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).

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

919,374,279 shares (excludes 87,041,427 shares of treasury stock) of common stock, $0.30 par value, were outstanding at October 31, 2005.

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.

2

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

See pages 6-25 for Notes to Consolidated Financial Statements.

See pages 6-25 for Notes to Consolidated Financial Statements.

4

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, 2004. 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 beneficiary. Certain reclassifications of prior year's data have been made to conform to current year classifications.

The company has stock-based compensation plans which are described more fully in Note 27 to the Consolidated Financial Statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2004. 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," 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. The company uses a nominal vesting period approach under which the costs related to stock-based employee compensation are expensed over the stated vesting period for all awards granted to employees, including employees who may become retirement eligible and not retired during the vesting period.

6

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

The following table illustrates the effect on net income (loss) and earnings (loss) per share in each period as if the fair value based method had been applied to all outstanding options in each period.

Recent clarification of certain provisions of SFAS No. 123 specifies that stock-based compensation awards should be vested on a non-substantive approach under which compensation costs should be recognized immediately for awards granted to retirement eligible employees or over the period from the grant date to retirement eligibility date. In second quarter 2005, the Securities and Exchange Commission (SEC) indicated that companies that followed the nominal vesting period approach at adoption of SFAS No. 123 must continue following that approach until the adoption of SFAS No. 123 (revised 2004), "Share-Based Payment" (SFAS 123R), which replaces SFAS No. 123. Upon adoption of SFAS 123R in the first quarter of 2006, DuPont will commence expensing new stock-based compensation awards using a non-substantive vesting approach. Using the non-substantive vesting approach in lieu of the nominal vesting approach would not have had a material impact on the company's financial results for the periods presented above.

7

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

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS 123R, which replaces SFAS No. 123, "Accounting for Stock-Based Compensation." As discussed above, DuPont voluntarily adopted the SFAS No. 123 fair value based method of accounting for share-based payment transactions with employees in 2003. SFAS 123R amends some aspects of the fair value measurement of the equity instruments granted to employees. The company does not currently expect its adoption to materially impact its financial position, liquidity or results of operations.

In March 2005, the FASB issued Interpretation No. (FIN) 47, "Accounting for Conditional Asset Retirement Obligations." FIN 47 defines the term "conditional asset retirement obligation" as used in SFAS No. 143, "Accounting for Asset Retirement Obligations." In addition, FIN 47 clarifies when an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when uncertainty exists about the timing and/or method of settlement. This statement becomes effective for the company beginning in the fourth quarter of 2005. The company continues to evaluate the Interpretation and does not expect its adoption to materially impact its financial position, liquidity or results of operations.

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

Results of operations in the third quarter of 2005 were affected by two major Hurricanes, Katrina and Rita, that struck the Gulf Coast of the United States. As a result, the company recorded a charge of $146 in the third quarter related to the clean-up and restoration of manufacturing operations, as well as the write-off of inventory and plant assets that were destroyed by the hurricanes. Hurricane charges reduced segment earnings as follows: Coatings & Color Technologies - $113; Performance Materials - $11; and Safety & Protection - $22. These charges are included in Cost of goods sold and other operating charges in the Consolidated Income Statement.

Account balances and activity for the company's corporate restructuring programs are as follows:

As of June 30, 2005, essentially all of the 2,700 employees identified as part of the company's 2004 program had been removed from the company's roles. The remaining liability balance at September 30, 2005 represents payments to be made over time to separated employees. A complete discussion of the prior years' activities is included in Note 4 of the company's Annual Report on Form 10-K for the year ended December 31, 2004.

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

In the third quarter 2004, the company recorded a charge of $102 related to the divestiture of INVISTA and other separation activities relating to Textiles & Interiors. The INVISTA-related portion of this charge was $61, which included $23 relating to the early termination of a long-term supply contract, $46 resulting from adjustments to the purchase price related to pension and working capital, partly offset by other changes in estimates of $8. Third quarter 2004 also includes a $41 impairment charge to write-down the company's investment in an equity affiliate to fair market value.

Year-to-date 2004 includes additional INVISTA-related charges of $528, consisting of $183 due primarily to an increase in book value of the net assets sold and additional separation charges and $345 related to an agreed upon reduction in sales price and other changes in estimates associated with the sale. Further details related to these activities can be found in Note 5 to the company's Annual Report on Form 10-K for the year ended December 31, 2004.

The company's third quarter 2005 tax provision of $435 includes $320 of tax expense associated with the planned repatriation of approximately $9,400 under the American Jobs Creation Act of 2004. Also included in the third quarter provision is $52 of tax expense associated with the company's policy of hedging its foreign currency denominated monetary assets and liabilities. Year-to-date 2005, the company recorded a tax provision of $1,461 which includes $396 of tax expense associated with the company's hedging policy, $320 related to the aforementioned repatriation, and a tax benefit of $24 related to the reversal of certain prior year tax contingencies previously reserved.

For the third quarter 2004, the company recorded a net tax benefit of $117, which included benefits of $165 primarily related to agreement on certain prior year audit issues previously reserved. Year-to-date 2004, the company recorded a net tax benefit of $114, which included a tax benefit of $137 associated with recording an increase in the deferred tax assets of two European subsidiaries for their tax basis investment losses recognized on local tax returns, $323 of other tax benefits associated with the separation of INVISTA, and the $165 benefit primarily related to the aforementioned agreement on certain prior year audit issues previously reserved. Year-to-date 2004 tax benefits were partially offset by net tax expense on operating income.

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

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

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

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

The transaction to acquire Dow's equity interest and to transfer the agreed upon assets was completed on June 30, 2005. Upon closing, the remaining elastomers business was renamed DuPont Performance Elastomers L.L.C. (DPE) and became a wholly owned subsidiary of DuPont, continuing to operate the Neoprene, HypalonÒ , KalrezÒ and VitonÒ businesses. The asset transfer to Dow resulted in a gain of $23 as the fair value of those assets exceeded their carrying value.

For those businesses that were transferred to Dow on June 30, 2005, net sales were $155 and net income was $0 for the three months ended September 30, 2004. For the nine months ended September 30, 2005 and 2004, net sales were $386 and $303 and net income was $17 and $0, respectively.

For some time, the company has been evaluating both its response to a long-term declining demand for the neoprene product and the anticipated capital investment requirements at the Louisville, Kentucky facility. The company now plans to consolidate production at its upgraded facility in LaPlace, Louisiana by the end of 2006, at which time neoprene production will cease at the Kentucky site. In June 2005, the company recorded a restructuring charge of $34, reflecting severance and related costs for approximately 275 employees, principally at the Louisville, Kentucky site.

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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)

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 September 30, 2005 is $15. 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.

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

Set forth below is a reconciliation of the company's estimated product warranty liability from December 31, 2004 through September 30, 2005:

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 relating 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 potential future payments is generally unlimited. The carrying amounts recorded for all indemnifications as of September 30, 2005 and December 31, 2004 are $92 and $99, 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 $70 is included in the indemnification balances stated above. The fair value was based on management's best estimate of the value expected to be required to issue the indemnifications in a stand alone, arm's length transaction with an unrelated party and, where appropriate, by the utilization of probability-weighted discounted net cash flow models.

The company has directly guaranteed various debt obligations under agreements with third parties related to equity affiliates, customers, suppliers and other unaffiliated companies. At September 30, 2005, the company had directly guaranteed $527 of such obligations, plus $376 relating to guarantees of historical obligations for divested subsidiaries and affiliates. This represents the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees.

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

In certain cases, the company has recourse to assets held as collateral, as well as personal guarantees from customers and suppliers. Assuming liquidation, these assets are estimated to cover approximately 20 percent of the $212 of guaranteed obligations of customers and suppliers. Set forth below are the company's guaranteed obligations at September 30, 2005:

As of September 30, 2005, 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 $95 at September 30, 2005. The guarantee amounts are tied to the unamortized lease values of the assets under synthetic lease and would become due should the company decide neither to renew these leases nor to exercise its purchase option. At September 30, 2005, 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 of the 73 cases pending against the company at September 30, 2005, were filed by growers who allege plant damage from using BenlateÒ  50 DF and, in some cases, BenlateÒ  WP. Twenty-four 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. Three of the pending cases include claims for alleged personal injuries arising from exposure to BenlateÒ  50 DF and/or BenlateÒ  WP. Twenty-six of the pending cases include claims for alleged damage to shrimping operations from BenlateÒ  OD.

In one of the 20 cases alleging plant damage, the Florida Supreme Court denied plaintiffs' petition for review in the first quarter of 2005 thereby refusing to disturb an intermediate appellate court ruling reversing a $26 verdict against DuPont and ordering a new trial. This case, and nine other cases, were settled in October 2005 for a total of $8. A trial is currently scheduled for February 2006 in state court in Miami involving Costa Rican fern growers who allege that BenlateÒ damaged their crops. The court has not ruled whether this trial will address two or only one of the ten pending cases.

In the 24 reopener cases, the Florida federal court dismissed the 19 cases pending before it in July 2004; plaintiffs have filed appeals in 16 of these cases. In 2004, the federal district court in Hawaii dismissed the five reopener cases pending before it. The plaintiffs have appealed to the Ninth Circuit Court of Appeals. The case pending in state court in Hawaii was settled in part for $1.2. The remainder of the case was dismissed on DuPont's motion. Plaintiffs are expected to appeal. The remaining two cases are pending in Florida state court. One case is currently scheduled for trial on June 19, 2006.

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

The three cases involving allegations that BenlateÒ caused birth defects to children exposed in utero are pending in Delaware state court. In the case that had been set for trial on May 9, 2005, the court granted the company's motion to dismiss due to insufficient scientific support for causation. Plaintiffs have asked the trial court to reconsider the issue. If the court refuses, plaintiffs are expected to appeal.

Twenty-six cases involving damage to shrimp are pending against the company in state court in 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. The company contends that the injuries alleged are attributable to a virus, Taura Syndrome Virus, and in no way involve BenlateÒ  OD. Two cases were tried and both trials resulted in adverse judgments of approximately $14 each. The intermediate appellate court subsequently reversed the adverse verdicts and, in the first quarter of 2005, judgments were entered in the company's favor in both cases. Plaintiffs have filed a motion seeking sanctions for alleged discovery defaults in all of the cases, including the two cases in which judgment has been entered for the company. Hearings are ongoing in this matter.

The company does not believe that BenlateÒ caused the damages alleged in each of these cases and denies the allegations of fraud and misconduct. The company continues to defend itself in ongoing matters. As of September 30, 2005, the company has incurred costs and expenses of approximately $1,900 associated with these matters. The company has recovered approximately $277 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.

In July 2004 and December of 2004, the EPA filed administrative complaints against the company alleging that the company failed to comply with the technical reporting requirements of the Toxic Substances Control Act (TSCA) and the Resource Conservation and Recovery Act (RCRA) regarding PFOA, (collectively, perflurooctanoic acids and its salts, including the ammonium salt). The first complaint relates to information about PFOA for a period beginning in June 1981 through March 2001; the second relates to information about PFOA for a period beginning in late July 2004 to mid-October 2004. The parties have reached an agreement in principle, subject to certain conditions, to resolve this matter and, as a result, the company established a reserve of $15 in the first quarter of 2005.

On May 17, 2005, the company was served with a grand jury subpoena from the U.S. District Court for the District of Columbia. The subpoena, which was served by the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice (DOJ) relates to PFOA, ammonium perfluorooctanoate (APFO), C-8 and FC-143. The subpoena calls for the production of documents previously produced to the EPA and other documents related to those chemicals. The company will be fully responsive to the DOJ in this matter and has begun the production of documents. It is expected that the collection, review and production of documents will continue past December 31, 2005.

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

In August 2001, a class action was filed in West Virginia state court against the company and the Lubeck Public Service District. The company 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. The complaint alleged that residents living near the Washington Works facility had suffered, or may suffer deleterious health effects from exposure to PFOA in drinking water. The relief sought included damages for medical monitoring, diminution of property values, and punitive damages plus injunctive relief to stop releases of PFOA. The company and the attorneys for the class reached a settlement agreement in 2004 which was approved by the Wood County Circuit Court on February 28, 2005 after a fairness hearing. The settlement binds a class of approximately 80,000 residents. As defined by the court, the class includes those individuals who have consumed, for at least one year, water containing 0.05 parts per billion or greater of PFOA from any of six designated public water sources or from sole source private wells.

The company established a reserve of $108 in the third quarter of 2004 as a result of expenditures required under the settlement agreement, valued at $85, plus attorneys' fees and expenses of $23. On July 1, 2005, the company paid the attorneys' fees and expenses; made a payment of $70, which class counsel has designated to fund a community health project; and provided $5 to fund a health study by an independent panel of experts in the communities exposed to PFOA to evaluate available scientific evidence on whether any probable link exists between exposure to PFOA and human disease. In addition, the company is providing state-of-the art water treatment systems (estimated to cost approximately $10) designed to reduce the level of PFOA in the water to six area water districts.

The settlement results in the dismissal of all claims asserted in the lawsuit except for personal injury claims. If the independent panel concludes that no probable link exists between exposure to PFOA and any diseases, then the settlement would also resolve personal injury claims. If the independent panel concludes that a probable link does exist between exposure to PFOA and any diseases, then the company would also fund a medical monitoring program (capped at $235) to pay for such medical testing. In this event, plaintiffs would retain their right to pursue personal injury claims. All other claims in the lawsuit would remain dismissed by the settlement.

On July 15, 2005, fourteen Florida individuals filed an action against the company in the United States District Court for the Southern District of Florida on behalf of a purported class of consumers resident in the state of Florida that have purchased cookware with TeflonÒ non-stick coating. The action alleges that the company violated Florida state law by engaging in deceptive and unfair trade practices by failing "to disclose to consumers that products containing TeflonÒ were or are potentially harmful to consumers." It also alleges that the company has liability to plaintiffs and the class under Florida state law on theories of negligence and strict liability. The action alleges that TeflonÒ contained or released harmful and dangerous substances, including a chemical (PFOA) alleged to have been determined to be "likely" to cause cancer in humans. The action seeks monetary damages for consumers who purchased cooking products containing TeflonÒ , as well as the creation of funds for medical monitoring and independent scientific research, attorneys' fees and other relief. Class actions containing similar allegations and seeking similar relief have been filed in California, Colorado, Illinois, Iowa, Massachusetts, Michigan, Missouri, New York, Ohio, Pennsylvania, South Carolina and Texas federal courts since June 30, 2005. DuPont believes these actions are without merit and will defend itself vigorously.

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

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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, including DDE as a result of its participation in the polychloroprene (PCP) and ethylene propylene diene monomer (EPDM) markets, for possible antitrust violations. As a result of agreements between Dow and DuPont, DDE became a wholly owned subsidiary of DuPont on June 30, 2005 and has been renamed DuPont Performance Elastomers L.L.C. (DPE). See Note 9. DDE has responded to subpoenas in connection with these investigations and DPE continues to cooperate with authorities. DDE and DuPont were named in related civil litigation, some of which is still pending.

In April of 2004, DuPont and Dow entered into a series of agreements under which DuPont obtained complete control over directing DDE's response to these investigations and the related litigation, and DuPont agreed to a disproportionate share of the venture's liabilities and costs related to these matters. Consequently, DuPont bears any potential liabilities and costs up to the initial $150. Dow is obligated to indemnify DuPont for up to $72.5 by paying 15 to 30 percent toward liabilities and costs in excess of $150. Therefore, in 2004 DuPont established a reserve of $268, of which $18 will be reimbursed by Dow, to reflect its share of anticipated losses. Given the uncertainties inherent in predicting the outcome of these investigations and the related litigation, and in projecting future costs, it is reasonably possible that actual losses may exceed the amount accrued. However, a range of such losses cannot be reasonably estimated at this time.

On March 29, 2005, the court approved a plea agreement that DDE reached with the U.S. Department of Justice (DOJ) in January 2005. The agreement includes an $84 fine and resolves all criminal charges against the subsidiary related to PCP in the United States. Under the terms of the agreement, DDE agreed to provide ongoing cooperation to the DOJ.

In November of 2004, the court approved the settlement reached by DDE and attorneys for the class, of federal antitrust litigation related to PCP for $42, including attorneys' fees and costs. DDE also reached a settlement with attorneys for the class, of federal antitrust litigation related to EPDM for $24.6, including attorneys' fees and costs. The court approved the EPDM settlement in May 2005.

The company is subject to various 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 the information available indicates that it is probable that a liability has been incurred and the amount of the liability 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.

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

The following sets forth the company's total comprehensive income (loss) for the periods shown:

The company has entities identified and consolidated as VIEs where DuPont is considered the primary beneficiary. At September 30, 2005, the assets and liabilities of these entities are immaterial to the Consolidated Financial Statements of the company.

The company is also involved with other entities that are VIEs for which the company is not currently the primary beneficiary. Future events may require these VIEs to be consolidated if the company becomes the primary beneficiary. At September 30, 2005, the assets and liabilities of the other VIEs are immaterial to the Consolidated Financial Statements of the company. The company's share of these VIEs net income (loss) is included in Other income in the Consolidated Income Statements, and is not material.

21

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

The company's objectives and strategies for holding derivative instruments are included in Note 30 to the company's Consolidated Financial Statements included in the company's Annual Report on Form 10-K for the year ended December 31, 2004. During the nine-month period ended September 30, 2005, hedge ineffectiveness of $2 was reported in earnings. There were no hedge gains or losses excluded from the assessment of hedge effectiveness or recognized in earnings for forecasted transactions that did not occur related to cash flow hedges. The following table summarizes the effect of cash flow hedges on accumulated other comprehensive income (loss) for the period:

The following sets forth the components of the company's net periodic pension benefit cost: