United States Securities and Exchange Commission
Washington, DC 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended December 31, 2009 |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 001-00815
DuPont Retirement Savings Plan
(Full title of plan)
E. I. du Pont de Nemours and Company
1007 Market Street
Wilmington, Delaware 19898
(Name and Address of Principal Executive Office of Issuer)
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, E. I. du Pont de Nemours and Company has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
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DuPont Retirement Savings Plan |
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Dated: June 29, 2010 |
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/s/ Robert Slone |
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Robert Slone |
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Director of Global Rewards, |
DuPont Retirement Savings Plan
Index to Financial Statements and Supplemental Schedule
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Page(s) |
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1 |
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Financial Statements: |
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Statements of Net Assets Available for Benefits as of December 31, 2009 and December 31, 2008 |
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3 |
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4 21 |
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Schedule of Assets (Held at End of Year) as of December 31, 2009 |
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* Other supplemental schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
DuPont Retirement Savings 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 DuPont Retirement Savings Plan (the Plan) at December 31, 2009 and 2008, 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 Plans management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plans 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 LLP
Philadelphia, Pennsylvania
June 29, 2010
DuPont Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2009 and 2008
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2009 |
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2008 |
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Assets |
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Investments at fair value: |
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Plan interest in DuPont and Related Companies Defined Contribution Plan Master Trust |
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$ |
7,880,469,020 |
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$ |
6,817,688,427 |
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Participant-directed Brokerage Account |
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95,909,689 |
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44,912,224 |
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Company stocks |
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614,393,004 |
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465,410,098 |
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Mutual funds |
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267,359,396 |
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Participant loans |
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81,407,079 |
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83,268,206 |
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Total investments at fair value |
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8,672,178,792 |
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7,678,638,351 |
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Receivables: |
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Accrued interest |
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1,058 |
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Participants contributions |
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8,158,922 |
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9,791,788 |
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Employers contributions |
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11,269,645 |
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12,080,877 |
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Total receivables |
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19,429,625 |
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21,872,665 |
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Cash |
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4,952,846 |
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30,644,147 |
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Total assets |
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8,696,561,263 |
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7,731,155,163 |
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Liabilities |
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Accounts payable |
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56,300 |
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89,800 |
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Net assets available for benefits, at fair value |
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8,696,504,963 |
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7,731,065,363 |
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Adjustment from fair value to contract value for interest in Master Trust relating to fully benefit-responsive investment contracts |
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(110,947,176 |
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88,185,424 |
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Net assets available for benefits |
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$ |
8,585,557,787 |
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$ |
7,819,250,787 |
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The accompanying notes are an integral part of these financial statements.
DuPont Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2009 and 2008
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2009 |
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2008 |
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Additions: |
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Investment income: |
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Net investment gain from interest in DuPont and Related Companies Defined Contribution Plan Master Trust |
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$ |
763,565,476 |
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$ |
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Net appreciation in fair value of investments |
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165,821,199 |
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Interest |
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6,082,845 |
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6,081,113 |
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Dividends |
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30,923,590 |
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45,164,335 |
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Other |
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1,584,280 |
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Total investment income |
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967,977,390 |
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51,245,448 |
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Contributions: |
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Employers contributions |
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190,827,384 |
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182,388,642 |
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Participants contributions |
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210,267,520 |
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208,244,937 |
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Rollovers |
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1,676,806 |
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1,633,467 |
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Total contributions |
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402,771,710 |
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392,267,046 |
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Total additions |
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1,370,749,100 |
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443,512,494 |
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Deductions: |
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Net investment loss from interest in DuPont and Related Companies Defined Contribution Plan Master Trust |
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489,857,645 |
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Net depreciation in fair value of investments |
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784,511,265 |
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Benefits paid to participants |
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601,713,147 |
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961,350,163 |
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Distribution of dividends |
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1,410,046 |
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1,334,649 |
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Administrative expenses (net) |
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1,088,809 |
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2,128,041 |
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Total deductions |
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604,212,002 |
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2,239,181,763 |
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Asset transfers in |
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86,968 |
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54,690,740 |
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Asset transfers out |
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(317,066 |
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(3,198,709 |
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Net increase (decrease) |
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766,307,000 |
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(1,744,177,238 |
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Net assets available for benefits: |
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Beginning of period |
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7,819,250,787 |
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9,563,428,025 |
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End of period |
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$ |
8,585,557,787 |
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$ |
7,819,250,787 |
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The accompanying notes are an integral part of these financial statements.
DuPont Retirement Savings Plan
December 31, 2009 and 2008
NOTE 1 DESCRIPTION OF THE PLAN
The following description of the DuPont Retirement Savings Plan (the Plan or RSP), formerly Savings and Investment Plan of E. I. du Pont de Nemours and Company (SIP), provides only general information. Participants should refer to the Plan document for a more comprehensive description of the Plans provisions.
General
The Plan is a defined contribution plan established by the Board of Directors of E. I. du Pont de Nemours and Company (DuPont or the Company) effective September 1, 1955. The Plan is a tax qualified contributory profit sharing Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. The purpose of the Plan is to encourage and assist employees in following a systematic savings program suited to their individual financial objectives, and to provide an opportunity for employees to become stockholders of the Company.
Effective January 1, 2008, the Company made several changes to the Plan, including a new definition for eligible compensation, modifications to contributions and loan provisions, new investment choices, and a new Master Trust Agreement. These changes are explained in more detail in each respective section below.
Effective at close of day December 31, 2008, the assets of the DuPont Retirement Savings Plan (DuPont RSP), and ChemFirst Inc. 401(k) Plan (ChemFirst Plan) were merged into the Plan. At the time of the merger, participants of the DuPont RSP and ChemFirst Plan became part of the SIP. Also, effective December 31, 2008, DuPont Displays, Inc. (DuPont Displays), and DuPont Authentication, Inc. (DuPont Authentication), adopted the Plan for its employees. Prior to the December 31, 2008, DuPont Displays and DuPont Authentication employees were part of the DuPont 401(k) and Profit Sharing Plan (DuPont 401(k)). As part of the change, DuPont Displays and DuPont Authentication participant investments in the DuPont 401(k) were transferred to the Plan.
