DuPont 2006 Annual Report Download - page 51

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, continued
in “de minimis buyouts” with other PRPs whose 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 six new sites during
2006 compared with eight similar notices in 2005 and four in 2004. The company’s expenditures associated
with CERCLA and similar state remediation activities were approximately $19 million in 2006, $27 million in
2005, and $27 million in 2004.
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 $64 million in 2006, $79 million in 2005, and $74 million in 2004.
Remediation Accruals
At December 31, 2006, the Consolidated Balance Sheets included an accrued liability of $349 million
compared to $343 million at December 31, 2005. 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, 2006. Of the $349 million accrued liability,
approximately 10 percent was reserved for non-U.S. facilities. Approximately 65 percent of the reserve balance
was attributable to RCRA and similar remediation liabilities, while about 25 percent was attributable to
CERCLA liabilities. Remediation accruals of $71 million, $64 million and $58 million were added to the
reserve in 2006, 2005 and 2004, respectively.
PFOA
DuPont manufactures fluoropolymer resins and dispersions as well as fluorotelomers, marketing many of them
under the Teflon»and Zonyl»brands. 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 (perfluorooctanoic acid and its salts, including the ammonium salt) is used as a processing
agent to manufacture fluoropolymer resins and dispersions. For over 50 years, DuPont purchased PFOA from a
third party, but beginning in the fall of 2002, it began producing PFOA to support the manufacture of
fluoropolymer resins and dispersions. PFOA is not used in the manufacturing of fluorotelomers; however, it is
an unintended by-product present at trace levels in some fluorotelomer-based products.
DuPont Performance Elastomers, LLC (DPE) uses PFOA in its manufacture of Kalrez»perfluoroelastomer
parts and certain fluoroelastomers marketed under the Viton»trademark. DPE, a wholly owned subsidiary, is a
part of the Performance Materials segment.
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Part II