UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-815

E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)

1007 Market Street, Wilmington, Delaware 19898
(Address of Principal Executive Offices)

(302) 774-1000
(Registrant's Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

996,340,097 shares (excludes 87,041,427 shares of treasury stock) of common stock, $0.30 par value, were outstanding at July 31, 2003.

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Table of Contents

The terms "DuPont" or the "company" as used herein refer to E. I. du Pont de Nemours and Company and its consolidated subsidiaries (which are wholly owned or majority owned), or to E. I. du Pont de Nemours and Company, as the context may indicate.

2

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.

4

See Notes to Consolidated Financial Statements.

5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)

These statements are unaudited, but in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to provide a fair statement of the financial position, results of operations and cash flows for the dates and periods covered. Results for interim periods should not be considered indicative of results for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the company's Annual Report on Form 10-K for the year ended December 31, 2002. Certain reclassifications of prior years' data have been made to conform to current year classifications.

The company has stock-based employee compensation plans which are described more fully in Note 25 to the company's consolidated financial statements included in the company's Annual Report on
Form 10-K for the year ended December 31, 2002. Prior to January 1, 2003, the company accounted for these plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. Accordingly, no compensation expense had been recognized for fixed options granted to employees.

Effective January 1, 2003, the company adopted the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," as amended, prospectively for all new awards granted to employees on or after January 1, 2003. Most awards under the company's plans vest over a three-year period. Therefore, the cost related to stock-based employee compensation included in the determination of net income (loss) for the three- and six-month periods ended June 30, 2003 and 2002, is less than that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123. The following table illustrates the effect on net income (loss) and earnings (loss) per share as if the fair value based method had been applied in each period.

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

In January 2003, the Financial Accounting Standards Board issued Interpretation (FIN) No. 46, "Consolidation of Certain Variable Interest Entities" (VIEs), which is an interpretation of Accounting Research Bulletin (ARB) No. 51, "Consolidated Financial Statements." FIN No. 46 addresses the application of ARB No. 51 to VIEs, and generally would require that assets, liabilities, and results of activity of a VIE be consolidated into the financial statements of the enterprise that is considered the primary beneficiary. This interpretation applies immediately to VIEs created after January 31, 2003, and to VIEs in which a company obtains an interest after that date. The company has not created or obtained an interest in any VIEs in 2003. For VIEs in which a company holds a variable interest that it acquired before February 1, 2003, the interpretation applies in the first interim period beginning after June 15, 2003.

The company identified its commercial paper conduit and certain relationships within the financing structures of its synthetic lease programs as VIEs where DuPont was considered the primary beneficiary. In May 2003, the company purchased the assets of the VIE that served as the owner/lessor of a manufacturing facility in Singapore for $80. In July 2003, the assets related to the remaining synthetic lease programs that were identified as VIEs and the receivables which secured the notes issued by the commercial paper conduit were purchased for $274 and $445, respectively.

The company has also identified two other nonconsolidated entities as VIEs where DuPont is considered the primary beneficiary. One entity provides manufacturing services for the company and the other entity is a real estate rental operation. The company guarantees all debt obligations of these entities, which totaled $147 at June 30, 2003. These amounts are included within obligations for equity affiliates and others in Note 12. In accordance with the provisions of FIN No. 46, the company will consolidate these VIEs in the third quarter of 2003. The company does not expect the consolidation of these VIEs to have a material effect on the consolidated results of operations or financial position.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

Interest incurred in second quarter 2002 includes a charge of $21 for the early extinguishment of $242 of outstanding debentures; this charge principally represents premiums paid to investors.

During the second quarter and year-to-date 2003, there were no changes in estimates related to reserves established for restructuring initiatives in prior years. A complete discussion of these activities is included in Item 8 of the company's Annual Report on Form 10-K for the year ended December 31, 2002, at Note 5, "Employee Separation Costs and Write-down of Assets."

