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

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).

997,899,004 shares (excludes 87,041,427 shares of treasury stock) of common stock, $0.30 par value, were outstanding at July 31, 2004.

1

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, or to E. I. du Pont de Nemours and Company, as the context may indicate.

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Consolidated Income Statements (Note 1)
(Dollars in millions, except per share)

See pages 6-26 for Notes to Consolidated Financial Statements.

See pages 6-26 for Notes to Consolidated Financial Statements.

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5

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

Note 1. Summary of Significant Accounting Policies

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. 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, 2003. The consolidated financial statements include the accounts of the company and all of its subsidiaries in which a controlling interest is maintained, as well as variable interest entities in which DuPont is considered the primary be neficiary. Certain reclassifications of prior year's data have been made to conform to current year classifications.

The company currently has two equity affiliates identified as VIEs where DuPont is considered the primary beneficiary. One entity is DuPont Dow Elastomers LLC (DDE), which consists of assets of $1,194 and liabilities and non-controlling interest of $885. DDE was consolidated as a VIE in April 2004. The company has entered into a series of agreements by which DuPont has obtained complete control over directing DDE's response to synthetic rubber market antitrust investigations and litigation matters, and has also agreed to a disproportionate allocation of DDE's potential liabilities and costs with respect to the investigations and related litigation. Further detail is provided under the heading of "DuPont Dow Elastomers LLC" in Note 12.

The net assets of DDE as of June 30, 2004, consist of the following:

A second VIE is a real estate rental operation with assets and liabilities of $23 and $25, respectively. The company guaranteed a debt obligation of this entity, which totaled $23 at June 30, 2004.

As of March 31, 2004, the company was the primary beneficiary of an affiliate that provided manufacturing services. The company is no longer the primary beneficiary of this VIE as a result of the sale of substantially all of the net assets of the company's Textiles & Interiors segment (INVISTA) on April 30, 2004, (see Note 4). The company's equity interest in this VIE is approximately $13 and is included in Investment in affiliates. The company's maximum exposure to loss as a result of its involvement with this VIE is its equity investment and a guarantee of certain debt obligations of this entity, which totaled $177 at June 30, 2004.

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

The company has stock-based employee compensation plans which are described more fully in Note 26 to the company's consolidated financial statements included in the company's Annual Report on
Form 10-K for the year ended December 31, 2003. 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 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 for the three- and six-month periods ended June 30, 2004 and 2003, 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 and earnings per share as if the fair value based method had been applied in each period.

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

The company recorded total charges of $433 during the second quarter 2004. These charges include $312 related to cost reduction initiatives taken to align resources and adjust the company's infrastructure following the sale of INVISTA (see Note 4). The $312 consists of termination payments primarily in North America and Western Europe for approximately 2,700 employees involved in manufacturing, marketing and sales, administrative and technical activities, which reduced segment earnings as follows: Agriculture & Nutrition - $36; Coatings & Color Technologies - $64; Electronic & Communication Technologies - $42; Performance Materials - $45; Safety & Protection - $29; and Other - $96. Employee terminations will be completed by June 2005. As of June 30, 2004, cash payments related to these terminations were $13, and approximately 1,800 employees have been terminated. All payments are expected to be substantially complete by the end of 2005.

In addition, the company recorded a $23 charge in Performance Materials associated with the shutdown of certain U.S. manufacturing assets in connection with the company's exit from the dimethyl terephthalate (DMT) business. This charge covers the net book value of the DMT assets. The second quarter charge also included $27 in Electronic & Communication Technologies related to the write-down to estimated fair value of an investment, due to an other than temporary decline in its value.

During the second quarter, the company also recorded a $42 charge to reduce the carrying value of certain European manufacturing assets in the Safety & Protection segment to their estimated fair value. As a result of ongoing competitive pressures and a shift in the company's global sourcing of product during the second quarter 2004, the company determined that expected cash flows were not sufficient to recover the book value of these assets. Fair value of the assets was based on the assets' expected discounted cash flows. In addition, the company also recorded a charge of $29 in Other to write off the

8

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

net book value of certain patents and purchased technology. Due to changes in the associated manufacturing process and recently executed supply agreements, these abandoned assets were determined to be of no future value to the company.

