DuPont 2006 Annual Report Download - page 42

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, continued
(Dollars in millions) 2006 2005 2004
Cash (used for) provided by investing activities $(1,345) $(602) $1,936
In 2006, Cash used for investing activities totaled $1.3 billion compared to the $602 million used in 2005. The
increase reflects higher purchases of property, plant and equipment and lower proceeds from the sale of assets.
In addition, the settlement of forward exchange contracts issued to hedge the company’s net exposure, by
currency, related to monetary assets and liabilities resulted in the receipt of $45 million in 2006 versus the
receipt of $653 million in 2005. These settlements were largely offset by revaluation of the items being
hedged, which are reflected in the appropriate categories in the Consolidated Statement of Cash Flows.
Purchases of plant, property and equipment in 2006 totaled $1.5 billion.
In 2005, cash was used for investing activities totaling $602 million compared to investing activities that
provided cash of $1.9 billion in 2004. The primary difference was related to proceeds from the sale of assets,
which were $312 million in 2005 compared to $3.9 billion in 2004, the latter related principally to the sale of
INVISTA (see Notes 6 and 24 to the Consolidated Financial Statements). In addition, in 2005, the settlement
of forward exchange contracts issued to hedge the company’s net exposure, by currency, related to monetary
assets and liabilities resulted in the receipt of $653 million versus cash payments of $509 million in 2004. The
cash inflow in 2005 was primarily related to the stronger USD while the payments in 2004 were primarily
attributable to the weaker USD. These settlements were largely offset by revaluations of the items being
hedged, which are reflected in the appropriate categories in the Consolidated Statements of Cash Flows.
Purchases of plant, property and equipment in 2005 totaled $1.3 billion, including $70 million to replace plant
assets destroyed by the hurricanes.
The company expects 2007 purchases of plant, property and equipment to be modestly higher than 2006
levels.
(Dollars in millions) 2006 2005 2004
Cash used for financing activities $(2,323) $(2,851) $(5,550)
Changes in cash flows related to financing activities are principally related to the company’s borrowings and
share repurchase activity. Total debt at December 31, 2006 was $7.5 billion, a $650 million decrease from
December 31, 2005. This decrease was primarily due to the repayment of borrowings related to the 2005
AJCA cash repatriation program partially offset by the issuance of $1 billion in 10 and 30 year notes in
December 2006.
Total debt at December 31, 2005, was $8.2 billion, an increase of $1.7 billion from December 31, 2004,
primarily due to new foreign borrowings to support the AJCA cash repatriation program, the $1 billion
contribution to the principal U.S. pension plan and other cash needs, partially offset by domestic debt pay
downs from the cash repatriated under the AJCA program.
Dividends paid to common and preferred shareholders were $1.4 billion in 2006, 2005 and 2004. Dividends
per share of common stock were $1.48 in 2006, $1.46 in 2005 and $1.40 in 2004. The common dividend
declared in the first quarter 2007 was the company’s 410th consecutive dividend since the company’s first
dividend in the fourth quarter 1904.
The company’s Board of Directors authorized a $2 billion share buyback plan in June 2001. During 2005, the
company purchased and retired 9.9 million shares at a total cost of $505 million. During 2006, there were no
purchases of stock under this program. As of December 31, 2006 and 2005, the company has purchased
42
Part II