During the second quarter of 2002, the company recorded total charges of $246 in the Textiles & Interiors and the Agriculture & Nutrition segments. A charge of $209 was recorded in the Textiles & Interiors segment in connection with a restructuring program instituted in the second quarter to better align the business with accelerating structural changes so as to become a more competitive integrated enterprise and to respond to continuing weakening economic conditions, particularly in the U.S. textile industry. At

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

June 30, 2003, essentially all 2,000 affected employees had been terminated. In addition, a charge of $37 was recorded in the Agriculture & Nutrition segment in connection with the company reaching a definitive agreement to sell a European manufacturing facility that was no longer required under the strategic business plan. The transaction closed during the second quarter 2003.

Year-to-date 2002 includes a net charge of $9 related to exiting joint ventures in China. Of the net charge, $39 was recorded to withdraw from a polyester joint venture due to depressed market conditions. This charge, which covers the write-off of the company's investment in this joint venture, was partly offset by a $30 gain resulting principally from a favorable litigation settlement associated with the company's exit from a nylon joint venture in 1999.

In other restructuring activities, a program was instituted in the fourth quarter of 2002 in the Coatings & Color Technologies segment to enhance its position as a leader in the highly competitive global coatings industry, to align its businesses with accelerating structural changes, and to become a more competitive integrated enterprise. At June 30, 2003, approximately 500 of the 775 employees affected had been terminated.

Account balances and activity for the 2002 and 2001 programs are as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

In April 2003, the company formed a majority-owned venture, The Solae Company, with Bunge Limited, comprised of the company's Protein Technologies business and Bunge's North American and European ingredients operations. As a result of this transaction, the company's ownership interest in the Protein Technologies business was reduced from 100 percent to 72 percent. The company recorded a nonoperating pretax gain of $62 in second quarter 2003 as the fair market value of the businesses contributed by Bunge exceeded the net book value of the 28 percent ownership interest acquired by Bunge.

On January 1, 2003, the company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires the company to record an asset and related liability for the costs associated with the retirement of long-lived tangible assets when a legal liability to retire the asset exists. This includes obligations incurred as a result of acquisition, construction, or normal operation of a long-lived asset. The provisions of SFAS No. 143 require the asset retirement obligations to be recorded at fair value at the time the liability is incurred. Accretion expense is recognized as an operating expense using the credit-adjusted risk-free interest rate in effect when the liability was recognized. The associated asset retirement obligations are capitalized as part of the carrying amount of the long-lived asset and depreciated over the estimated remaining useful life of the asset.

The company has recorded asset retirement obligations primarily associated with closure, reclamation, and removal costs for mining operations related to the production of titanium dioxide. The adoption of SFAS No. 143 resulted in a charge of $46 ($29 after-tax) which has been reported as a cumulative effect of a change in accounting principle. Such amount represents the difference between assets and liabilities recognized prior to the application of this statement and the net amounts recognized pursuant to this statement.

The estimated asset retirement obligation would have been $56 on January 1, 2002 and $60 on December 31, 2002 had this statement been applied as of January 1, 2002. Set forth below is a reconciliation of the company's estimated asset retirement obligations from January 1, 2003 through June 30, 2003.

Had the provisions of SFAS No. 143 been applied as of January 1, 2002, the pro forma effects for the three- and six-month periods ended June 30, 2002 on Income Before Cumulative Effect of Changes in Accounting Principles and Net Income for the periods would have been reductions of approximately $0.01 per share.

On January 1, 2002, the company adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which resulted in a cumulative effect charge to income of $2,944. This charge was attributable to goodwill impairments of $2,866 in the Agriculture & Nutrition segment and $78 in the Textiles & Interiors segment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

Set forth below is a reconciliation of the numerator and denominator for basic and diluted earnings per share calculations for the periods indicated:

The following average stock options are antidilutive, and therefore, are not included in the diluted earnings per share calculation since the exercise price is greater than the average market price during the period:

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

Changes in goodwill for the period ended June 30, 2003 are summarized in the table below.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

The gross carrying amounts and accumulated amortization in total by major class of other intangible assets are as follows:

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

The aggregate amortization expense for definite-lived intangible assets was $61 and $117 for the three and six months ended June 30, 2003, respectively. The estimated aggregate pretax amortization for 2003 and each of the next five years is approximately $274, $278, $274, $258, $244, and $225.

The weighted average interest rate on short-term borrowings outstanding at June 30, 2003 and December 31, 2002 was 1.7 percent and 3.5 percent, respectively.