During the second quarter 2004, 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 the company's Annual Report on Form 10-K for the year ended December 31, 2003, at Note 4, "Restructuring and Asset Impairment Charges."

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

During the second quarter 2004, the company completed the sale of INVISTA to subsidiaries of Koch Industries Inc. (Koch) for $3,844. Under the terms of the sales agreement, the purchase price is subject to adjustments for finalization of net working capital, transfer of pension assets and obligations, and settlement of income taxes. The company has recorded a receivable of approximately $87 for additional proceeds related to the finalization of net working capital. Koch and the company have not agreed on this amount and will continue to discuss the calculation of working capital and attempt to resolve any differences. The sales agreement contains a dispute resolution mechanism which will be used by the parties if necessary. Except for the transfer of the company's interest in certain equity affiliates, this transaction was completed on April 30, 2004. The transfer of these interests in equity affiliates will be delayed until the company receives approval from its equity partners. If the co mpany's interest in these equity affiliates were not to be transferred, this would reduce the final cash proceeds by $168, of which the company received $138 as an advance payment on April 30, 2004.

Also during the second quarter 2004, the company recorded a charge of $183 related to the divestiture of INVISTA. This charge included a loss on the sale of INVISTA of $118 and other separation charges of $65. The loss on the sale of INVISTA was the result of changes in the book value of the net assets sold at closing compared to the net book value of these assets at the end of the first quarter 2004. The other separation charges consisted predominately of incremental legal, accounting and other advisory and consulting fees, as well as other employee related separation costs. Year-to-date 2004 also reflects a first quarter charge of $345 related to the separation, including a $240 reduction of the sales price.

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

The net assets sold to Koch as of the date of the sale and included in the Consolidated Balance Sheet at December 31, 2003 consisted of the following:

As of December 31, 2003, the company recognized deferred tax assets in two European subsidiaries for their tax basis investment losses. During the second quarter 2004, the company recognized an additional tax benefit of $124 related to an increase in the deferred tax assets of these subsidiaries and $105 in other tax benefits associated with the separation of INVISTA.

On January 1, 2003, the company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations," which resulted in a charge of $46 ($29 after-tax) which has been reported as a cumulative effect of a change in accounting principle. This 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 company has recorded Asset Retirement Obligations primarily associated with closure, reclassification, and removal costs for mining operations related to the production of titanium dioxide in the Coatings & Color Technologies segment. The carrying amount of asset retirement obligations recorded by the company was $57 at June 30, 2004 and $62 at December 31, 2003.

10

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

The following average stock options are antidilutive, and therefore, are not included in the diluted earnings per share calculations:

11

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

Changes in goodwill for the period ended June 30, 2004 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 and by major class of other intangible assets are as follows:

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

On April 30, 2004, the company completed a $1,400 debt offering which consisted of $900, 4.125 percent notes due in 2010 and $500, 4.875 percent notes due in 2014. Concurrently, the company entered into interest rate swap agreements with notional amounts totaling $1,400. Over the remaining terms of the notes, the company will receive fixed payments equivalent to the underlying debt and pay floating payments based on U.S. dollar LIBOR.

The estimated fair value of the company's short-term borrowings, including interest rate financial instruments, based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, was $4,100 and $6,000 at June 30, 2004 and December 31, 2003, respectively. The change in estimated fair value from year-end is due to a decrease in short-term debt related to the use of proceeds from the April 30, 2004 debt offering and the sale of INVISTA.

The weighted-average interest rate on short-term borrowings outstanding at June 30, 2004 and December 31, 2003 was 2.4 percent and 2.0 percent, respectively.

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

Average interest rates on industrial development bonds were 3.2 percent and 5.8 percent for June 30, 2004 and December 31, 2003, respectively. The estimated fair value of the company's long-term borrowings, including interest rate financial instruments, based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities was $5,900 and $4,700 at June 30, 2004 and December 31, 2003, respectively. The change in estimated fair value in 2004 was primarily due to an increase in long-term debt related to the April 30, 2004 debt offering (see Note 10).

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

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 company's estimated product warranty liability as of June 30, 2004 is $30. 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, 2003 through June 30, 2004:

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. The term of these indemnifications, which typically pertain to environmental, tax and product liabilities, is generally indefinite. 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 related to litigation matters. 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 amounts recorded for all indemnifications as of June  30, 2004 and December 31, 2003 is $103 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.

In connection with the sale of INVISTA, the company indemnified Koch against certain liabilities primarily related to taxes, legal and environmental matters, and other representations and warranties. The estimated fair value of these obligations of $75 is included in the indemnifications balance of $103 at June 30, 2004. The fair value was based on management's best estimate of the value expected to be required to issue the indemnifications in a standalone, arm's length transaction with an unrelated party and, where appropriate, by the utilization of probability-weighted discounted net cash flow models.

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

The company has directly guaranteed various debt obligations under agreements with third parties related to equity affiliates, customers, suppliers and other unaffiliated companies. At June 30, 2004, the company had directly guaranteed $817 of such obligations, plus $222 relating to guarantees of certain obligations and liabilities of Conoco, Inc. and $25 related to guarantees of certain obligations and liabilities related to INVISTA, both discussed below. This represents the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees. The fair value of guarantees, related to obligations for equity affiliates and others, that have been issued or modified since the company's adoption of FASB Interpretation No. 45 on January 1, 2003 was not material.

Of the $817 directly guaranteed obligations, $63 is for short-term (less than one year) bank loans related to customers and suppliers, $25 is for long-term (1-7 years) bank loans related to customers and suppliers, $359 is for short-term (less than one year) bank borrowings related to equity affiliates, $231 is for long-term (1-8 years) bank borrowings related to equity affiliates, $103 is for historical obligations of a previously divested subsidiary (term 6 years), $27 is for revenue bonds (4-11 years), and $9 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. Assu ming liquidation, these assets are estimated to cover approximately 43 percent of the $91 of guaranteed obligations of customers. No material loss is anticipated by reason of such agreements and guarantees. At June 30, 2004, the liabilities recorded for these obligations were not material.

The company has historically guaranteed certain obligations and liabilities of Conoco, Inc., its subsidiaries and affiliates, which totaled $222 as of June 30, 2004. 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, 2004, the company had no liabilities recorded for these obligations.

The company has also guaranteed certain obligations and liabilities of $25 related to INVISTA entities sold to Koch as of April 30, 2004. Koch has indemnified the company for any liabilities the company may incur pursuant to these guarantees. No material loss is anticipated by reason of such agreements and guarantees. At June 30, 2004, the company had no liabilities recorded for these obligations.

As of June 30, 2004 the company had one synthetic lease program relating to short-lived equipment. In connection with this synthetic lease program, the company had residual value guarantees in the amount of $116 at June 30, 2004. 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, 2004, 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.

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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 94 cases pending against the company at June 30, 2004, 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. Four 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 one of the 21 cases alleging plant damage, a Florida jury found DuPont liable in August 2001 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. On May 26, 2004, the Third District Court of Appeal in Miami upheld dismissal of the racketeering verdict, reversed the $26 judgment, and sent the case back to the lower court for a new trial. Plaintiffs are expected to seek review by the Florida Supreme Court. The company has concluded that it is not probable that the adverse judgment entered at the trial level will ultimately be upheld; therefore, it has not established a reserve for this matter. A case tried in state court in Florida in 2001 involving alleged damage to orchids resulted in a jury verdict in favor of DuPont. In November 2003, the intermediate appellate court reversed the case and ordered a new trial. DuPont has moved for rehearing of that decision. The remaining crop cases are in various stages of development, principally in trial and appellate courts in Florida.

In the 41 reopener cases, the Florida federal court dismissed the 19 cases pending before it on July 26, 2004; plaintiffs may appeal. Five additional federal cases were dismissed voluntarily and are pending court approval. Eleven of the remaining reopener cases are in various stages of development in trial and appellate courts in Florida. In February 2004, the federal district court in Hawaii dismissed the five reopener cases pending before it. The plaintiffs have filed a notice of appeal to the Ninth Circuit Court of Appeals. The remaining case is pending in state court in Hawaii.

18

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

In the four cases involving allegations that BenlateÒ caused birth defects to children exposed in utero, the federal court in West Virginia dismissed the case pending before it on the grounds of insufficient scientific support for causation. On January 27, 2004, the Fourth Circuit Court of Appeals affirmed the dismissal. Plaintiffs are seeking review by the U.S. Supreme Court. The remaining three cases are pending in Delaware. In one of these cases, 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 case is scheduled for trial in October 2004. The remaining two cases will be scheduled for trial after the conclusion of the October 2004 trial.

The 28 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. DuPont contends that the injuries alleged are attributable to a virus, Taura Syndrome Virus, and in no way involve BenlateÒ  OD. One case was tried in the fall of 2000 and another in early 2001. Both trials resulted in adverse judgments of approximately $14 each. The company appealed the judgments in both cases. On September 17, 2003, the intermediate appellate court reversed the adverse verdict against DuPont in the first case and the plaintiffs sought review of this ruling by the Florida Supreme Court. On February 11, 2004, the Florida Supreme Court declined to review the matter. The company has sought entry of judgment in its favor from the trial court. On March 31, 2004, the intermediate appellate court reversed the verdict in the second case and ordered judgment entered for DuPont. The plaintiffs are expected to seek review by the Florida Supreme Court. An accrual has not been established for either case because the company has concluded that it is not probable that the adverse judgments at the trial level ultimately will be upheld. The 26 untried cases are on hold pending the resolution of the appeal of the case tried early in 2001.

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, 2004, DuPont has incurred costs and expenses of approximately $1,900 associated with these matters. The company has recovered approximately $250 of its costs and expenses 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.

For purposes of this report, the term PFOA means collectively perfluorooctanoic acid and its salts, including the ammonium salt, and does not distinguish between the two forms. DuPont uses PFOA as a processing aid to manufacture fluoropolymer resins and dispersions at various sites around the world, including its Washington Works plant in West Virginia. 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 is evidence indicating that telomer chemistry can form small trace amounts of PFOA.

19

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

On April 14, 2003, the United States Environmental Protection Agency (EPA) issued a preliminary risk assessment on PFOA. It 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 there remains considerable scientific uncertainty regarding potential risks associated with PFOA. However, the EPA has said that 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 to identify what voluntary or regulatory mitigation or other actions, if any, might be appropriate. In addition, the EPA 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 the pathways by which human exposure to PFOA is occurring. 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 expects that this process will continue well into 2004.

Based on over fifty years of industry experience and extensive scientific study, DuPont believes there is no evidence that PFOA causes any adverse human health effects or harm to the environment. However, DuPont respects the EPA's position raising questions about exposure routes and the potential toxicity of PFOA and is undertaking voluntary programs concerning PFOA and fluorinated telomers. DuPont, as well as other companies, have outlined plans for continued research, emission reduction activities, and product stewardship activities to help address the EPA's questions.

In early July 2004, the EPA filed an administrative complaint against DuPont alleging that the company failed to comply with the technical reporting requirements of the Toxic Tort Substances Control Act (TSCA) and the Resource Conservation and Recovery Act (RCRA) regarding PFOA. The allegations relate to information about PFOA for a period beginning in June 1981 through March 2001. The complaint references the penalty provisions under the two federal laws, but it does not seek a specific penalty against DuPont at this time. It is clear that the EPA's allegations are about administrative reporting and not about the safety of PFOA or products that use PFOA in their manufacture. Furthermore, the company believes that it has complied with such reporting requirements and intends to vigorously defend its position. DuPont intends to file a formal denial to the Agency's complaint.

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. In addition, the class seeks diminution of property values, and punitive damages plus injunctive relief to stop releases of PFOA. The class, which could be as large as fifty thousand individuals, has been defined as anyone who has consumed drinking water containing quantifiable levels (0.05 parts per billion) of PFOA. The Lubeck Public Service District and plaintiffs reached a settlement agreement that has been approved by the court. DuPont does not believe that consumption of drinking water with low levels of PFOA has caused or will cause deleterious health effects. September 20, 2004 has been set as the trial date for this action and DuPont intends to defend itself vigorously in this matter. While DuPont does not believe that its use of P FOA has caused or will cause any deleterious health effects, management recognizes that losses related to PFOA may be incurred and a reserve of $45 has been established.

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

20

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

Authorities in the United States, the European Union and Canada are investigating the synthetic rubber markets for possible criminal antitrust violations, which may include price fixing. DuPont Dow Elastomers LLC (DDE), a 50/50 joint venture between DuPont and The Dow Chemical Company, has been subpoenaed in connection with the investigations. Related civil litigation has been filed against DDE and others, including DuPont.

DuPont and Dow have concluded that it is in the best interest of all parties involved to consolidate control over directing DDE's response to these investigations and the related litigation. Consequently, in April 2004, DuPont and Dow entered into a series of agreements that are described below. As a result of these agreements, DuPont has obtained complete control over directing DDE's response to these investigations and the related litigation.

DuPont and Dow have agreed to allocate disproportionately DDE's potential liabilities and costs (including fines, settlements, judgments, penalties and defense costs) with respect to the investigations and related litigation. As a result, DuPont will bear any potential liabilities and costs up to the initial $150. Dow is obligated to contribute up to $72.5 by making contributions of 15 percent to 30 percent toward potential liabilities and costs that exceed $150, if any.

In addition, DuPont and Dow have agreed to enter into definitive agreements that give Dow the option to acquire certain assets relating to ethylene and chlorinated elastomers from DDE in a non-cash equity redemption. If Dow elects to exercise its option, then DuPont will purchase Dow's remaining equity interest, if any, in DDE immediately after Dow acquires the assets from DDE. As a result, DDE would become a wholly owned subsidiary of DuPont. The purchase price for each of these transactions will be determined at a later date based on fair market values subject to an agreed collar. Dow has until December 31, 2004 to exercise its option, but the parties have agreed that the closing of these transactions will not occur prior to June 30, 2005, should Dow exercise its option.

Consequently, DuPont's allocation of any potential liabilities and costs associated with these matters is greater than its fifty percent share in the venture. In addition, DuPont has agreed to make capital contributions to DDE in an amount equal to DuPont's allocated share of any such liabilities and costs. DuPont's obligation to make capital contributions is not limited. Dow's obligation to make capital contributions to DDE for Dow's allocated share of any potential liabilities and costs associated with these matters has been capped at $72.5. Furthermore, DuPont has agreed to loan Dow the money with which to make such capital contributions to DDE. The loan, if made, would be without recourse to Dow and secured solely by Dow's ownership interest in DDE. The price to be paid by DuPont to Dow in exchange for Dow's ownership interest in DDE will be reduced by the amount of any such loans.

As a result of the agreements between Dow and DuPont, a reserve of $150 was established in the first quarter 2004. DuPont believes this represents the best estimate of the probable liability based on the current status of these investigations and the related facts and circumstances. Given the uncertainties inherent in predicting the outcome of these investigations and the related litigation, and in projecting future costs, it is possible that actual losses will exceed the amount accrued. However, 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)

DDE entered into a settlement of federal class action antitrust litigation related to polychloroprene for $42 including attorneys' fees and costs, which was preliminarily approved on June 24, 2004. In accordance with the agreements described above between Dow and DuPont, DuPont is responsible for providing DDE with the funding for this settlement.

Class actions were filed against DuPont and four other manufacturers of automotive refinishes in 2001 for civil damages arising out of an alleged conspiracy to fix prices. The majority of these lawsuits were consolidated in the federal district court of Philadelphia, Pennsylvania. In the first quarter 2004, DuPont reached an agreement to settle these lawsuits for $36, which has been paid out as of June 30, 2004. DuPont will continue to vigorously defend nine related cases pending in a California state court. No reserve has been established for these nine cases because the company does not believe it is probable that a liability has been incurred.

The company is subject to various other lawsuits and claims arising out of the normal course of its business. 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.

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 24 to the company's consolidated financial statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2003. At June 30, 2004, the company's Consolidated Balance Sheet includes a liability of $379 relating to these matters and, in management's opinion, is 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, 2004.

22

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

Due to the sale of INVISTA on April 30, 2004 (see Note 4), the company is required to calculate its minimum pension liability using plan assets and liabilities as of April 30, 2004. The remeasurement resulted in a $157 reduction to this liability, primarily due to the transfer of benefit obligations and assets to Koch.