Effective January 1, 2009, the Plan name was changed to DuPont Retirement Savings Plan.
Administration
The Plan Administrator is the Benefit Plan Administrative Committee, whose members are appointed by the Company. The Savings Plan Investment Committee (the Committee), whose members are also appointed by the Company has responsibility for selecting and overseeing the plan investments. The Company holds authority to appoint trustees and has designated Bank of America, N.A. (Bank of America), formerly Merrill Lynch Trust Company of America (Merrill Lynch), and Northern Trust Corporation (Northern Trust) as trustees for the Plan. Bank of America also provides recordkeeping and participant services.
Effective January 28, 2008, the Plan entered into a Master Trust Agreement with Northern Trust to establish a new DuPont and Related Companies Defined Contribution Plan Master Trust (Master Trust), which replaced the Master Trust held under Merrill Lynch. The objective of the new Master Trust is to allow participants from affiliated plans to invest in several custom designed investment choices through separately managed accounts. DuPont Capital Management Corporation (DCMC), a registered investment adviser and wholly-owned subsidiary of DuPont, has responsibility to oversee the investments managers and evaluate funds performances under the Master Trust, except for the Master Trust Stable Value Fund (Stable Value Fund), which is managed by DCMC.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
Effective January 28, 2008, the Plans investment elections offered prior to 2008, with the exception of the Company Stocks and the Stable Value Fund, were closed to new contributions. Participants were allowed to hold balances in some of the closed funds until April 2009, or transfer out some or all of the balances at any time, but were not permitted to invest additional contributions or request a fund transfer into these funds.
In January 2008 when the new investment choices became available, the following funds were liquidated and re-invested into similar predetermined investment funds in the Master Trust:
· Blackrock Balanced Capital Fund Class I
· MFS Total Return Fund Class A
· Barclays 3-Way Asset Allocation Fund
· Bank of America (formerly Merrill Lynch) Small Capital Index CT Tier 2
· Bank of America (formerly Merrill Lynch) Equity Index TR Tier 6
· Bank of America (formerly Merrill Lynch) International Index CT Tier 2
Participants who held closed funds until April 2009 were liquidated and re-invested into similar predetermined funds in the Master Trust.
The ConocoPhillips Stock was closed to new investments by Plan participants during previous years. Plan participants may not invest additional contributions or request a fund transfer into this fund. However, they may transfer out of the fund at any time.
Bank of America remained as the trustee for the balances in the closed funds, the Company stocks, and a new participant-directed brokerage account.
Eligibility
All employees of the Company or the Companys subsidiaries and general partnerships that have adopted the Plan are eligible to participate in this Plan, except represented employees in a bargaining unit that has not accepted the terms of this Plan and individuals who are classified by the Company as leased employees and independent contractors. Individuals who are receiving severance pay, retainer, or other fees under contract are not eligible to participate in the Plan.
Contributions
Eligible employees may participate in the Plan by authorizing the Company to make payroll deductions (participant savings). Participants may elect to make before-tax or after-tax contributions of 1% to 90% of eligible compensation, as defined. Effective January 1, 2008, participants are automatically enrolled in the Plan at a 3% before-tax savings rate, if no action is taken by the employee within 60 days from the date of hire. Under the automatic enrollment the participant assets are invested in accordance with a managed account feature offered by Bank of America, and before-tax contributions are increased 1% annually, up to a maximum of 6% of pay. The participant may elect not to participate in the plan at any time. All of the above participants savings and elections are subject to regulatory and Plan limitations.
Beginning January 1, 2008, the Company makes a matching contribution equal to 100% of a participants savings, up to 6% of eligible compensation. In addition, the Company makes a contribution (Retirement Savings Contribution) to each eligible employee account each month, equal to 3% of eligible pay, regardless of the employees contribution election.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
Participants direct the investment of the contributions into various investment options offered by the Plan. The Plan currently offers 5 passively managed index funds, 7 actively managed custom-designed funds, 12 target retirement funds, a Company Stock, and a self-directed brokerage account where participants can choose from approximately 1,300 funds from 70 mutual funds families. The Plan also contains an Employee Stock Ownership Plan (ESOP) where participants can elect to have dividends from the DuPont company stock paid out to them in cash instead of being reinvested in their Plan account. For the years ended December 31, 2009 and 2008, $1,410,046 and $1,334,649 in dividends were paid to participants in cash, respectively.
Vesting
Participant contributions and Companys matching contributions are fully and immediately vested. Retirement Savings Contributions are fully vested after any of the following circumstances:
· The participant has completed at least 3 years of service with the Company;
· The participant reaches age 65 while working for the Company;
· The participant terminates employment with the Company due to becoming totally disabled while working for the Company;
· The participants job with the Company is eliminated;
· The participants spouse is transferred by the Company to an employment location outside the immediate geographic area while the participant is working for the Company, and the participant terminates employment with the Company;
· The participant dies while actively employed by the Company.
Participant balances related to company contributions transferred from the ChemFirst Plan, and profit sharing contributions transferred from the DuPont 401(k) Plan that were not vested at the time of the merger in 2008 will continue to vest according to the previous plans vesting schedules.
Participant Accounts
The Plans record-keeper maintains an account in the name of each participant to which each participants contributions, Companys matching contributions, Retirement Savings Contributions, and allocations of Plan net earnings, losses and expenses, if any, are recorded. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account.
Payment of Benefits
Participants may request a full distribution of their accounts when they terminate employment with the Company and all affiliates. However, the Retirement Savings Contributions will be paid only to the extent that they are vested in the employees account. On separation from service, a participant also may elect to receive the value of their account balance in installment payments. Required minimum distributions will begin in April of the calendar year following the later of the year in which the participant attains age 70½ or the year following retirement or termination of employment.
Participant Loans
Participants may borrow up to one-half of their non-forfeitable account balances subject to a $1,000 minimum and required regulatory loan maximum limitations. The loans are executed by promissory notes and have a minimum term of 1 year and a maximum term of 5 years, except for qualified residential loans, which have a maximum term of 10 years. The rate of interest on loans are commensurate with the prevailing interest rate charged on similar loans made within the same locale and time period and remain fixed for the life of the loan. The loans are repaid over the term in installments of principal and interest by
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
deduction from pay or pension checks or through ACH account debit. A participant also has the right to repay the loan in full, at any time, without penalty. At December 31, 2009, loan interest rates ranged from 4.00% to 10.00%.
