================================================================================
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, 2001
DUPONT FLOORING SYSTEMS, INC.
401(K) AND DUPONT RESIDENTIAL
FLOORING SYSTEMS, INC. 401(K) PLAN
(FULL TITLE OF THE PLAN)
DUPONT FLOORING SYSTEMS, INC.
175 TOWNPARK COMMONS - SUITE 400
KENNESAW, GEORGIA 30144
(NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER)
Pursuant to the requirements of the Securities and Exchange Act of 1934, DuPont
Flooring Systems, Inc. has duly caused this Annual Report to be signed by the
under signed hereunto duly authorized.
DuPont Flooring Systems 401(k)
Plan and DuPont Residential Flooring
Systems 401(k) Plan
Date: June 27, 2002
By /s/ Nancy Foreman
------------------------------------
Nancy Foreman
Benefits Manager
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Index
--------------------------------------------------------------------------------
Page
Financial Statements:
Report of Independent Accountants 1
Statements of Net Assets Available for Benefits as
of December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements 4-9
Supplemental Schedule*:
Schedule I - Schedule of Assets (Held at End of Year) 10-11
* Other supplemental schedules required by Section 2520-103.1 of the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 ("ERISA") have been omitted
because they are not applicable.
Report of Independent Accountants
To the Participants and Administrator of
the DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) 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 DuPont Flooring Systems, Inc. 401(k) Plan and DuPont
Residential Flooring Systems, Inc. 401(k) Plan (the "Plan") at December 31,
2001 and 2000, 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 financial 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.
/s/ PricewaterhouseCoopers
Hartford, Connecticut
June 4, 2002
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits
December 31,
2001 2000
Assets
Investments, at fair value $ 20,936,556 $ 20,482,285
--------------- ----------------
Net assets available for benefits $ 20,936,556 $ 20,482,285
=============== ================
The accompanying notes are an integral part of these financial statements.
2
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Years Ended
December 31,
2001 2000
Additions to net assets attributed to:
Investment income:
Interest $ 282,831 $ 244,965
Dividends 32,461 18,720
Net depreciation in fair value of investments (2,398,334) (1,826,703)
----------------- ------------------
(2,083,042) (1,563,018)
----------------- ------------------
Contributions:
Employer 982,146 828,654
Employee 4,179,382 4,128,895
----------------- ------------------
5,161,528 4,957,549
----------------- ------------------
Total additions 3,078,486 3,394,531
----------------- ------------------
Deductions from net assets attributed to:
Benefit payments 2,563,274 1,772,297
Transaction charge 21,941 14,220
Participant loans terminated
due to withdrawal of participants 66,226 68,956
----------------- ------------------
Total deductions 2,651,441 1,855,473
Change in forfeiture reserve, net 27,226 (17,532)
----------------- ------------------
Net increase 454,271 1,521,526
Net assets available for benefits at beginning of year 20,482,285 18,960,759
----------------- ------------------
Net assets available for benefits at end of year $ 20,936,556 $ 20,482,285
================= ==================
The accompanying notes are an integral part of these financial statements.
3
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
1. Description of Plan
The following description of the DuPont Flooring Systems, Inc. 401(k)
Plan and DuPont Residential Flooring Systems, Inc. 401(k) Plan (the "Plan")
provides only general information. Participants should refer to the Plan
agreements for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established effective July 1,
1995 and most recently amended and restated July 26, 2001, retroactively
effective January 1, 2001. Non-union employees of DuPont Flooring
Systems, Inc. and DuPont Residential Flooring Systems, Inc.
(collectively, the "Company") become eligible to participate upon
completing 60 days of service and attaining the age of 21. Prior to
January 1, 2001, employees became eligible to participate upon completing
six months of service and attaining the age of 21. The Plan is subject to
the provisions of ERISA.
Effective February 1, 2000, the Plan was amended to change the name from
DuPont Commercial Flooring Systems Inc. 401(k) Plan and DuPont Residential
Flooring Systems Inc. 401(k) Plan to DuPont Flooring Systems, Inc. 401(k)
Plan and DuPont Residential Flooring Systems, Inc. 401(k) Plan.