In 2001, the company received proceeds of $2,037 from entering into two minority interest structures. A complete discussion of these structures is included in Item 8 of the company's Annual Report on Form 10-K for the year ended December 31, 2002 at Note 22, "Minority Interests." In the second quarter of 2003, the company redeemed these structures for $2,037.

On January 1, 2003, the company adopted FIN No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others," which modifies existing disclosure requirements for most guarantees and requires that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee. The fair value of guarantees is determined by consideration of data in observable markets, comparable transactions and the utilization of probability-weighted discounted net cash flow models. The fair value of guarantees issued or modified from January 1, 2003 through June 30, 2003 was not material.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

Information related to the company's guarantees is summarized in the following table:

The company warrants to the original purchaser of its products that it will, at its option, repair or replace, without charge, such products if they fail due to a manufacturing defect. The term of these warranties varies (30 days to 10 years) by product. The estimated product warranty liability for the company's products as of June 30, 2003 is $27. The company has recourse provisions for certain products that would enable recovery from third parties for amounts paid under the warranties. The company accrues for product warranties when, based on available information, it is probable that customers will make claims under warranties relating to products that have been sold, and a reasonable estimate of the costs (based on historical claims experience relative to sales) can be made.

Set forth below is a reconciliation of the company's estimated product warranty liability from December 31, 2002 through June 30, 2003:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

In connection with acquisitions and divestitures, the company has indemnified respective parties against certain liabilities that may arise in connection with these transactions and business activities prior to the completion of the transaction. In addition, the company indemnifies its duly elected or appointed directors and officers to the fullest extent permitted by Delaware law against liabilities incurred as a result of their activities for the company, such as adverse judgments relating to litigation matters. The term of these indemnifications, which typically pertain to environmental, tax, and product liabilities, is generally indefinite. If the indemnified party were to incur a liability or have a liability increase as a result of a successful claim, pursuant to the terms of the indemnification, the company would be required to reimburse the indemnified party. The maximum amount of future payments is generally unlimited. The carrying amount recorded for all indemnifications as of June 30, 2003 and December 31, 2002 is $27 and $31, respectively. Although it is reasonably possible that future payments may exceed amounts accrued, due to the nature of indemnified items, it is not possible to make a reasonable estimate of the maximum potential loss or range of loss. No assets are held as collateral and no specific recourse provisions exist.

The company has directly guaranteed various debt obligations under agreements with third parties related to equity affiliates, customers and other unaffiliated companies. At June 30, 2003, the company had directly guaranteed $980 of such obligations, plus $229 relating to guarantees of certain obligations and liabilities of Conoco, Inc. as discussed below. This represents the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees.

Of the $980 directly guaranteed obligations, $77 is for short-term (less than one year) bank loans related to customers, $42 is for long-term (1-5 years) bank loans related to customers, $308 is for short-term (less than one year) bank borrowings related to equity affiliates, $405 is for long-term (1-6 years) bank borrowings related to equity affiliates, $103 is for historical obligations of a previously divested subsidiary (term 7 years), $29 is for revenue bonds (1-12 years), and $16 is for leases on equipment and facilities for external customers and equity affiliates. Existing guarantees for customers arose as part of contractual sales agreements. Existing guarantees for equity affiliates arose for liquidity needs in normal operations. The company would be required to perform on these guarantees in the event of default by the guaranteed party. In certain cases, the company has recourse to assets held as collateral as well as personal guarantees from customers. Assuming liquidation, these ass ets are estimated to cover approximately 25 percent of the $125 of guaranteed obligations of customers. No material loss is anticipated by reason of such agreements and guarantees. At June 30, 2003, the company had no liabilities recorded for these obligations.

