DuPont 2007 Annual Report Download - page 89

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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 enforcement policies, as well as the presence or absence of potentially responsible parties. At
December 31, 2007 and 2006, the Consolidated Balance Sheet included a liability of $357 and $349, 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, 2007.
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.
20. STOCKHOLDERS’ EQUITY
The company’s Board of Directors authorized a $2 billion share buyback plan in June 2001. During 2007 and 2006,
there were no purchases of stock under this program. During 2005, the company purchased and retired 9.9 million
shares at a total cost of $505. As of December 31, 2007, the company has purchased 20.5 million shares at a total
cost of $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. The company entered into an accelerated share repurchase agreement with Goldman Sachs & Co. (Goldman
Sachs) under which the company purchased and retired 75.7 million shares of DuPont’s outstanding common stock
from Goldman Sachs on October 27, 2005 at a price of $39.62 per share, with Goldman Sachs purchasing an
equivalent number of shares in the open market over the following nine-month period.
On July 27, 2006, Goldman Sachs completed its purchase of 75.7 million shares of DuPont’s common stock at a
volume weighted average price (VWAP) of $41.99 per share. Upon the conclusion of the agreement in 2006, the
company paid $180 in cash to Goldman Sachs to settle the agreement. The final settlement price was based upon
the difference between the VWAP per share for the nine-month period, which ended July 27, 2006, and the purchase
price of $39.62 per share. The amount paid to settle the contract was recorded as a reduction to Additional paid-in
capital during the third quarter 2006. In addition, the company made open market purchases of its shares in the third
quarter 2006 for $100 at an average price of $42.27 per share.
During 2007, the company paid $1.7 billion to purchase and immediately retire 34.7 million shares at an average
price of $48.85 per share. As of December 31, 2007, the company has completed the $5 billion share buyback plan
with the purchase and retirement of 112.8 million shares at an average price of $44.33 per share.
Common stock held in treasury is recorded at cost. When retired, the excess of the cost of treasury stock over its par
value is allocated between Reinvested earnings and Additional paid-in capital.
F-32
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)