Contributions
Participants may contribute an amount equal to not less than one percent
nor more than 15 percent of their compensation for the contribution
period. Participants direct the investment of their contributions into
various investment options offered by the Plan. The Plan currently offers
a general account, various pooled separate accounts and two Company
common stock accounts as investment options for participants. Employee
contributions are recorded in the period during which the Company makes
payroll deductions from the participant's earnings.
Effective February 1, 2000, the Company will make a matching contribution
equal to $.30 for each $1.00 contributed by a participant, up to a
maximum of seven percent of the participant's compensation. Prior to
February 1, 2000, the Company made a matching contribution in an amount
equal to $.20 for each $1.00 contributed by a participant, up to a
maximum of eight percent of the participant's compensation. The Company
may also make discretionary qualified non-elective contributions.
Matching Company contributions are recorded monthly. Discretionary
qualified nonelective contributions, if any, are recorded annually.
The Conoco Class B Common Stock is an investment option of the Plan,
initiated as a result of a prior stock exchange. Participants were given
the option to exchange shares of DuPont Company common stock for an
appropriate number of shares of Conoco Class B Common Stock. 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.
4
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocation of the Company's contribution and Plan earnings. Earnings
are allocated by fund based on the ratio of a participant's account
invested in a particular fund to all participants' investments in that
fund. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
Vesting
Participants are immediately vested in their own contributions and the
Company's discretionary qualified non-elective contributions plus actual
earnings thereon. Vesting in the Company's matching contribution portion of
their accounts is based on years of service. A participant becomes 20
percent vested after one year of service, 40 percent after two years of
service, 60 percent after three years of service, 80 percent after four
years of service and 100 percent vested after five years of service.
However, if an active participant dies prior to attaining the normal
retirement age, the participant's account becomes 100 percent vested.
Benefit Payments
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of the vested portion of their account,
a distribution in the form of an annuity, or installment payments.
Distributions are subject to the applicable provisions of the Plan
agreement. Benefit claims are recorded as expenses when they have been
approved for payment and paid by the Plan.
Participant Loans
Participants may borrow up to a maximum of $50,000 or 50 percent of the
vested portion of their account balance, whichever is less. Loans are
calculated on a fully amortized basis. A loan is collateralized by the
balance in the participant's account and bears interest at a rate
commensurate with market rates for similar loans, as defined (5.75% to
10.75% and 8.75% to 10.75% for the years ended December 31, 2001 and 2000,
respectively).
Cash Equivalents
Contributions received prior to year end awaiting investment in the
appropriate investment option at December 31, 2001 are invested in the
CIGNA Guaranteed Short-Term Account (formerly "CIGNA Charter Guaranteed
Short-Term Account"), which is stated at fair value.
2. Summary of Accounting Policies
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of
accounting. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and changes therein. Actual
results could differ from those estimates. Certain reclassifications have
been made to the 2000 amounts to conform with current year presentation.
5
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
Investment Valuation
Investments in the general account are non-fully benefit responsive and are
stated at fair value. Investments in pooled separate accounts are stated at
fair value, as determined by the unit value reported by Connecticut General
Life Insurance Company ("CG Life"). Participant loans are stated at fair
value. The Company common stock accounts are valued at their quoted market
price.
3. Investments
Investments that represent five percent or more of the Plan's net assets
are separately identified below.