In addition, the company has historically guaranteed certain obligations and liabilities of Conoco, Inc., its subsidiaries and affiliates, which totaled $229 as of June 30, 2003. Conoco has indemnified the company for any liabilities the company may incur pursuant to these guarantees. The Restructuring, Transfer and Separation Agreement between DuPont and Conoco requires Conoco to use its best efforts to have Conoco, or any of its subsidiaries, substitute for DuPont. No material loss is anticipated by reason of such agreements and guarantees. At June 30, 2003, the company had no liabilities recorded for these obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

As of June 30, 2003 the company had synthetic lease programs primarily for corporate aircraft, rail cars, short-lived equipment and manufacturing and warehousing facilities. In May 2003, the company terminated the program related to the manufacturing facility in Singapore. In connection with its synthetic lease programs, the company had residual value guarantees in the amount of $295 at June 30, 2003. The guarantee amounts are tied to the unamortized lease values of the assets under synthetic lease and are due should the company decide neither to renew these leases nor to exercise its purchase option. At June 30, 2003, the company had no liabilities recorded for these obligations. Any residual value guarantee amounts paid to the lessor may be recovered by the company from the sale of the assets to a third party.

The remaining synthetic lease programs, with the exception of the short-lived equipment program, were terminated in July 2003. Residual value guarantees related to the programs terminated in July 2003 were $234 at June 30, 2003.

As described in Note 23 to the company's consolidated financial statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2002, the company had an accounts receivable securitization program to sell an interest in a revolving pool of trade accounts receivable. In connection with this program, the company was committed to provide up to 25 percent or $128 of liquidity support at June 30, 2003. At June 30, 2003, the company had no liabilities recorded for these obligations. In July 2003, the accounts receivable securitization program was terminated.

In June 1997, the company entered into contracts with Computer Sciences Corporation (CSC) and Accenture LLP which are described in more detail in Note 23 to the company's consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2002. In April 2003, the contract with CSC was revised, resulting in the elimination of the future minimum payments due under the original contract.

The company is subject to various lawsuits and claims arising out of the normal course of its business, including those discussed below. These lawsuits and claims include actions based on alleged exposures to products; intellectual property and environmental matters; and contract and antitrust claims. The company accrues for contingencies when a loss is probable and the amounts can be reasonably estimated. While the ultimate liabilities resulting from such lawsuits and claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the company's consolidated financial position or liquidity.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

In 1991, DuPont began receiving claims by growers that use of BenlateÒ 50 DF fungicide had caused crop damage. DuPont has since been served with several hundred lawsuits, most of which have been disposed of through trial, dismissal or settlement. The status of BenlateÒ cases is indicated in the table below:

Twenty-one of the ninety-five cases pending against the company at June 30, 2003, were filed by growers who allege plant damage from using BenlateÒ 50 DF and, in some cases, BenlateÒ WP. Forty-one of the pending cases seek to reopen settlements with the company by alleging that the company committed fraud and misconduct, as well as violations of federal and state racketeering laws. Five of the pending cases include claims for alleged personal injuries arising from exposure to BenlateÒ 50 DF and/or BenlateÒ WP. Twenty-eight of the pending cases include claims for alleged damage to shrimping operations from BenlateÒ OD.

In August 2001, a Florida jury found DuPont liable under Florida's racketeering statute and for product defect involving alleged crop damage. In March 2002, pursuant to DuPont's motion, the judge withdrew the jury's finding of liability under the racketeering statute and entered judgment for the plaintiffs in the amount of $29. The judgment was later reduced to $26. DuPont has appealed. The company has concluded that it is not probable that the adverse judgment in this case will ultimately be upheld; therefore, DuPont has not established a reserve for this matter. The remaining crop cases are in various stages of development, principally in trial and appellate courts in Florida.

In forty-one cases, plaintiffs who previously settled with the company seek to reopen their settlements through cases alleging fraud and other misconduct relating to the litigation and settlement of their BenlateÒ 50 DF claims. The Florida federal court has dismissed the lead case of the twenty-eight reopener cases pending before it. Plaintiffs have appealed. The thirteen remaining reopener cases are in various stages of development in trial and appellate courts in Florida and Hawaii.

