordkeeping and trustee fees of the Plan are paid by the
Company. Brokerage fees, transfer taxes, investment fees and other expenses
incident to the purchase and sale of securities and investments in the Fixed
Income Fund, Fidelity Magellan Fund, DuPont Common Stock Fund, 3-Way Asset
Allocation Fund, and Merrill Lynch Funds shall be included in the cost of
such securities or investments, or deducted from the sales proceeds, as the
case may be.
While the Company has not expressed any intent to terminate the
Plan, it is free to do so at any time. In the event the Plan is terminated,
all participants become vested and the distribution of all account balances
will be made based upon the valuation of the participant's account on the
termination date.
RECEIVABLES
Receivables are comprised of Employee Deposits of $2,665,824 and
$2,832,057, Company Contributions of $2,022,788 and $2,241,256 and loan
repayments of $1,151,245 and $1,197,181, which are amounts due as of
December 31, 1996 and December 31, 1995, respectively.
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The accompanying financial statements are prepared on the accrual
basis of accounting. The Plan's investments are stated at fair value, except
for the Fixed Income Fund, which is valued at contract value which
approximates fair value. The Fixed Income Fund guaranteed investment
contracts, separate account portfolios and synthetic guaranteed investment
contracts are fully benefit responsive and thus, are stated at cost plus
accrued interest, using the contracted interest rates applied to the daily
account balances. Mutual Funds are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end.
Common/Collective Trust Funds are stated at the fair value of all underlying
assets as reported by the applicable custodian. Loans to participants,
short-term investments, and cash are valued at cost which approximates fair
value. Common Stock is valued at its quoted market price at year-end.
PAGE 17
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
The Company may, at its option, issue DuPont common stock in lieu
of cash contributions to the DuPont Common Stock Fund and also in lieu of
cash dividends on DuPont common stock. The number of shares issued is based
upon the cash value of the contributions and dividends divided by the market
value of DuPont common stock at the end of the month of issue. Shares of
DuPont common stock are allocated to participants in the DuPont Common Stock
Fund based on the ratio of the amount deposited to each participant's account
to the total amount contributed to the Fund.
Dividend income is recorded on the ex-dividend date and interest
income is recorded when earned. Realized gains and losses on the sale of
the DuPont Common Stock Fund investment securities are based on average
cost of the securities sold. Purchases and sales are recorded on a trade
date basis.
RECLASSIFICATIONS
Certain reclassifications have been made from the prior year to
conform to the current year presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan Administrator to
make estimates and assumptions that affect the reported amounts in the
financial statements. Actual results could differ from those estimates.
NOTE 3 -- INVESTMENTS
The Fixed Income Fund option provided by the Plan is also available
to Participants in the Investment Plan for Salaried Employees of Consol Inc.
(the "Consol Plan"), administered by Consol Inc., a corporate joint venture
owned equally by DuPont and subsidiaries of RWE AG of Germany, and Sentinel
Transportation Company Thrift Plan (the "Sentinel Plan") administered by
Sentinel Transportation Company, a wholly-owned subsidiary of DuPont.
Accordingly, the investments in these funds by Participants in the Plan and
the Consol and Sentinel plans have been commingled for investment purposes;
however, the three plans' assets are accounted for separately by the trustee.
PAGE 18
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
The Fixed Income Fund consists of guaranteed investment contracts
(GIC), separate account portfolios (SAP) and synthetic guaranteed investment
contracts (SYN).
The following individual contracts represent more than 5% of the
net assets available for benefits for the years ended December 31, 1996 and
1995:
Metropolitan Life Insurance Co. - 7.26%, 6/30/01 (SAP)
Prudential Insurance Co. - 8.35%, 7/1/99 (SAP)
Prudential Insurance Co. - 7.10%, 7/1/99 (SAP)
The crediting interest rates ranged from 5.74% to 9.96% for the
years ended December 31, 1996 and 1995. The fund's blended rate of return for
the year was 7.99% in 1996 and 8.33% in 1995.
The crediting rates for SAP and SYN contracts are reset annually
and are based on the market value of the underlying portfolio of assets
backing 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.
PAGE 19
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
The contract values and fair values of investment contracts as of
December 31, 1996 are as follows:
Contract Value Fair Value
---------------- ----------
(Dollars in Thousands)
Guaranteed Investment Contracts $ 670,540 $ 579,935
Synthetic Guaranteed Investment Contracts 721,062 689,310
Separate Account Guaranteed Investment 560,947 719,288
Contracts ---------- ----------
$1,952,549 $1,988,533
========== ==========
Included in the fair value of synthetic guaranteed investment
contracts is ($1,245) related to wrapper contracts which guarantee the
contract value of the synthetic guaranteed investment contracts for
participant-initiated withdrawal events.
NOTE 4 -- REALIZED AND UNREALIZED GAINS AND LOSSES
Realized and unrealized gains and losses are calculated based upon
historical cost of assets. Such gains and losses are computed on a current
value basis for Form 5500. The difference may result in a differing classi-
fication between realized and unrealized but the total gain or loss will be
unaffected.
NOTE 5 -- INCOME TAX STATUS
The Internal Revenue Service has determined and informed the
Company by a letter dated August 7, 1995 that the Plan is qualified and the
trust established under the Plan is tax-exempt, under the appropriate
sections of the Code. The Plan has been amended since receiving the
determination letter. However, the Plan Administrator and the Plan's tax
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Code.
PAGE 20
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE 6 -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500:
December 31
1996 1995
----------- -----------
(Dollars in Thousands)
Net assets available for plan benefits
per the financial statements $2,867,058 $2,609,424
Less: Amounts allocated to
withdrawing participants (1,802) (682)
----------- -----------
Net assets available for plan benefits
per the Form 5500: $2,865,256 $2,608,742
=========== ===========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended
December 31, 1996
--------------------
(Dollars in Thousands)
Benefits paid to participants per the
financial statements $191,823
Add: Amounts allocated to withdrawing
participants at December 31, 1996 1,802
Less: Amounts allocated to withdrawing
participants at December 31, 1995 (682)
------------
Benefits paid to participants per the Form 5500 $192,943
============
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
NOTE 7 -- RELATED PARTY TRANSACTION
Certain Plan investments are shares of mutual funds managed by the
Trustee. Therefore, transactions in these investments quality as
party-in-interest transactions which are exempt from the prohibited
transaction rules.
PAGE 21
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOTE 7 -- SUBSEQUENT EVENTS
(A) Effective January 1, 1997, the regular savings contribution
limit was increased to 19% of monthly pay. This new limit continues to be
subject to legal limitations.
(B) Effective January 1, 1997, retired Members rehired as temporary
employees who are in monthly payment status from the Plan will be allowed to
elect to continue or discontinue their monthly payments while employed.
(C) Effective July 1, 1997, the following additional investment
funds will be available to Plan Participants:
Index Funds
Small Company Stock Index Fund
International Stock Index Fund
Asset Allocation Portfolios
Conservative Asset Allocation Portfolio
Moderate Asset Allocation Portfolio
Aggressive Asset Allocation Portfolio
Mutual Funds
AIM Constellation A
AIM Value A
Fidelity Fund
Fidelity Equity - Income
Fidelity Growth & Income
Fidelity Low-Priced Stock
Franklin Balance Sheet Investment
Franklin Growth I
Franklin Small Cap Growth I
Hotchkis & Wiley International
Janus Enterprise
Janus Mercury
Merrill Lynch Growth A
MFS Research A
MFS Total Return A
Templeton Foreign I
Templeton Growth I
Also effective July 1, 1997, the Merrill Lynch Equity Index Trust
will be renamed Large Company Stock Index Fund.