December 31,
2001 2000
CIGNA Guaranteed Income Fund/1/
interest rates, 4.95%; 5.25% $ 5,260,739 $ 4,332,981
CIGNA Fidelity Advisor Growth Opportunities Fund
units, 53,285; 51,298 2,836,341 3,238,437
CIGNA Fidelity Contrafund Fund
units, 38,233; 37,033 2,909,166 3,259,988
CIGNA Growth & Income/Multi-Manager Fund/2/
units, 236,511; 239,337 2,613,445 3,077,868
CIGNA INVESCO Dynamics Fund
units, 50,800; 34,391 1,154,187 1,168,276
CIGNA Lifetime40 Fund
units, 107,031; 113,322 1,254,399 1,434,654
DuPont Company Common Stock
shares, 27,314; N/A 1,161,128 N/A
/1/ formerly "CIGNA Charter Guaranteed Income Fund"
/2/ formerly "CIGNA Charter Growth & Income Fund"
6
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
Investment Performance
During the years ended December 31, 2001 and 2000, the Plan's investments
(including interest, dividends, realized gains and losses on investments
bought and sold and unrealized gains and losses on investments held during
the year) appreciated (depreciated) in value as follows:
Years Ended
December 31,
2001 2000
General Account:
CIGNA Guaranteed Income Fund $ 234,533 $ 202,257
Pooled Separate Accounts:
CIGNA Fidelity Advisor Growth Opportunities Fund (487,353) (727,483)
CIGNA Fidelity Contrafund Fund (430,379) (268,277)
CIGNA Growth & Income/Multi-Manager Fund (417,436) (188,439)
CIGNA International Blend/Bank of Ireland Fund/3/ (131,242) (66,513)
CIGNA INVESCO Dynamics Fund (437,471) (202,209)
CIGNA Janus Worldwide Fund (232,364) (208,305)
CIGNA Lifetime20 Fund (9,691) (1,684)
CIGNA Lifetime30 Fund (5,364) (461)
CIGNA Lifetime40 Fund (99,422) (19,635)
CIGNA Lifetime50 Fund (2,094) 50
CIGNA Lifetime60 Fund 536 228
CIGNA S&P 500(R)Index Fund/4/ (78,096) (53,739)
CIGNA TimesSquare Corporate Bond Fund/5/ 30,944 10,791
------------- -------------
(2,299,432) (1,725,676)
Company Common Stock:
Conoco Class B Common Stock 11 (82,644)
DuPont Company Common Stock (66,452) 337
------------- -------------
(66,441) (82,307)
Participant loans 48,298 42,708
------------- -------------
Net decrease $ (2,083,042) $ (1,563,018)
============= =============
/3/ formerly "CIGNA Charter Foreign Stock II Fund"
/4/ formerly "CIGNA Charter Large Company Stock Index Fund"
/5/ formerly "CIGNA Charter Corporate Bond Fund"
7
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
4. Investment Contracts with Insurance Company
The Plan participates in a contract with CG Life via an investment in
the CIGNA Guaranteed Income Fund. CG Life commingles the assets of the
CIGNA Guaranteed Income Fund with other assets. For the Plan's investment
in the CIGNA Guaranteed Income Fund, the Plan is credited with interest at
the interest rates specified in the contract which ranged from 5.25% to
4.95% and was 5.25% for the years ended December 31, 2001 and 2000,
respectively, net of asset charges. CG Life prospectively guaranteed the
interest rates credited for the CIGNA Guaranteed Income Fund for six
months. As discussed in Note 2, the CIGNA Guaranteed Income Fund is
included in the financial statements at fair value which, principally
because of the periodic interest rate reset process, approximates contract
value.
5. Related-Party Transactions
Plan assets include investments in funds managed by CG Life, an indirect
wholly-owned subsidiary of CIGNA. CG Life is the Plan's trustee and as
such, transactions with the trustee qualify as party-in-interest
transactions, which are exempt from prohibited transaction rules. Personnel
and facilities of the Company have been used to perform administrative
functions for the Plan at no charge to the Plan. In addition, the Plan
holds shares of DuPont Company Common Stock, the Plan Sponsor, which also
qualifies as a party-in-interest. The Plan also holds shares of Conoco
Class B Common Stock, a former wholly-owned subsidiary of the Plan sponsor,
which also qualifies as a party-in-interest.
