DuPont 2005 Annual Report Download - page 49

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Part II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations–Continued
waste, like the company’s, represented only a small fraction of the total waste present at a site. The company received notice
of potential liability at 10 new sites during 2005 compared with four similar notices in 2004, and five in 2003. The company’s
expenditures associated with CERCLA and similar state remediation activities were approximately $27 million in 2005, $27 million
in 2004, and $22 million in 2003.
For nearly all Superfund sites, the company’s potential liability will be significantly less than the total site remediation costs
because the percentage of waste attributable to the company versus that attributable to all other PRPs is relatively low. Other
PRPs at sites where the company is a party typically have the financial strength to meet their obligations and, where they do
not, or where PRPs cannot be located, the company’s own share of liability has not materially increased. There are relatively
few sites where the company is a major participant, and the cost to the company of remediation at those sites, and at all
CERCLA sites in the aggregate, is not expected to have a material impact on the financial position, liquidity or results of
operations of the company.
Total expenditures for previously accrued remediation activities under CERCLA, RCRA and similar state laws were $79 million in
2005, $74 million in 2004, and $60 million in 2003.
REMEDIATION ACCRUALS
At December 31, 2005, the Consolidated Balance Sheets included an accrued liability of $343 million compared to $359 million
at year-end 2004. Considerable uncertainty exists with respect to environmental remediation costs and, under adverse changes
in circumstances, potential liability may range up to two to three times the amount accrued as of December 31, 2005. Of the
$343 million accrued liability, approximately 12 percent was reserved for non-U.S. facilities. Approximately 63 percent of the
reserve balance was attributable to RCRA and similar remediation liabilities, while 25 percent was attributable to CERCLA
liabilities. Remediation accruals of $64 million, $58 million and $47 million were added to the reserve in 2005, 2004 and 2003,
respectively. In 2004, nearly $5 million of remediation liabilities were transferred to Koch as part of the sale of INVISTA.
PFOA
DuPont manufactures fluoropolymer resins and dispersions as well as fluorotelomers, marketing many of them under the
Teflonand Zonylbrands. The fluoropolymer resin and dispersion businesses are part of the Electronic & Communication
Technologies segment; the fluorotelomers business is part of the Safety & Protection segment.
Fluoropolymer resins and dispersions are high-performance materials with many end uses including architectural fabrics,
telecommunications and electronic wiring insulation, automotive fuel systems, computer chip processing equipment, weather-
resistant/breathable apparel and nonstick cookware. Fluorotelomers are used to make soil, stain and grease repellants for
paper, apparel, upholstery and carpets as well as firefighting foams and coatings.
A form of PFOA is used as a processing agent to manufacture fluoropolymer resins and dispersions. For over 50 years, DuPont
purchased its PFOA needs from a third party, but beginning in the fall of 2002, it began producing PFOA to support the
manufacture of fluorpolymer resins and dispersions. PFOA is not used in the manufacture of fluorotelomers; however, it is an
unintended by-product present at trace levels in some fluorotelomer-based products.
DuPont Performance Elastomers, LLC uses PFOA in its manufacture of Kalrezperfluoroelastomer parts and certain fluoroelas-
tomers marketed under the Vitontrademark. As a result of a series of agreements with Dow, DuPont became the sole owner
of DuPont Dow Elastomers, LLC on June 30, 2005. See Note 13 to the Consolidated Financial Statements. The wholly owned
subsidiary has been renamed DuPont Performance Elastomers, LLC and is a part of the Performance Materials segment.
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