Forfeited Accounts
At December 31, 2009 and 2008 forfeited non-vested accounts totaled $272,656 and $98, respectively. These accounts will be used to reduce future Company contributions or to pay administrative expenses. For the years ended December 31, 2009 and 2008, the Plan used $91,198 and $322,411 from forfeited non-vested accounts to pay for administrative expenses.
Administrative Expenses
Administrative expenses, including but not limited to, recordkeeping expenses, trustee fees and transactional costs may be paid by the Plan, at the election of the Plan Administrator. Expenses paid by the Plan for the years ended December 31, 2009 and 2008 were $1,088,809 and $2,128,041, respectively, net of fee reimbursements. Prior to the change to the current structure for participant investments which occurred in 2008, Fidelity Investments reimbursed the Plan for certain expenses associated with administering some of the Plans investments. For the year ended December 31, 2008, the total fee reimbursements to the Plan amounted to $770,561. Brokerage fees, transfer taxes, investment fees and other expenses incidental to the purchase and sale of securities and investments shall be included in the cost of such securities or investments, or deducted from the sales proceeds, as the case may be.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (GAAP).
Investment Valuation and Income Recognition
The Plans investments are stated at fair value. Shares of registered investment companies (mutual funds) are valued at the net asset value of shares held by the Plan at year-end. Company stocks are valued at year-end market price of the common stocks. Participant loans are valued at their outstanding balances, which approximate fair value. Shares of common collective trusts (CCTs) valued at net asset value as reported by the CCTs trustee at year-end.
As described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 962, Plan Accounting - Defined Contribution Pension Plans (formerly known as FASB Staff Position (FSP) AAG INV-1 and Statement of Position 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans), investment contracts held by a defined contribution plan are required to be reported at fair value. This applies even when the contracts are not held directly by the Plan but are underlying assets in the Master Trust investments held by the Plan. However, contract value is the relevant measurement of net assets available for benefits in a defined contribution plan that holds fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. As required by ASC 962, the Plans interest in the Master Trust related to fully benefit-responsive contracts are stated at fair value with an adjustment to contract value in the Statement of Net Assets Available for Benefits. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
Purchases and sales of investments are recorded on a trade-date basis. Realized gains and losses on the sale of company stocks are based on average cost of the securities sold. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the financial statements and accompanying notes. Actual results could differ from those estimates.
Payment of Benefits
Benefits are recorded when paid.
New Accounting Standards Adopted
The accounting standards initially adopted in the 2009 financial statements described below affected certain note disclosures but did not impact the statements of net assets available for benefits or the statement of changes of net assets available for benefits.
Accounting Standards Codification
The FASB ASC became effective on July 1, 2009. At that date, the ASC became FASBs official source of authoritative GAAP applicable to all public and nonpublic nongovernmental entities, superseding existing guidance issued by the FASB, the American Institute of Certified Public Accountants (AICPA), the Emerging Issues Task Force and other related literature. The FASB also issues Accounting Standards Updates (ASU). An ASU communicates amendments to the ASC. An ASU also provides information to help a user of GAAP understand how and why GAAP is changing and when the changes will be effective.
Subsequent Events
In May 2009, the FASB issued ASC 855 (originally issued as FASB Statement No. 165, Subsequent Events) to establish general standards of accounting for and disclosing events that occur after the balance sheet date, but prior to the issuance of financial statements. ASC 855 provides guidance on when financial statements should be adjusted for subsequent events and requires companies to disclose subsequent events through the date the financial statements are issued. ASC 855 is effective for periods ending after June 15, 2009. The Plans management has evaluated subsequent events through June 29, 2010, the date on which the financials statements were issued.
Updates to Fair Value Measurements and Disclosures
In April 2009, FSP 157-4, Disclosures Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, was issued and later codified into ASC 820, which expanded disclosures and required that major categories for debt and equity securities in the fair value hierarchy table be determined on the basis of the nature and risks of the investments. This guidance was effective for interim and annual reporting periods ending after June 15, 2009.
In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosures: Investments in Certain Entities That Calculate Net Asset per Share (or Its Equivalent) (ASU No. 2009-12), which amended ASC Subtopic 820-10, Fair Value Measurements and Disclosures - Overall. ASU No. 2009-12 is effective for the first reporting period ending after December 15, 2009. ASU No. 2009-12 expands the required disclosures for certain investments with a reported net asset value. ASU No. 2009-
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
12 permits, as a practical expedient, an entity holding investments in certain entities that calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that net asset value per share or its equivalent without adjustment. The ASU requires enhanced disclosures about the nature and risks of investments within its scope. Such disclosures include the nature of any restrictions on an investors ability to redeem its investments at the measurement date, any unfunded commitments, and the investment strategies of the investee. The Plan has adopted ASU No. 2009-12 on a prospective basis for the year ended December 31, 2009. The effect of the adoption of the ASU had no impact on the statements of net assets available for benefits and statement of changes in net assets available for benefits.
Derivatives and Hedging
ASC 815 (originally issued as FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133) was issued in March 2008, and is effective for fiscal years beginning after November 15, 2008. ASC 815 expands the required disclosures about an entitys derivative instruments and hedging activities. The Plan has adopted ASC 815 on a prospective basis for the year ended December 31, 2009. The effect of the adoption of the ASC 815 had no impact on the statements of net assets available for benefits and statement of changes in net assets available for benefits.
New Accounting Standards to Be Adopted
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASU No. 2010-06), which amends ASC 820 (originally issued as FASB Statement No. 157, Fair Value Measurements), adding new disclosure requirements for Levels 1 and 2, separate disclosures of purchases, sales, issuances, and settlements relating to Level 3 measurements and clarification of existing fair value disclosures. ASU No. 2010-06 is effective for periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010. The Plan is currently evaluating the impact ASU No. 2010-06 will have on the financial statements.