6. 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. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
7. Tax Status
The Company has adopted a CG Life prototype plan which has been
determined by the Internal Revenue Service to be in accordance with
applicable sections of the Internal Revenue Code ("IRC"). The Plan has
not yet filed for an individual determination letter. However, the Plan
administrator believes that the Plan is designed and is currently being
operated in compliance with applicable requirements of the IRC.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
8
DuPont Flooring Systems, Inc. 401(k) Plan and
DuPont Residential Flooring Systems, Inc. 401(k) Plan
Notes to Financial Statements
-------------------------------------------------------------------------------
8. Reconciliation of Plan Financial Statements to the Form 5500
Certain balances included on Schedule H (Part I and II) of the Annual
Return/Report of Employee Benefit Plan (the "Form 5500") have been
reclassified for purposes of presentation in these financial statements
to provide additional disclosure.
9. Forfeitures
The net change in forfeiture reserve represents the net change in the
available forfeiture reserve balance from the prior year plus the current
year forfeitures generated net of forfeitures used. Forfeitures result
from non-vested Company contributions remaining in the Plan for all
terminated employees. Upon reaching the break-in-service requirement, as
defined in the Plan agreement, forfeitures generated are added to the
forfeiture reserve balance. The forfeiture reserve of $118,578 and
$59,573 at December 31, 2001 and 2000, respectively, is available to
offset Company contributions or pay Plan expenses, which would be
otherwise payable by the Company, in accordance with the Plan agreement.
9
DuPont Flooring Systems, Inc. 401(k) Plan and Supplemental Schedule
DuPont Residential Flooring Systems, Inc. 401(k) Plan Schedule I
Schedule H (Line 4i) Form 5500 - Schedule of Assets (Held at End of Year)
December 31, 2001
-------------------------------------------------------------------------------
(c)
(b) Description of investment including (e)
Identity of issue, borrower, maturity date, rate of interest, (d) Current
(a) lessor, or similar party collateral, par or maturity value Cost value
* Connecticut General Life CIGNA Guaranteed Income Fund N/A** $ 5,260,739
Insurance Company
* Connecticut General Life CIGNA Fidelity Advisor Growth N/A** 2,836,341
Insurance Company Opportunities Fund
* Connecticut General Life CIGNA Fidelity Contrafund Fund N/A** 2,909,166
Insurance Company
* Connecticut General Life CIGNA Growth & Income/Multi- N/A** 2,613,445
Insurance Company Manager Fund
* Connecticut General Life CIGNA International Blend/Bank of N/A** 521,000
Insurance Company Ireland Fund
* Connecticut General Life CIGNA INVESCO Dynamics Fund N/A** 1,154,187
Insurance Company
* Connecticut General Life CIGNA Janus Worldwide Fund N/A** 954,067
Insurance Company
* Connecticut General Life CIGNA Lifetime20 Fund N/A** 149,310
Insurance Company
* Connecticut General Life CIGNA Lifetime30 Fund N/A** 112,420
Insurance Company
* Connecticut General Life CIGNA Lifetime40 Fund N/A** 1,254,399
Insurance Company
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
10
DuPont Flooring Systems, Inc. 401(k) Plan and Supplemental Schedule
DuPont Residential Flooring Systems, Inc. 401(k) Plan Schedule I
Schedule H (Line 4i) Form 5500 - Schedule of Assets (Held at End of Year)
December 31, 2001 (continued)
-------------------------------------------------------------------------------
(c)
(b) Description of investment including (e)
Identity of issue, borrower, maturity date, rate of interest, (d) Current
(a) lessor, or similar party collateral, par or maturity value Cost value
* Connecticut General Life CIGNA Lifetime50 Fund N/A** $ 49,422
Insurance Company
* Connecticut General Life CIGNA Lifetime60 Fund N/A** 23,142
Insurance Company
* Connecticut General Life CIGNA S&P 500(R)Index Fund N/A** 734,394
Insurance Company
* Connecticut General Life CIGNA TimesSquare Corporate Bond N/A** 430,569
Insurance Company Fund
* National Financial Conoco Class B Common Stock N/A** 2,062
Services Corporation
* National Financial DuPont Company Common Stock N/A** 1,161,128
Services Corporation
* Plan Participants Participant Loans N/A** 770,544
* Connecticut General Life Cash Equivalents (CIGNA Guaranteed N/A** 221
Insurance Company Short-Term Account)
-----------
Total $20,936,556
===========
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
11