There are currently five cases pending involving allegations that BenlateÒ caused birth defects to children exposed in utero. One case was tried in Florida resulting in a verdict of $4 against DuPont. The verdict was reversed at the intermediate appellate level because the plaintiffs' scientific support for causation was insufficient. The case was appealed to the Florida Supreme Court and the verdict for the plaintiffs was reinstated with interest. DuPont does not expect the Florida Supreme Court's decision to have precedential value in the other four cases because Florida uses a different standard to determine admissibility than the federal courts and the majority of state courts. Of these four cases, the federal court in West Virginia has dismissed one case on the grounds of insufficient scientific support for

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

causation. It has been appealed to the Fourth Circuit Court of Appeals. The remaining three cases are pending in Delaware. Two of these cases were dismissed for not being timely filed and were appealed to the Delaware Supreme Court. In April of 2003, the Delaware Supreme Court reversed the dismissals and remanded these two cases, involving six plaintiffs, to the trial court for further proceedings. In the third case pending in Delaware and scheduled for trial in November of 2003, DuPont argued its motion to dismiss the case due to insufficient scientific support for causation. The court has not yet ruled on the motion.

The twenty-eight cases involving damage to shrimp are pending against the company in state court in Broward County, Florida. These cases were brought by Ecuadorian shrimp farmers who allege that BenlateÒ OD applied to banana plantations in Ecuador ran-off and was deposited in plaintiffs' shrimp farms, causing massive numbers of shrimp to die. Two cases were tried in the fall of 2000 and in early 2001, which resulted in adverse judgments of approximately $14 in each case. DuPont contends that the injuries alleged are attributable to a virus, Taura Syndrome Virus, and in no way involve BenlateÒ OD. The company has appealed both cases. DuPont has not established an accrual for either case because the company has concluded that it is not probable that the adverse judgments ultimately will be upheld. The 26 untried cases are on hold pending the resolution of the appeal of the case tried in the fall of 2000. Oral arguments on this appeal took place at the intermediate appellate court in October 2002. Oral arguments on the second case that DuPont appealed were heard by the intermediate appellate court on July 2, 2003.

A securities fraud class action was filed in September 1995 by a shareholder in federal district court in Florida against the company and the then-Chairman. The plaintiffs in this case alleged that DuPont made false and misleading statements and omissions about BenlateÒ 50 DF, with the alleged effect of inflating the price of DuPont's stock between June 19, 1993, and January 27,1995. The district court certified the case as a class action. In March 2003, DuPont entered into an agreement to settle this case for $77.5. On March 14, 2003, the court gave preliminary approval to the settlement. The court granted final approval of the settlement on May 30, 2003. The settlement amount has been paid and the case has been closed.

DuPont does not believe that BenlateÒ caused the damages alleged in each of these cases and denies the allegations of fraud and misconduct. DuPont continues to defend itself in ongoing matters. As of June 30, 2003, DuPont has incurred costs and expenses of approximately $1,900 associated with these matters, of which approximately $200 has been recovered through insurance. While management recognizes that it is reasonably possible that additional losses may be incurred, a range of such losses cannot be reasonably estimated at this time.

In August 2003, DuPont will receive insurance proceeds of $25 related to the settled securities fraud class action suit.

In the second half of 2002, the United States Environmental Protection Agency (EPA) initiated a priority review of perfluorooctanoic acid and its salts (collectively referred to herein as PFOA), which to date have not been regulated by the EPA. As part of this review, on November 4, 2002, the EPA issued a revised draft hazard assessment of PFOA and on April 14, 2003, it issued a preliminary risk assessment on

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

PFOA. The EPA's preliminary risk assessment indicates potential exposure of the U.S. general population to PFOA at very low levels and states that there could be a potential risk of developmental and other effects associated with PFOA exposure. The EPA states that considerable scientific uncertainty remains regarding potential risks associated with PFOA. However, the EPA has said it does not believe there is any reason for consumers to stop using any consumer or industrial-related products because of questions about PFOA. The EPA also started a public process to identify and generate additional information to develop a more accurate risk assessment and to identify what voluntary or regulatory mitigation or other actions, if any, might be appropriate. The EPA also invited interested parties to participate in publicly negotiated agreements, known as enforceable consent agreements or ECAs, with the EPA to develop information that enhances the understanding of the sources of PFOA in the environment and t he pathways by which human exposure to PFOA is occurring.

