DuPont 2011 Annual Report Download - page 36

Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
2012, long-term employee benefits expense is expected to increase by about $225 million, primarily due to lower discount rates.
Environmental Matters
The company operates global manufacturing, product handling and distribution facilities that are subject to a broad array of environmental laws and
regulations. Such rules are subject to change by the implementing governmental agency, and the company monitors these changes closely. Company policy
requires that all operations fully meet or exceed legal and regulatory requirements. In addition, the company implements voluntary programs to reduce air
emissions, minimize the generation of hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the
generation of persistent, bioaccumulative and toxic materials. Management has noted a global upward trend in the amount and complexity of proposed
chemicals regulation. The costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, are significant
and will continue to be significant for the foreseeable future.
Pre-tax environmental expenses charged to current operations are summarized below:
(Dollars in millions) 2011 2010 2009
Environmental operating costs $ 587 $ 551 $ 528
Increase in remediation accrual 92 93 89
$ 679 $ 644 $ 617
About 75 percent of total pre-tax environmental expenses charged to current operations in 2011 resulted from operations in the U.S. The increases in total pre-
tax environmental expenses charged to operations were due primarily to acquired businesses and increased environmental research activities. Based on
existing facts and circumstances, management does not believe that year over year changes, if any, in environmental expenses charged to current operations
will have a material impact on the company's financial position, liquidity or results of operations.
Environmental Operating Costs
As a result of its operations, the company incurs costs for pollution abatement activities including waste collection and disposal, installation and maintenance
of air pollution controls and wastewater treatment, emissions testing and monitoring, and obtaining permits. The company also incurs costs related to
environmental related research and development activities including environmental field and treatment studies as well as toxicity and degradation testing to
evaluate the environmental impact of products and raw materials.
Remediation Accrual
Changes in the remediation accrual balance are summarized below:
(Dollars in millions)
Balance at December 31, 2009 $ 396
Remediation payments (82)
Increase in remediation accrual 93
Balance at December 31, 2010 $ 407
Remediation payments (83)
Increase in remediation accrual 92
Balance at December 31, 2011 $ 416
Annual expenditures are expected to continue to increase in the near future; however, they are not expected to vary significantly from the range of such
expenditures experienced in the past few years. Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly.
As of December 31, 2011, the company has been notified of potential liability under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA or Superfund) or similar state laws at about 410 sites around the U.S., with active remediation under way at approximately 160 of
these sites. In addition, the company has resolved its liability at approximately 170 sites, either by completing remedial actions with other PRPs or by
participating 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 2011 compared with ten and three similar notices in 2010 and 2009, respectively.
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