[GRAPHIC OMITTED](R)
January 26, 2006
BY COURIER AND BY EDGAR
Mr. Dale Welcome
Staff Accountant
Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 7020
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: E. I. du Pont de Nemours and Company
Form 10-K for the Fiscal Year Ended December 31, 2004
Form 10-Q for the Fiscal Quarter Ended September 30, 2005
File No. 001-00815
Dear Mr. Welcome:
On behalf of E. I. du Pont de Nemours and Company, a Delaware
corporation ("DuPont" or the "Company"), set forth below in this letter are the
Company's responses (the "Responses") to the comments (the "Comments") of the
staff (the "Staff") of the Securities and Exchange Commission (the
"Commission") set forth in the Staff's letter of December 23, 2005 (the
"Comment Letter").
For the convenience of the Staff, the Company has restated in this
letter each of the Comments in the Comment Letter and numbered each of the
Responses to correspond to the numbers of the Comments in the Comment Letter.
Capitalized terms used and not defined herein have the meanings given in the
above-referenced Form 10-K (the "Form 10-K") and/or Form 10-Q (the "Form
10-Q"). All references to notes, page numbers and captions in Responses 1-13
correspond to the notes, page numbers and captions in the Form 10-K. All
references to notes, page numbers and captions in Response 14 correspond to the
notes, page numbers and captions in the Form 10-Q.
Response to SEC Comment Letter
January 26, 2006
Page 2
General
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1. We have performed a limited review of your disclosures surrounding
your liability disclosures concerning PFOA and the latest action
against you concerning Teflon non-stick coating. We also have some
general questions about your presentation of liabilities. Please
understand that our questions are based on the observation that you
have an established history of material losses relating to litigation
and product liability. You have also identified litigation as a
critical accounting policy for your company.
The Company has noted your comment.
Form 10-K for the Fiscal Year Ended December 31, 2004
- -----------------------------------------------------
Note 21 - Other Accrued Liabilities, page F-25
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2. The amount that you classify as miscellaneous current liabilities is
substantial. Over 36% of your current liabilities are aggregated into
a miscellaneous category. We note that you only provide a narrative
unquantified description of those costs. Tell us what consideration
you have given to the requirement to state separately any liabilities
that exceed 5% of current liabilities. Please refer to Article 5-02 of
Regulation S-X for more guidance on this issue.
The Company has considered the guidance in Article 5.02 of
Regulation S-X. With respect to the Company's miscellaneous liabilities, no
items exceeded the 5% threshold as of December 31, 2003. As of December 31,
2004, forward hedge liabilities and advance customer payments each exceeded 5%
of total current liabilities. This resulted primarily because of lower current
borrowings at year-end 2004 v 2003 and, accordingly, the Company believed its
qualitative disclosure to be sufficient. Accrued current litigation liabilities
for both periods were well below 5% of total current liabilities. The Company
intends to include in all future filings with the Commission additional
quantitative disclosures with respect to all items that exceed 5% of total
current liabilities.
Note 23 - Other Liabilities, page F-25
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Response to SEC Comment Letter
January 26, 2006
Page 3
3. The amount that you classify as miscellaneous long-term liabilities is
substantial. Over 10% of your total liabilities are aggregated into a
miscellaneous category. We note that you only provide a narrative
unquantified description of those costs. Tell us what consideration
you have given to the requirement to state separately any long-term
liabilities that exceed 5% of total liabilities. Please refer to
Article 5-02 of Regulation S-X for more guidance on this issue.
The Company has considered the guidance in Article 5.02 of
Regulation S-X and notes that no items included in miscellaneous long-term
liabilities individually exceeded the 5% threshold in 2003 or 2004.
4. We note that the narrative description of miscellaneous current and
miscellaneous long-term liabilities includes restructuring reserves,
environmental costs and litigation. We also note that those items make
up three of the seven issues you have identified as accounting
policies that are critical to your company. Although we recognize that
certain contingent liabilities have been separately identified
elsewhere in your filing, the amounts described above, are
substantially larger than the individually identified amounts.
Considering that these accruals related to items that you have
identified as involving critical accounting policies, tell us why you
believe it is best to aggregate such accruals, rather than isolate
them.
The Company identifies restructuring reserves, environmental
matters and litigation not only in Note 1 to the Consolidated Financial
Statements (Summary of Significant Accounting Policies), but also in the MD&A
Section of the 2004 annual report on Form 10-K under "Forward Looking
Statements" and "Critical Accounting Estimates" because of the significant
judgment used to arrive at these estimates. In addition, the Company quantifies
and discusses its reserves for restructuring and environmental matters in its
annual report on Form 10-K at Note 4 on page F-13 and Note 25 on page F-32,
respectively. The Company quantifies and discusses the major components of its
reserves for litigation in its annual report on Form 10-K at Note 25 on page
F-28. None of these items nor any other individual component of Miscellaneous
other liabilities exceeded 5% of total liabilities at December 31, 2003 or
2004. Accordingly, the Company does not believe additional quantitative
disclosures in Notes 21 and 23 to the Consolidated Financial Statements are
needed for these items.
Response to SEC Comment Letter
January 26, 2006
Page 4
Note 25 - Commitments and Contingent Liabilities, page F-26
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Washington Works Class Action
- -----------------------------
5. Tell us the amount of the total damages alleged in the original August
2001 class action lawsuit. Please provide your answer notwithstanding
your views as to merit, ultimate liability or the potential
shortcomings involving alleged damages quantified in class action
suits. Please detail the components of the alleged damages. If at any
time subsequent to the original suit any damages were alleged, please
advise similarly.
In the action captioned Jack W. Leach, et al., v. E. I. du
Pont de Nemours & Company (Circuit Court of Wood County, W.Va., Civil Action
No. 01-C-608) (the "Washington Works Class Action"), plaintiffs sought, among
other things, unspecified compensatory damages for property damage and personal
injury and unspecified punitive damages. No quantification of damages was
alleged in the Washington Works Class Action. Subsequent to the filing of the
original action, plaintiffs' counsel never provided a quantification of damages
other than as part of settlement demands made during confidential mediation
discussions.
6. Tell us whether there are any other individuals, or classes not bound
by the settlement living near the Washington Works facility. Please
detail them and provide a description of any allegations, quantified
as appropriate.
The Class definition includes those individuals in certain
water districts who have consumed, for at least one year, water containing 0.05
parts per billion or greater of PFOA. Sixty-six individuals opted out of the
Class before final settlement was approved and, as such, are not bound by the
settlement. The Company is aware of no additional claims currently asserted
against it by any individual or class for the type of relief sought in the
Washington Works Class Action.
7. Tell us about the timing and schedule of the health study by the
independent panel of experts. What are the timeline/deadlines
associated with this portion of the settlement?
Neither the Settlement Agreement nor court order approving
the settlement provides a timeline or deadline for the independent Science
Panel's work. The Settlement Agreement requires that the Science Panel conduct
its work in phases
Response to SEC Comment Letter
January 26, 2006
Page 5
and complete its determinations before disclosing its conclusions to the
Parties. In October 2005, the Science Panel for the first time provided an
estimate for completion of its work. This initial estimate ranges from 18-24
months to four years (from October 2005), depending upon the particular health
points being investigated.
8. Tell us the amount you have spent on litigation and administration
related to the Washington Works facility related to PFOA. Provide your
response by reporting period since inception.
In connection with the Washington Works Class Action, the
Company has paid outside counsel and experts approximately $25 million in fees
and costs as of the date of this letter. The Company has also paid
approximately $3 million in fees and costs related to an action alleging that
runoff from a landfill containing waste from the Washington Works facility
(some of which contained PFOA) injured plaintiffs' herd of cows. The Company
also has paid approximately $3.6 million in fees and expenses responding to an
administrative complaint issued by the U.S. EPA (described in the 10-K at
F-29). In 2005, the Company has also spent approximately $11 million on various
studies, research, compliance and communication expenses related to PFOA,
although not necessarily limited to the Washington Works facility.
Through 2005, the Company has established reserves of $113
million in connection with the settlement of the Washington Works Class Action.
These reserves include $5 million placed in an interest-bearing escrow account
to fund the work of a science panel and an additional $10 million placed in an
interest-bearing escrow account to fund certain water treatment matters until
the science panel completes its work. DuPont has spent the following amounts
against these reserves:
Dollars in Millions
Payment to Class $70
Plaintiffs' attorneys fees
and costs $23
Water Treatment $ 3
Bottled Water Program $.5
As a result, the balance of these reserves at year-end 2005 is $16 million.
Response to SEC Comment Letter
January 26, 2006
Page 6
The Company has disclosed these reserves and their major
components as of December 31, 2004 in its 2004 annual report on Form 10-K at
Note 25 on page F-29 and in its subsequent quarterly reports on Form 10-Q. The
Company will disclose the updated reserves in its 2005 annual report on Form
10-K.
9. As of the date of your response, tell us whether you have any
conclusions as to the probability of there developing a determination
that a probable link between PFOA exposure and any disease exists.
Tell us about any information you have that would indicate a probable
link between PFOA exposure and disease.
Based on its understanding and evaluation of human health and
toxicology studies, the Company believes that the weight of evidence suggests
that PFOA exposure does not pose a health risk to the general public. To date,
no human health effects are known to be caused by PFOA even in workers who have
significantly higher exposure levels than the general population.
As the Company discussed in its 2005 second and third
quarterly reports on Form 10-Q, it is conducting a two-phase employee health
study on PFOA at its Washington Works facility located near Parkersburg, West
Virginia. Results from the first phase of this study for more than 1,000
workers indicate no association between exposure to PFOA and most of the health
parameters that were measured. From the Company's study, the only potentially
relevant association is a modest increase in some, but not all, cholesterol
fractions. It is unclear if this association is caused by PFOA exposure or is
related to some other variable. The Company is consulting with medical and
other scientific experts to design and conduct appropriate follow-up testing.
10. Tell us whether you believe that it is remote, reasonably possible, or
probable that you will be required to fund the medical monitoring
program. Describe your belief, notwithstanding your views concerning
the merit of the issue. Frame your conclusions in the context of the
dates you filed your 2004 10-K, your most recent interim quarterly
filing, as well as the date of your response. Please provide support
for your determinations.
Under the terms of the Settlement Agreement, it is the
responsibility of the independent Science Panel to determine whether a probable
link exists between exposure to PFOA and human disease. As disclosed in its
2004 annual report on Form 10-K at Note 25 on page F-29 and in its subsequent
quarterly reports on Form
Response to SEC Comment Letter
January 26, 2006
Page 7
10-Q, the Company is obligated to fund up to $235 million for a medical
monitoring program only if the Science Panel makes a finding that there is a
probable link between PFOA and one or more human diseases. Thus far, the Panel
has not made any such determination, whether definitive or otherwise. The
Company believes it is remote that the Science Panel will find any such
probable link and, therefore, believes it is remote that the Company will incur
additional losses related to this matter.
11. Tell us whether you believe that it is remote, reasonably possible, or
probable that you will incur losses for personal injuries related to
exposure to PFOA from the class action suit near the Washington Works
plant. Please provide support for your determination. Describe your
conclusion, notwithstanding your views concerning the merit of the
issue.
If the Science Panel delivers a "No Probable Link" finding
for all human diseases, all personal injury claims of any Class member are
released. Stated another way, all claims for personal injury will be released
except those for any disease for which the Science Panel makes such a probable
link finding. Without knowing the Science Panel's conclusions, the Company
cannot predict whether it will incur any such losses, although it believes it
is remote that the Science Panel will find any such probable link.
12. We note that you use PFOA in processing at various sites around the
world. Tell us whether you have any information that you may incur
losses related to the use of PFOA at any other plant sites. Please be
specific regarding such information. In particular, we are concerned
about your assessment of any asserted and unasserted claims as
required by SFAS 5. Quantify for us any other asserted claims related
to PFOA, other than the class action. Tell us whether you believe that
it is remote, reasonably possible, or probable that you will incur
losses related to exposure to PFOA from any other source. Describe
your belief, notwithstanding your views concerning the merit of the
issue.
The Company is not aware of any asserted claims based upon
PFOA exposure from releases attributable to any DuPont facility other than
Washington Works. Although PFOA is manufactured, processed or used at other
sites, the Company is not aware of any other site at or near which PFOA is
present in public drinking water supplies at levels such as those in the Class
definition of the Washington Works Class Action. The Company does not believe
it is probable that it will incur additional losses related to exposure to PFOA
from any other source.
Response to SEC Comment Letter
January 26, 2006
Page 8
13. Tell us the amount you have spent on litigation and administration
related to any non-Washington Works facility related to PFOA. Provide
your response by reporting period since the inception of any case.
The only litigation related to PFOA other than the Washington
Works Class Action are the matters discussed in response to Comment 14 and we
refer you to the response thereto. The Company has spent approximately $9
million in fees and costs through December 31, 2005, in connection with
responding to a subpoena issued by the Department of Justice. As stated in
response to Comment 8, the Company has also spent approximately $11 million on
various studies, research, compliance and communication expenses related to
PFOA, although not necessarily limited to the Washington Works facility.
Form 10-Q for the Fiscal Quarter Ended September 30, 2005
- ---------------------------------------------------------
Note 11 - Commitments and Contingent Liabilities, page 15
- ---------------------------------------------------------
Teflon Non-Stick Coating
- ------------------------
14. We note your disclosures concerning the class action filed against you
in various states concerning the alleged potential harm from products
containing Teflon. The amount and nature of your disclosures do not
appear to provide readers with an adequate scope of this issue. Please
tell us more about this issue, in particular:
o Tell us whether you are aware of any information that would
indicate that Teflon non-stick coating may be potentially
harmful to consumers;
Teflon(R) is a brand name and a registered trademark of
DuPont. Teflon(R) is not PFOA. PFOA (perfluorooctanoic acid), also known as
C-8, is an essential processing aid used to make fluoropolymers - high
performance plastics manufactured by a number of companies. PFOA and Teflon(R)
are entirely different - one is a processing aid, the other is a product brand.
Studies using U.S. Food & Drug Administration (FDA) standard
testing methods have found no detectable levels of PFOA in non-stick coatings
used for cookware sold under the Teflon(R) brand. The Danish Technical
Institute and China Academy of Inspection and Quarantine tested cookware with
Teflon(R) non-stick coating and did not detect PFOA.
Response to SEC Comment Letter
January 26, 2006
Page 9
However, according to an October 2005 published study conducted by
researchers at the FDA, PFOA was detected in minute quantities in cookware
using extreme and abusive test methods - methods that do not reflect what
happens when consumers use cookware. The quantities of PFOA detected through
these extreme measures were too small to measure migration of the PFOA out of
the cookware.
The FDA has determined that non-stick coatings are acceptable for
conventional kitchen use. Also, in 2003 the U.S. Consumer Product Safety
Commission rejected a petition to require a label warning for non-stick
coatings.
A peer-reviewed study commissioned by DuPont and published in June
2005 concluded that consumer products - including cookware, carpeting and
apparel - manufactured with DuPont's materials containing trace levels of PFOA
are safe to use. Commenting on PFOA as an essential processing aid in the
manufacture of fluoropolymers, the United States Environmental Protection
Agency (EPA) has said it "does not believe there is any reason for consumers to
stop using any consumer or industrial related products."
o Tell us whether any alleged damages have been quantified, or
any aspect of the cases, in the aggregate, specifies amounts
to be expended as part of any settlement. If so, please tell
us those amounts;
Plaintiffs have not quantified their alleged damages in any litigation
document, nor has the Company attempted to quantify what the alleged damages
would be. Each of the complaints in those actions recites that "this action
seeks monetary relief in excess of $5,000,000.00" in order to qualify for
federal jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C.
Sec. 1332(d)(2). The Company believes these suits to be without merit.
o Quantify the number of all actions and claimants from
inception through the date of your response, with a
roll-forward of activity by reporting period;
There are currently 15 cases in the United States. All are purported
intrastate class actions filed in federal district courts in 14 states (two
were filed in California). The cases are at preliminary stages, and no court
has ruled on class certification in any of the cases yet. There are currently
71 named plaintiffs in the 15 cases.
Response to SEC Comment Letter
January 26, 2006
Page 10
On quarter-by-quarter basis (using calendar quarters):
The first cases were filed in the United States in July 2005, so there
were no cases before the third quarter of 2005. Additional cases were filed,
and some complaints were amended to add or drop plaintiffs in July, August, and
September 2005. At the end of the quarter ending September 30, 2005 there were
14 cases filed in the United States, including 66 named plaintiffs.
In October and November 2005, one additional case was filed and one
complaint was amended to add and drop plaintiffs. At the end of the quarter
ending December 31, 2005 there were 15 cases filed in the United States and 71
named plaintiffs.
In December, 2005, a "Motion for Authorization to Institute a Class
Action and Be Ascribed the Status of Representative," captioned Champion v.
DuPont, was filed by a single named plaintiff in the Superior Court for the
Province of Quebec, Canada. The plaintiff seeks authorization from the court to
institute a class action on behalf of all Quebec consumers who have purchased
or used kitchen items, household appliances or food packaging containing
Teflon(R) or Zonyl(R) manufactured or sold by DuPont or its subsidiaries.
Damages are unquantified but are alleged to include the cost of replacement
products as well as $100 per class member as exemplary damages. No additional
pleadings have yet been filed.
o Tell us how much you have spent on litigation and
administration related to this issue, from inception to the
date of your response. Separate such costs by reporting
period;
In connection with these matters, the Company has paid outside counsel
approximately $200,000 for 3Q05 and $2.85 million for 4Q05. As stated in
response to Comment 8, the Company has also spent approximately $11 million on
various studies, research, compliance and communication expenses related to
PFOA, although not necessarily limited to the Washington Works facility.
o Tell us whether and to what extent any losses, or costs may
be recoverable from third parties;
For most years since 1967, the Company has maintained company-wide
excess liability insurance to respond to various products and non-products
claims and liabilities that may be asserted against it. In each year, that
excess liability
Response to SEC Comment Letter
January 26, 2006
Page 11
insurance attaches upon the exhaustion of a specified per-occurrence
self-insured retention. Above the self-insured retention in each policy year
are multiple layers of excess liability insurance provided by numerous domestic
and international insurance companies. The amount of such excess liability
insurance varies from year to year, and the specific insurers providing the
coverage vary from year to year as well. The Company has given notice of a
claim with respect to the PFOA/C-8 litigation to those relevant historical
liability insurers on the risk. However, no determination has yet been made as
to whether and to what extent such insurers will agree to provide coverage for
any costs or liabilities arising from such litigation.
Provide us with your assessment as to the probability (remote,
reasonably possible, probable) of material losses related to this
issue as of the date of your response. Provide support for your
conclusions.
The Company does not believe that these actions have any
merit and, therefore, does not believe it is probable that it will incur
material losses related to these actions.
* * *
The Company acknowledges that:
o The Company is responsible for the adequacy and accuracy of
the disclosure in their filings;
o Staff Comments or changes to disclosure in response to Staff
Comments do not foreclose the Commission from taking any
action with respect to the filing; and
o The Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under
the federal securities laws of the United States.
Response to SEC Comment Letter
January 26, 2006
Page 12
Please contact the undersigned at (302) 774-1000 should you require
further information or have any questions.
Very truly yours,
/s/ Gary M. Pfeiffer
Gary M. Pfeiffer
Senior Vice President and Chief
Financial Officer
E. I. du Pont de Nemours and Company
1007 Market Street
Wilmington, Delaware 19898
Telephone: (302) 774-1000
Fax: (302) 774-7869
cc: Lou R. Kling
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036