DuPont uses PFOA as a processing aid to manufacture fluoropolymer resins and dispersions at various sites around the world. DuPont purchased PFOA from a third party until it began manufacturing PFOA in North Carolina in the fall of 2002. Some of the waste stream from the manufacture of PFOA is treated at DuPont's Chambers Works site in New Jersey. DuPont also manufactures fluorinated telomers that are used in soil, stain and grease repellants for the paper, apparel, upholstery and carpet industries. DuPont does not use PFOA as a processing aid in the manufacture of these telomers, although there have been some reports suggesting that telomer chemistry can form trace amounts of PFOA.

Based on over fifty years of industry experience and extensive scientific study, DuPont does not believe there is any evidence that PFOA causes any adverse human health affects or harms the environment. However, DuPont respects the EPA's position that questions related to exposure routes and the potential toxicity of PFOA remain. Therefore, before April 14, 2003, DuPont and other interested companies filed Letters of Intent with the EPA specifying on-going voluntary programs concerning PFOA and fluorinated telomers. In addition, the companies have outlined plans for continued research, emission reduction activities, and product stewardship activities to help address the EPA's questions. The result of the process that the EPA has put in place will be a refined risk assessment, including comments and recommendations by the agency's Science Advisory Board, and a determination as to what, if any, regulations are appropriate regarding PFOA. DuPont estimates that this process will continue through the end of 2003.

DuPont's Washington Works plant in Wood County, West Virginia, is one of the sites at which the company uses PFOA as a processing aid to manufacture fluoropolymer resins and dispersions. In November of 2001, the West Virginia Department of Environmental Protection (WVDEP) and DuPont signed a Multimedia Consent Order (the Order) that requires environmental sampling and analyses and the development of screening levels for PFOA that is used or managed by the Washington Works plant. The Order requires that DuPont investigate the levels of PFOA in the local environment and drinking water and fund a study by toxicologists, supervised by the WVDEP, to determine acceptable levels of PFOA in the environment and drinking water. Through this process, a screening level of 150 micrograms of PFOA per liter of drinking water was established in May 2002. None of the local sources of drinking water have tested near the screening level. Currently, DuPont recovers or destroys 75 percent of the PFOA that potentially coul d be emitted or discharged during the manufacturing process at the Washington Works plant. By the end of 2004, the company expects that more than 90 percent will be recovered or destroyed.

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

In August 2002, the WVDEP issued its Final Ammonium Perfluorooctanoate Assessment of Toxicity Team Report. In the report, the WVDEP affirmed the 150 micrograms PFOA per liter screening level for drinking water and a soil screening level of 240 parts per million. It further provided a screening level of 1 microgram per cubic meter for air, as based upon the inhalation reference concentration. DuPont is working with the WVDEP to address issues related to the implementation of and compliance with the air screening level. Unless DuPont violates its terms, the Order does not call for sanctions. DuPont has completed all major activities currently required by the Order and has spent approximately $3.2 million through June 30, 2003, in connection with these activities. As part of its agreement with the WVDEP, DuPont will continue to monitor public drinking water supplies in and around the Washington Works plant on a quarterly and/or annual basis. The scope and extent of this monitoring has y et to be determined. In addition, the company may perform other environmental monitoring as suggested by results received from studies performed under the Order.

Environmental sampling has also been conducted across the Ohio River pursuant to a Memorandum of Understanding (MOU) amongst DuPont, the Ohio EPA, the WVDEP, and the Division of Health and Human Resources. This sampling has disclosed PFOA levels in groundwater and drinking water in Ohio. Under the MOU, these results were shared with the Ohio EPA. Although the Order does not apply in Ohio, under the MOU, DuPont is funding investigations of ground and drinking water in that state comparable to the studies in West Virginia. In addition, DuPont signed a Safe Drinking Water Consent (SDWC) Order with the EPA Region III (which includes West Virginia) and Region V (which includes Ohio) in March of 2002 to assure provision of alternative drinking water if supplies are found to exceed screening levels established under the Order. Since PFOA concentrations in drinking water tested to date are significantly below the screening level that has been established under the SDWC Order, it is unlikely that DuPont will be required to provide alternative drinking water to anyone.

A class action was filed in West Virginia state court against DuPont and the Lubeck Public Service District. The action alleges that the class has or may suffer deleterious health effects from exposure to PFOA in drinking water and seeks medical monitoring. The class has been defined as anyone who has consumed drinking water contaminated by PFOA from operation of the Washington Works plant, which could be as large as fifty thousand individuals. The Lubeck Public Service District and plaintiffs recently reached a settlement agreement that has been approved by the court. DuPont does not believe that the consumption of drinking water with low levels of PFOA has caused or will cause deleterious health effects. On May 1, 2003, the court entered an order requiring that DuPont sample and analyze the blood for PFOA of the individual class members electing to participate. In addition, the court made certain findings of fact, including a finding that PFOA is toxic and hazardous to humans. It is the company's position that the scientific evidence does not support the court's finding. DuPont appealed the court's order and finding of fact to the West Virginia Supreme Court, which has agreed to hear the appeal. As a result, the company expects that the trial, originally scheduled for the third quarter of 2003, will be rescheduled. DuPont intends to defend itself vigorously. Since DuPont does not believe that its use of PFOA has caused or will cause any deleterious health affects, the company has not established a reserve related to the final outcome of the lawsuit.

While management recognizes that it is reasonably possible that losses may be incurred related to PFOA, a range of such losses cannot be reasonably estimated at this time.

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

The company is also subject to contingencies pursuant to environmental laws and regulations that in the future may require the company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the company or other parties. Additional information relating to environmental remediation activity is contained in Notes 1 and 23 to the company's consolidated financial statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2002. At June 30, 2003, reserves related to environmental remediation amounted to $375 and, in management's opinion, were appropriate based on existing facts and circumstances. Considerable uncertainty exists with respect to these costs and, under adverse changes in circumstances, potential liability may range up to two to three times the amount accrued at June 30, 2003.

The following sets forth the company's Total Comprehensive Income (Loss) for the periods shown:

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

The company's objectives and strategies for holding derivative instruments are included in Note 28 to the company's consolidated financial statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2002. During the three- and six-month periods ended June 30, 2003 and 2002, no hedge ineffectiveness was reported in earnings. There were no hedge gains or losses excluded from the assessment of hedge effectiveness or reclassifications to earnings for forecasted transactions that did not occur related to cash flow hedges. The table below summarizes the effect of cash flow hedges on accumulated other comprehensive income (loss) for the period:

Derivatives Not Designated in Hedging Relationships

In conjunction with the acquisition of the 23.88 percent minority interest in DuPont Canada Inc., the company entered into option contracts (see Note 15) to purchase 1.0 billion Canadian dollars for about $700. The business purpose of the contracts was to protect against adverse movements in the U.S. dollar/Canadian dollar exchange rate that would cause the net U.S. dollar cash purchase price to exceed the negotiated fair value of the business. The changes in fair values of these contracts were included in income in the period the change occurred. The contracts expired during the second quarter 2003 resulting in a pretax exchange gain of $30.

On April 17, 2003, DuPont commenced a tender offer to acquire the 66,704,465 shares of DuPont Canada Inc. not then owned by DuPont. These shares represented 23.88 percent of the outstanding shares of DuPont Canada Inc. Pursuant to the tender offer, DuPont acquired 47,141,872 shares of

23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(continued)

DuPont Canada Inc. on June 16, 2003 for approximately $767 and immediately commenced procedures that effectively converted the remaining 19,562,593 DuPont Canada Inc. shares not owned by DuPont to a cash obligation of Cdn $21.75 per share. As a controlled majority owned subsidiary, the results of operations of DuPont Canada Inc. were included in the consolidated financial statements of DuPont prior to the acquisition of the noncontrolling minority interest, and the outside stockholders' interests were shown as Minority Interests.

The acquisition of the noncontrolling interest in DuPont Canada Inc. is being accounted for using the purchase method. The estimated cost of acquisition for the 23.88 percent minority interest in DuPont Canada Inc. was $1,098, comprised of the $767 paid for the tendered shares, the estimated obligation of $318 for untendered shares, and $13 in estimated acquisition-related costs. A preliminary assignment of the estimated cost of acquisition, based on 23.88 percent of the estimated fair values of the assets and liabilities of DuPont Canada Inc., excluding goodwill but including intangible assets not previously recorded under generally accepted accounting principles (GAAP), is as follows: