DuPont 2005 Annual Report Download - page 94

E. I. du Pont de Nemours and Company
Notes to Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
antitrust claims. The company accrues for contingencies consistent with the policy set forth in Note 1. 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.
Environmental
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. The company accrues for environmental remediation
activities consistent with the policy set forth in Note 1. Much of this liability results from the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA, often referred to as Superfund), the Resource Conservation and Recovery
Act (RCRA), and similar state laws. These laws require the company to undertake certain investigative and remedial activities
at sites where the company conducts or once conducted operations or at sites where company-generated waste was
disposed. The accrual also includes estimated costs related to a number of sites identified by the company for which it is
probable that environmental remediation will be required, but which are not currently the subject of CERCLA, RCRA or state
enforcement activities.
Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs,
depend on the mix of unique site characteristics, evolving remediation technologies, diverse regulatory agencies and enforce-
ment policies, as well as the presence or absence of potentially responsible parties. At December 31, 2005 and 2004, the
Consolidated Balance Sheet includes a liability of $343 and $359, respectively, relating to these matters and, in management’s
opinion, is appropriate based on existing facts and circumstances. The average time frame, over which the accrued or
presently unrecognized amounts may be paid, based on past history, is estimated to be 15-20 years. Considerable uncertainty
exists with respect to these costs and, under adverse changes in circumstances, potential liability may range up to two to
three times the amount accrued as of December 31, 2005.
Other
The company has various purchase commitments incident to the ordinary conduct of business. In the aggregate, such
commitments are not at prices in excess of current market.
25. Stockholders’ Equity
In 2005, the company purchased and retired 9.9 million shares at a cost of approximately $505 under the $2 billion share
buyback that was approved by the Board of Directors in June 2001. Total purchases under this plan as of December 31, 2005
were 20.5 million shares at a cost of approximately $962. Management has not established a timeline for the buyback of the
remaining stock under this plan.
In addition to the plan described above, in October 2005 the Board of Directors authorized a $5 billion share buyback plan. On
October 24, 2005, the company entered into an accelerated share repurchase agreement with Goldman, Sachs & Co. (Goldman
Sachs) under which the company agreed to repurchase from Goldman Sachs shares of DuPont’s outstanding common stock for
an aggregate purchase price of approximately $3,025. Management has not established a timeline for the buyback of the
remaining stock under this plan.
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