NOTE 3 INVESTMENTS
Investments that represent 5% or more of the net assets available for benefits as of December 31, 2009 and 2008, consist of the Plans interest in the Master Trust and investment in DuPont company stocks.
For the years ended December 31, 2009 and 2008, the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value, as follows:
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2009 |
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2008 |
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Company stocks |
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$ |
148,998,431 |
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$ |
(323,028,554 |
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Mutual funds |
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(684,594 |
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(390,534,193 |
) |
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Participant-directed brokerage account |
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17,507,362 |
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(17,235,160 |
) |
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Common/collective trust funds |
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(53,713,358 |
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Net appreciation (depreciation) in fair value of investments |
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$ |
165,821,199 |
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$ |
(784,511,265 |
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For the year ended December 31, 2009, the Plan net investment gain from interest in the Master Trust amounted to $763,565,476. For the year ended December 31, 2008, the Plan net investment loss from interest in the Master Trust amounted to $489,857,645.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
NOTE 4 INTEREST IN MASTER TRUST
As previously described, effective January 28, 2008 the Plan entered into a Master Trust Agreement with Northern Trust to establish a new Master Trust. This Master Trust contains several actively managed investments pools, and commingled index funds offered to participants as core investment options and age-targeted options. The investment pools are administered by different investment managers through separately managed accounts at Northern Trust.
The Master Trust held at Merrill Lynch in 2007 contained a Stable Value Fund and three different Asset Allocation Funds: the Conservative, Moderate, and Aggressive Asset Allocation Funds. The Stable Value Funds investments were transferred to the Northern Trust Master Trust on January 28, 2008. The Asset Allocation Funds were liquidated and reinvested in the Northern Trust Master Trust as part of the transition to the new investment options offered by the Plan.
At December 31, 2009, the Master Trust includes the assets of the following plans:
· DuPont Retirement Savings Plan
· DuPont 401(k) and Profit Sharing Plan
· Thrift and Savings Plan for Employees of Sentinel Transportation, LLC
To participate in the Master Trust, affiliates who sponsor qualified savings plans and who have adopted the Master Trust Agreement are required to make payments to the Trustee of designated portions of employees savings and other contributions by the affiliate. Investment income relating to the Master Trust is allocated proportionately by investment fund to the plans within the Master Trust based on each plans interest to the total fair value of the Master Trust investment funds. The Plans undivided interest in the Master Trust was 99.33% and 99.53% as of December 31, 2009 and 2008, respectively.
Master
Trust Investments
The investments of the Master Trust are reported at fair value. Purchases and
sales of the investments within the Master Trust are reflected on a trade-date
basis. Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
Cash and short-term investments include cash and short-term interest-bearing investments with initial maturities of three months or less. Such amounts are recorded at cost, plus accrued interest, which approximates fair value.
Mutual funds are valued at the net asset value of shares held by the Master Trust at year-end. Units held in CCTs are valued at the net asset value as reported by the CCTs trustee at year-end.
Common stock, preferred stock, fixed income securities, options and futures traded in active markets on national and international securities exchanges are valued at closing prices on the last business day of each period presented. Securities traded in markets that are not considered active are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Securities that trade infrequently and therefore have little or no price transparency are valued using the trustees or investment managers best estimates.
Forward foreign currency contracts are valued at fair value, as determined by the trustees (or independent third parties on behalf of the Master Trust), using quoted forward foreign currency exchange rates. At the end of each period presented, open contracts are valued at the current forward foreign currency exchange
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
rates, and the change in market value is recorded as an unrealized gain or loss. When the contract is closed or delivery taken, the Master Trust records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
Swap contracts are valued at fair value, as determined by the trustees (or independent third parties on behalf of the Master Trust) utilizing pricing models and taking into consideration exchange quotations on underlying instruments, dealer quotations and other market information.
Investments denominated in currencies other than the U.S. dollar are converted using exchange rates prevailing at the end of the periods presented. Purchases and sales of such investments are translated at the rate of exchange on the respective dates of such transactions.
As provided by ASC 962, an investment contract is generally required to be reported at fair value, rather than contract value, to the extent it is fully benefit-responsive. The fair value of the guaranteed investment contracts (GICs) is calculated by discounting the related cash flows based on current yields of similar instruments with comparable durations. The fair value of synthetic GICs is determined using the market price of the underlying securities and the fair value of the investment contract (wrapper). The fair value of the wrapper is determined by taking the difference between the actual wrap fee of the contract and the price at which the wrapper would issue an identical contract under current market conditions. That change in fees is applied to the year-end book value of the contract to determine the wrapper contracts fair value.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
The following presents the Master Trusts net assets at December 31, 2009 and 2008:
|
|
2009 |
|
2008 |
|
||
Assets |
|
|
|
|
|
||
Investments, at fair value |
|
|
|
|
|
||
Common stocks |
|
$ |
1,069,544,763 |
|
$ |
671,342,429 |
|
Preferred stocks |
|
5,662,597 |
|
1,885,459 |
|
||
Fixed income securities |
|
28,258,005 |
|
25,532,985 |
|
||
Mutual funds |
|
110,849,115 |
|
74,024,212 |
|
||
Common collective trusts |
|
1,217,694,419 |
|
771,047,331 |
|
||
Investment contracts |
|
5,492,836,673 |
|
5,302,911,435 |
|
||
Cash and short term investments |
|
18,740,468 |
|
14,935,899 |
|
||
Total investments |
|
7,943,586,040 |
|
6,861,679,750 |
|
||
|
|
|
|
|
|
||
Cash |
|
55,938 |
|
100,393 |
|
||
Receivables for securities sold |
|
3,653,373 |
|
779,964 |
|
||
Unrealized appreciation on foreign exchange contracts |
|
246,716 |
|
1,241,407 |
|
||
Accrued income |
|
1,305,186 |
|
1,389,690 |
|
||
Other assets |
|
|
|
10,828 |
|
||
Total assets |
|
7,948,847,253 |
|
6,865,202,032 |
|
||
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
||
Payables for securities purchased |
|
9,198,251 |
|
11,803,899 |
|
||
Accrued expenses |
|
4,620,603 |
|
2,989,973 |
|
||
Other liabilities |
|
28,955 |
|
354,181 |
|
||
Total liabilities |
|
13,847,809 |
|
15,148,053 |
|
||
|
|
|
|
|
|
||
Master Trust net assets, at fair value |
|
7,934,999,444 |
|
6,850,053,979 |
|
||
|
|
|
|
|
|
||
Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
|
(111,699,787 |
) |
88,536,686 |
|
||
|
|
|
|
|
|
||
Master Trust net assets |
|
$ |
7,823,299,657 |
|
$ |
6,938,590,665 |
|
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
The following presents net investment gain (loss) for the Master Trust for the years ended December 31, 2009 and 2008:
|
|
2009 |
|
2008 |
|
||
|
|
|
|
|
|
||
Change in net appreciation (depreciation) in fair value of investments: |
|
|
|
|
|
||
Investments, at market value |
|
|
|
|
|
||
Common stocks |
|
$ |
218,419,380 |
|
$ |
(454,080,361 |
) |
Preferred stocks |
|
2,416,906 |
|
(606,243 |
) |
||
Mutual funds |
|
28,179,483 |
|
(36,987,497 |
) |
||
Fixed income securities |
|
4,325,901 |
|
(2,411,350 |
) |
||
Common collective trusts |
|
300,209,972 |
|
(295,708,830 |
) |
||
Investment contracts |
|
800,809 |
|
|
|
||
Other |
|
56,614 |
|
19,657 |
|
||
Net foreign currency exchange losses |
|
(339,182 |
) |
(1,660,366 |
) |
||
Net depreciation on swap agreements |
|
10,878 |
|
(68,412 |
) |
||
Net appreciation on foreign exchange contracts |
|
(2,295,539 |
) |
2,001,809 |
|
||
Net appreciation on futures contracts |
|
(59,035 |
) |
876,102 |
|
||
Net increase (decrease) from investments |
|
551,726,187 |
|
(788,625,491 |
) |
||
|
|
|
|
|
|
||
Investment income (expense): |
|
|
|
|
|
||
Interest |
|
215,921,464 |
|
283,913,122 |
|
||
Dividends |
|
14,815,404 |
|
18,144,929 |
|
||
Administrative expenses |
|
(11,511,874 |
) |
(7,859,207 |
) |
||
Net investment gain (loss) |
|
$ |
770,951,181 |
|
$ |
(494,426,647 |
) |
Investments of the Master Trust that represent 5% or more of the Master Trust assets as of December 31, 2009 and 2008 were as follows:
|
|
2009 |
|
2008 |
|
||
|
|
|
|
|
|
||
Underlying Assets of Synthetic GICs |
|
|
|
|
|
||
GEM Trust Short Duration |
|
$ |
619,605,204 |
|
$ |
648,401,561 |
|
GEM Trust Risk-Controlled 1 |
|
682,195,256 |
|
637,726,645 |
|
||
GEM Trust Risk-Controlled 2 |
|
697,484,554 |
|
619,754,004 |
|
||
GEM Trust Opportunistic 1 |
|
546,691,462 |
|
495,476,947 |
|
||
GEM Trust Opportunistic 2 |
|
719,260,547 |
|
647,202,659 |
|
||
GEM Trust Opportunistic 3 |
|
606,115,121 |
|
525,796,789 |
|
||
PIMCO Low Duration Fund |
|
724,412,126 |
|
556,523,428 |
|
||
Description of the Master Trusts Investment Contracts
The Stable Value Fund invests in traditional GICs, and synthetic GICs, which are backed by fixed income assets. The underlying investments held within the synthetic GICs are comprised of a low duration mutual fund managed by PIMCO and DCMC sponsored GEM Trusts. The GEM Trusts are commingled fixed income portfolios managed by DCMC and additional investment managers hired by DCMC that invest in high quality fixed income securities across the short, intermediate and core sectors. The crediting interest rates on investment contracts ranged from 3.69% to 5.83% for the year ended December 31, 2009 and from 3.32% to 5.83% for the year ended December 31, 2008. The weighted average credited interest rate
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
of return of the investment contracts based on the interest rate credited to participants was 4.06% for the year ended December 31, 2009 and 4.28% for the year ended December 31, 2008. The weighted average yield of the investment contracts based on the actual earnings of underlying assets in the Master Trust was 4.54% for the year ended December 31, 2009 and 4.83% for the year ended December 31, 2008.
For traditional GICs, the insurer maintains the assets in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. Synthetic GICs, backed by underlying assets, provide for a guaranteed return on principal and accrued interest over a specified period of time (i.e., period of time before the crediting rate reset) through benefit-responsive wrapper contracts issued by a third party assuming that the underlying assets meet the requirements of the GIC.
The contract or crediting rates for certain stable value investment contracts are reset six times per year and are based on the performance of the portfolio of assets underlying these contracts. Inputs used to determine the crediting rate include each contracts portfolio market value of fixed income assets, current yield-to-maturity, duration (similar to weighted average life) and market value relative to contract value. All contracts have a guaranteed rate of at least 0% or higher with respect to determining interest rate resets.
Traditional GICs expose the Stable Value Fund to direct credit risk associated with each contract issuer. To mitigate this risk, the investment guidelines prohibit DCMC from purchasing contracts from issuers with a credit rating lower than Aa3/AA. In addition, the weighted average credit rating of all contracts must be A3/A- or higher at all times and no single traditional GIC issuer may represent more than 5% of the total Stable Value Fund. Additionally, DCMC continually monitors external credit rating agencies. DCMC monitors credit rating history, downgrade/upgrade notifications, and analyst reports for all current and potential issuers. There are no reserves against contract value for credit risk of the contract issuer or otherwise.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value for plan permitted benefit payments. Certain events may limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (i) amendments to the Plan documents (including complete or partial Plan termination or merger with another plan); (ii) changes to Plans prohibition on competing investment options or deletion of equity wash provisions; (iii) bankruptcy of the Plan sponsor or other Plan sponsor events (i.e. divestitures or spin-offs of a subsidiary) which cause a significant withdrawal from the Plan or (iv) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan Administrator does not believe that the occurrence of any such value event, which would limit the Plans ability to transact at contract value, is probable.
Based on certain events specified in fully benefit-responsive investment contracts (i.e., GICs and synthetic GICs), both the Plan/Trust and issuers of such investment contracts are permitted to terminate the investment contracts. If applicable, such terminations can occur prior to the scheduled maturity date.
Examples of termination events that permit issuers to terminate investment contracts include the following:
· The Plan Sponsors receipt of a final determination notice from the Internal Revenue Service that the Plan does not qualify under Section 401(a) of the Code.
· The Trust ceases to be exempt from federal income taxation under Section 501(a) of the Code.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
· The Plan/Trust or its representative breaches material obligations under the investment contract such as a failure to satisfy its fee payment obligations.
· The Plan/Trust or its representative makes a material misrepresentation.
· The Plan/Trust makes a material amendment to the Plan/Trust and/or the amendment adversely impacts the issuer.
· The Plan/Trust, without the issuers consent, attempts to assign its interest in the investment contract.
· The balance of the contract value is zero or immaterial.
· Mutual consent.
· The termination event is not cured within a reasonable time period, i.e., 30 days.
For synthetic GICs, additional termination events include the following:
· The investment manager of the underlying securities is replaced without the prior written consent by the issuer.
· The underlying securities are managed in a way that does not comply with the investment guidelines.
At termination, the contract value is adjusted to reflect a discounted value based on surrender charges or other penalties for GICs.
For synthetic GICs, termination is at market value of the underlying securities less unpaid issuer fees or charges. If the termination event is not material based on industry standards, it may be possible for the Plan/Trust to exercise its right to require the issuer that initiated the termination to extend the investment contract for a period no greater than what it takes to immunize the underlying securities and/or it may be possible to replace the issuer of a synthetic GIC that terminates the contract with another synthetic GIC issuer. Both options help maintain the stable contract value.
Financial Instruments with Off-Balance-Sheet Risk in the Master Trust
In accordance with the investment strategy of the managed accounts, the Master Trusts investment managers execute transactions in various financial instruments that may give rise to varying degrees of off-balance-sheet market and credit risk. These instruments can be executed on an exchange or negotiated in the OTC market. These financial instruments include futures, forward settlement contracts, swap and option contracts.
Swap contracts include interest rate swap contracts which involve an agreement to exchange periodic interest payment streams (typically fixed vs. variable) calculated on an agreed upon periodic interest rate multiplied by a predetermined notional principal amount.
Market risk arises from the potential for changes in value of financial instruments resulting from fluctuations in interest and foreign exchange rates and in prices of debt and equity securities. The gross notional (or contractual) amounts used to express the volume of these transactions do not necessarily represent the amounts potentially subject to market risk. In many cases, these financial instruments serve to reduce, rather than increase, the Trusts exposure to losses from market or other risks. In addition, the measurement of market risk is meaningful only when all related and offsetting transactions are identified. The Trusts investment managers generally limit the Trusts market risk by holding or purchasing offsetting positions.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
As a writer of option contracts, the Master Trust receives a premium to become obligated to buy or sell financial instruments for a period of time at the holders option. During this period, the Trust bears the risk of an unfavorable change in the market value of the financial instrument underlying the option, but has no credit risk, as the counterparty has no performance obligation to the Trust once it has paid its cash premium.
The Master Trust is subject to credit risk of counterparty nonperformance on derivative contracts in a gain position, except for written options, which obligate the Trust to perform and do not give rise to any counterparty credit risk.
NOTE 5 FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurements and Disclosures, established a single authoritative definition of fair value, set a framework for measuring fair value, and requires additional disclosures about fair value measurements. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 - Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly. Inputs on assets and liabilities with contractual terms must be observable for substantially the full contract term;
Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
A financial instruments level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
The following presents the Plan and Master Trusts financial instruments carried at fair value on a recurring basis as of December 31, 2009 and 2008, and indicates the ASC 820 fair value hierarchy levels described above:
|
|
Investments at Fair Value as of December 31, 2009 |
|
||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
Plans investments, excluding interest in Master Trust: |
|
|
|
|
|
|
|
|
|
||||
Company stocks |
|
$ |
614,393,004 |
|
$ |
|
|
$ |
|
|
$ |
614,393,004 |
|
Participant-directed brokerage accounts* |
|
95,909,689 |
|
|
|
|
|
95,909,689 |
|
||||
Participant loans |
|
|
|
|
|
81,407,079 |
|
81,407,079 |
|
||||
Total Plans investments |
|
$ |
710,302,693 |
|
$ |
|
|
$ |
81,407,079 |
|
$ |
791,709,772 |
|
|
|
|
|
|
|
|
|
|
|
||||
Master Trusts investments: |
|
|
|
|
|
|
|
|
|
||||
Common stocks |
|
|
|
|
|
|
|
|
|
||||
International common stocks |
|
$ |
128,216,804 |
|
$ |
|
|
$ |
|
|
$ |
128,216,804 |
|
Large-cap domestic common stocks |
|
609,918,604 |
|
|
|
|
|
609,918,604 |
|
||||
Mid-cap domestic common stocks |
|
286,302,553 |
|
|
|
|
|
286,302,553 |
|
||||
Small-cap domestic common stocks |
|
45,106,802 |
|
|
|
|
|
45,106,802 |
|
||||
Total common stocks |
|
1,069,544,763 |
|
|
|
|
|
1,069,544,763 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Investment contracts: |
|
|
|
|
|
|
|
|
|
||||
Traditional GICs |
|
|
|
894,567,953 |
|
|
|
894,567,953 |
|
||||
Wrapper contracts |
|
|
|
2,504,450 |
|
|
|
2,504,450 |
|
||||
Underlying assets on synthetic GICs: |
|
|
|
|
|
|
|
|
|
||||
Mutual funds |
|
724,412,126 |
|
|
|
|
|
724,412,126 |
|
||||
Commingled funds |
|
|
|
3,871,352,144 |
|
|
|
3,871,352,144 |
|
||||
Total investment contracts |
|
724,412,126 |
|
4,768,424,547 |
|
|
|
5,492,836,673 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Preferred stocks |
|
5,662,597 |
|
|
|
|
|
5,662,597 |
|
||||
Fixed income securities |
|
|
|
28,258,005 |
|
|
|
28,258,005 |
|
||||
Mutual funds |
|
110,849,115 |
|
|
|
|
|
110,849,115 |
|
||||
Common collective trusts |
|
|
|
1,217,694,419 |
|
|
|
1,217,694,419 |
|
||||
Cash and short term investments |
|
|
|
18,740,468 |
|
|
|
18,740,468 |
|
||||
Total Trust investments assets |
|
1,910,468,601 |
|
6,033,117,439 |
|
|
|
7,943,586,040 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other financial instruments** |
|
(8,825 |
) |
226,586 |
|
|
|
217,761 |
|
||||
Total Master Trust assets |
|
$ |
1,910,459,776 |
|
$ |
6,033,344,025 |
|
$ |
|
|
$ |
7,943,803,801 |
|
*Underlying assets on participant-directed brokerage accounts relate to mutual funds.
**Other financial instruments include forwards, futures and options.
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
|
|
Investment Assets at Fair Value as of December 31, 2008 |
|
||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
Plans investments, excluding interest in Master Trust: |
|
|
|
|
|
|
|
|
|
||||
Company stocks |
|
$ |
465,410,098 |
|
$ |
|
|
$ |
|
|
$ |
465,410,098 |
|
Mutual funds |
|
267,359,396 |
|
|
|
|
|
267,359,396 |
|
||||
Participant-directed brokerage account* |
|
44,912,224 |
|
|
|
|
|
44,912,224 |
|
||||
Participant loans |
|
|
|
|
|
83,268,206 |
|
83,268,206 |
|
||||
Total Plans investments |
|
$ |
777,681,718 |
|
$ |
|
|
$ |
83,268,206 |
|
$ |
860,949,924 |
|
|
|
|
|
|
|
|
|
|
|
||||
Master Trusts investments: |
|
|
|
|
|
|
|
|
|
||||
Common stocks |
|
$ |
669,061,967 |
|
$ |
2,280,462 |
|
$ |
|
|
$ |
671,342,429 |
|
Preferred stocks |
|
1,885,459 |
|
|
|
|
|
1,885,459 |
|
||||
Fixed income securities |
|
|
|
25,532,985 |
|
|
|
25,532,985 |
|
||||
Mutual funds |
|
74,024,212 |
|
|
|
|
|
74,024,212 |
|
||||
Common collective trusts |
|
|
|
771,047,331 |
|
|
|
771,047,331 |
|
||||
Investment contracts: |
|
|
|
|
|
|
|
|
|
||||
Traditional GICs |
|
|
|
924,277,687 |
|
|
|
924,277,687 |
|
||||
Wrapper contracts |
|
|
|
102,373,613 |
|
|
|
102,373,613 |
|
||||
Underlying assets on synthetic GICs** |
|
556,523,428 |
|
3,719,736,707 |
|
|
|
4,276,260,135 |
|
||||
Cash and short term investments |
|
|
|
14,935,899 |
|
|
|
14,935,899 |
|
||||
Total Trust investments assets |
|
1,301,495,066 |
|
5,560,184,684 |
|
|
|
6,861,679,750 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Other financial instruments*** |
|
(42,394 |
) |
1,202,452 |
|
|
|
1,160,058 |
|
||||
Total Master Trust assets |
|
$ |
1,301,452,672 |
|
$ |
5,561,387,136 |
|
$ |
|
|
$ |
6,862,839,808 |
|
*Underlying assets on participant-directed brokerage accounts relate to mutual funds.
**Underlying assets on synthetic GICs include fixed income securities, commingled funds and mutual funds.
***Other financial instruments include swaps, forwards, futures and options.
The table below sets forth a summary of changes in the fair value of the Plans level 3 investment assets for the years ended December 31, 2009 and 2008:
|
|
Participant Loans |
|
||||
|
|
2009 |
|
2008 |
|
||
Balance, beginning of year |
|
$ |
83,268,206 |
|
$ |
98,689,350 |
|
Purchases, sales, issuances, and settlements (net) |
|
(1,861,127 |
) |
(15,421,144 |
) |
||
Balance, end of year |
|
$ |
81,407,079 |
|
$ |
83,268,206 |
|
NOTE 6 ASSET TRANSFERS
Asset transfers to the Plan for the year ended December 31, 2009 of $86,968 represent participant investment account balances attributable to employees transferred from the DuPont 401(k).
Asset transfers in of $54,690,740 for the year ended December 31, 2008 represent the assets from the ChemFirst Plan and DuPont RSP and the participant investments from the DuPont 401(k) for employees of DuPont Displays and DuPont Authentication that were merged with the Plan at December 31, 2008. All ChemFirst Plan investments were liquidated at fair value and cash proceeds amounting to $27,240,566 and participant loans balances totaling $1,455,907 were transferred into the Plan as of the effective date of the merger. DuPont RSP assets with a fair value of $20,171,297 were transferred in-
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
kind to the Plan as of the date of the merger. DuPont 401(k) assets with a fair value of $5,822,970 were also transferred in-kind to the Plan as of the date of the merger.
Asset transfers out of the Plan for the year ended December 31, 2009 of $317,066 represent participant investment account balances attributable to employees transferred to the Pioneer Hi-Bred International, Inc. Savings Plan (Pioneer Plan), a plan of a Company affiliate.
Asset transfers out of the Plan for the year ended December 31, 2008 of $3,198,709 represent participant investment account balances amounting to $2,441,414 attributable to employees transferred to the Pioneer Plan, and transfers of $757,295 to the Kordsa, Inc. 401(k) Profit Sharing Plan, a plan for employees of a former Company affiliate.
NOTE 7 CONOCOPHILLIPS STOCK
On September 28, 1998, DuPont announced that the Board of Directors had approved a plan to divest DuPonts 100 percent-owned petroleum business, Conoco, Inc. On August 6, 1999, DuPont completed the planned divestiture through a tax-free split-off. DuPont exchanged its shares of Conoco, Inc. Class B common stock for shares of DuPont common stock. Plan participants had the option to exchange shares of DuPont Company stock, which were held in their participant accounts. For each share of DuPont common stock exchanged, the participant received an appropriate number of shares of Conoco Class B common stock. Accordingly, the Conoco Class B Stock Fund was created as an investment fund of the Plan. 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. On August 30, 2003, the Conoco Stock Fund became the ConocoPhillips Stock Fund. The balance on the Statement of Net Assets Available for Benefits within Company stocks related to ConocoPhillips stock was $40,894,391 and $44,320,807 at December 31, 2009 and 2008, respectively.
NOTE 8 RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds and units of common collective trust funds managed by Northern Trust and Bank of America, which also serve as trustees. In addition, the Plan offers the DuPont Company stock as an investment option. At December 31, 2009 the Plan held 17,032,925 shares of DuPont common stock valued at $573,498,613. At December 31, 2008 the Plan held 16,646,405 shares of DuPont common stock valued at $421,089,291. The Plan purchased $131,581,770 and $158,938,142 of stock during the years ended December 31, 2009 and December 31, 2008, respectively. The Plan sold $118,678,572 and $141,864,211 of stock during the years ended December 31, 2009 and December 31, 2008, respectively. The Plan holdings in shares of DuPont common stock as of December 31, 2008 include $906,154 received as part of the merger with the DuPont RSP and transfers from the DuPont 401(k) Plan. Transactions in these investments qualify as party-in-interest transactions which are exempt from the prohibited transaction rules of ERISA.
Also, the Stable Value Fund assets are managed by DCMC, under the terms of an investment management agreement between DCMC and the Company. DCMC hires additional investment managers to manage a portion of the fixed income assets backing synthetic GICs allocated to the Stable Value Fund. The amount of DCMC fees accrued and paid by the Stable Value fund was $1,737,004 and $2,124,557 for the years ended December 31, 2009 and December 31, 2008, respectively. DCMC fee amounts relate to the Master Trust and are allocated proportionately to the plans within the Master Trust based on each
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
plans interest to the total fair value of the Master Trust investment funds. These fees qualify as party-in-interest transactions, which are exempt from prohibited transaction rules of ERISA.
NOTE 9 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 would become 100% vested in the profit sharing contributions.
NOTE 10 TAX STATUS
The Plan is a qualified plan pursuant to Section 401(a) of the Internal Revenue Code (the Code) and the related Trusts are exempt from federal taxation under Section 501(a) of the Code. A favorable tax determination letter from the Internal Revenue Service dated October 9, 2003, covering the Plan and amendments through December 2, 2002, has been received by the Plan. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently operated in accordance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plans financial statements.
NOTE 11 RISKS AND UNCERTAINTIES
The Plan provides for various investment options, which include investments in any combination of equities, fixed income securities, individual guaranteed investment contracts, currency and commodities, futures, forwards, options and derivative contracts. Investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investment securities, it is possible that changes in risks in the near term could materially affect participants account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.
NOTE 12 RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2009 and 2008 to the Form 5500:
|
|
2009 |
|
2008 |
|
||
|
|
|
|
|
|
||
Net assets available for benefits per the financial statements |
|
$ |
8,585,557,787 |
|
$ |
7,819,250,787 |
|
Amounts allocated to withdrawing participants |
|
(681,192 |
) |
(481,955 |
) |
||
Loans balances considered deemed distributions |
|
(343,266 |
) |
|
|
||
Adjustment from contract value to fair value for fully benefit-responsive investment contracts |
|
110,947,176 |
|
(88,185,424 |
) |
||
|
|
|
|
|
|
||
Net assets available for benefits per the Form 5500 |
|
$ |
8,695,480,505 |
|
$ |
7,730,583,408 |
|
DuPont Retirement Savings Plan
Notes to Financial Statements
December 31, 2009 and 2008
The following is a reconciliation of the Plans interest in the Master Trust gain per the financial statements for the year ended December 31, 2009 to the Form 5500:
|
|
2009 |
|
|
|
|
|
|
|
Net appreciation in value of the Plans interest in the Master Trust included in the financial statements |
|
$ |
763,565,476 |
|
2009 adjustment from contract value to fair value for fully benefit-responsive investment contracts |
|
110,947,176 |
|
|
2008 adjustment from contract value to fair value for fully benefit-responsive investment contracts |
|
88,185,424 |
|
|
|
|
|
|
|
Net appreciation in value of the Plans interest in the Master Trust per the Form 5500 |
|
$ |
962,698,076 |
|
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but are not yet paid as of that date. The following is a reconciliation of the benefits paid to participants per the financial statements to the Form 5500 for the year ended December 31, 2009:
|
|
2009 |
|
|
|
|
|
|
|
Benefits paid to participants per the financial statements |
|
$ |
601,713,147 |
|
Amounts allocated to withdrawing participants at December 31, 2009 |
|
681,192 |
|
|
Amounts allocated to withdrawing participants at December 31, 2008 |
|
(481,955 |
) |
|
Deemed distributions |
|
343,266 |
|
|
Benefits paid to participants per the Form 5500 |
|
$ |
602,255,650 |
|
DuPont Retirement Savings Plan
Schedule of Assets (Held at End of Year) as of December 31, 2009
Attachment to Form 5500, Schedule H, Part IV, Line i
|
|
|
|
|
|
|
|
(e) |
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
Current |
|
|
(a) |
|
Identity of Issue |
|
Description of Investment |
|
Cost |
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
DuPont Company Stock |
|
Company Stock |
|
** |
|
$ |
573,498,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ConocoPhillips Stock |
|
Company Stock |
|
** |
|
40,894,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Plan interest in the DuPont and Related Companies Defined Contribution Plan Master Trust |
|
Master Trust |
|
** |
|
7,880,469,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Participant-directed Brokerage Account |
|
Brokerage Account |
|
** |
|
95,909,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Participant Loans |
|
4.00% to 10.00% - Maturing from January 2010 to January 2020 |
|
** |
|
81,407,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets Held At End of Year |
|
|
|
|
|
$ |
8,672,178,792 |
|
* |
Party in interest |
** |
Cost not required for participant directed investments |