PAGE 22
SCHEDULE I
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description Cost Current Value
----------- ---------- -------------
(Dollars in Thousands)
Aetna Life Insurance Co.-9.32%, 6/1/99 (GIC).....$ 62,200 $ 62,200
Aetna Life Insurance Co.-9.89%, 6/1/00 (GIC)..... 69,274 69,274
Aetna Life Insurance Co.-7.76%, 1/2/01 (GIC)..... 108,005 108,005
Bankers Trust Co.-5.74%, 12/31/01 (SYN).......... 92,116 92,116
Bankers Trust Co.-7.67%, 12/31/25 (SYN).......... 70,514 70,514
CDC Investment Mgmt. Corp.-7.1%, 10/1/02 (SYN)... 38,288 38,288
CDC Investment Mgmt. Corp.-6.8%, 10/1/02 (SYN)... 31,573 31,573
Citibank-7.40%, 8/31/01 (SYN).................... 44,892 44,892
Deutsche Bank-6.34%, 12/31/25 (SYN).............. 96,941 96,941
Metropolitan Life Insurance Co.-7.26%,6/30/01(SAP) 194,120 194,120
J. P. Morgan-5.62%, 7/1/97 (SYN)................. 103,957 103,957
New York Life Insurance Co.-9.71%, 6/1/99 (GIC).. 64,210 64,210
New York Life Insurance Co.-9.11%, 6/1/99 (GIC).. 61,639 61,639
Principal Financial Group-9.5%, 6/1/98 (GIC)..... 59,097 59,097
Principal Financial Group-9.10%, 6/1/99 (GIC).... 59,651 59,651
Providian Capital Management-6.10%, 1/4/99 (SYN). 121,528 121,528
Prudential Insurance Co.-9.66%, 6/1/98 (GIC)..... 59,800 59,800
Prudential Insurance Co.-9.96%, 6/1/98 (GIC)..... 61,164 61,164
Prudential Insurance Co.-8.26%, 6/30/98 (SAP).... 184,706 184,706
Prudential Insurance Co.-7.08%, 6/30/98 (SAP).... 182,121 182,121
Travelers Insurance Co.-9.66%, 6/1/00 (GIC)...... 65,500 65,500
Union Bank of Switzerland-6.67%, 1/1/01 (SYN).... 121,253 121,253
---------- ----------
Total GIC, SAP and SYN $1,952,549 $1,952,549
Fidelity Magellan 127,595 141,847
3-Way Asset Allocation Fund 42,736 62,973
DuPont Common Stock Fund 257,308 475,483
Loans to Participants (8.0%-8.5%) 36,945 36,945
Short-Term Investments & Cash 21,204 39,562
Merrill Lynch Equity Index 44,173 57,610
Merrill Lynch Global Holdings 30,406 32,682
Merrill Lynch Capital Fund 29,105 31,264
Merrill Lynch Basic Value Fund 26,823 30,303
---------- ----------
Total Investment Portfolio $2,568,844 $2,861,218
========== ==========
GIC-Guaranteed Investment Contract
SAP-Separate Account Portfolio.
SYN-Synthetic Guaranteed Investment Contract.
PAGE 23
SCHEDULE II
THRIFT PLAN FOR EMPLOYEES
OF
CONOCO INC. (THE "COMPANY")
ITEM 27D-SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
TRANSACTION OR SERIES OF TRANSACTIONS IN
EXCESS OF 5% OF CURRENT VALUE OF PLAN ASSETS AS OF JANUARY 1, 1996
Contract Current
Identity Value/ Value On
of Party Description Purchase Sales Cost of Transaction Gain On
Involved of Asset Price Price Asset Date Transaction
- -------- ----------- --------- ------- ------- ----------- -----------
DuPont Common Stock $207,068 $207,068 $207,068
DuPont Common Stock $243,680 191,016 243,680 $52,664
Aetna GIC 142,248 142,248 142,248
Fidelity Magellan Fund 73,933 73,933 73,933
Fidelity Magellan Fund 77,073 75,221 77,073 1,852
Note: Aetna represent transactions for the Conoco, Consol and Sentinel Plans
on a commingled basis.
PAGE 24
EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------
24 Consent of Independent Accountants.
PAGE 25
Exhibit 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-36339) of E. I. du Pont de Nemours and
Company of our report dated June 6, 1997 which appears on page 4 of this
Form 11-K.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
June 25, 1997