DuPont 2011 Annual Report Download - page 72

Table of Contents E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
In certain cases, the company has recourse to assets held as collateral, as well as personal guarantees from customers and suppliers. Assuming liquidation,
these assets are estimated to cover approximately 50 percent of the $362 of guaranteed obligations of customers and suppliers. Set forth below are the
company's guaranteed obligations at December 31, 2011 :
Short-Term Long-Term Total
Obligations for customers and suppliers1:
Bank borrowings (terms up to 5 years) $ 278 $ 83 $ 361
Leases on equipment and facilities (terms up to 3 years) — 1 1
Obligations for equity affiliates 2 :
Bank borrowings (terms less than 2 years) 199 2 201
Total obligations for customers, suppliers, and equity affiliates 477 86 563
Obligations for divested subsidiaries:
Conoco (terms up to 15 years)3— 16 16
Other (terms up to 6 years) — 4 4
Total $ 477 $ 106 $ 583
1. Existing guarantees for customers and suppliers arose as part of contractual agreements.
2. Existing guarantees for equity affiliates arose for liquidity needs in normal operations.
3. The company has guaranteed certain obligations and liabilities related to a divested subsidiary, Conoco, which has indemnified the company for any liabilities the company may incur
pursuant to these guarantees.
Operating Leases
The company uses various leased facilities and equipment in its operations. The terms for these leased assets vary depending on the lease agreement.
Future minimum lease payments (including residual value guarantee amounts) under non-cancelable operating leases are $293, $251, $194, $151 and $128 for
the years 2012, 2013, 2014, 2015 and 2016, respectively, and $230 for subsequent years and are not reduced by non-cancelable minimum sublease rentals due
in the future in the amount of $6. Net rental expense under operating leases was $308, $268 and $302 in 2011, 2010 and 2009, respectively.
Asset Retirement Obligations
The company has recorded asset retirement obligations primarily associated with closure, reclamation and removal costs for mining operations related to the
production of titanium dioxide in Performance Chemicals. The company's asset retirement obligation liabilities were $59 at December 31, 2011 and 2010 .
Imprelis®
The company has received claims and been served with multiple lawsuits seeking class action status alleging that the use of Imprelis® herbicide caused
damage to certain trees. In August 2011, the company suspended sales of Imprelis® . In September 2011, the company began a process to fairly resolve claims
associated with the use of Imprelis®. The deadline for property owners to file claims was extended to February 1, 2012 as long as the company received notice
of the intent to file by November 30, 2011. The company has established review processes to verify and evaluate damage claims, and based on current
information, the company recorded a charge of $175 in cost of goods sold and other operating charges in 2011 to resolve these claims. Additional charges
could be incurred, but can be reasonably estimated only after claims are made known and the company's review processes are completed. DuPont intends to
seek recovery from its insurance carriers for costs associated with this matter in excess of $100.
Litigation
The company is subject to various legal proceedings arising out of the normal course of its business including product liability, intellectual property,
commercial, environmental and antitrust lawsuits. It is not possible to predict the outcome of these various proceedings. Except as otherwise noted,
management does not anticipate their resolution will have a materially adverse effect on the company's consolidated financial position or liquidity. However,
the ultimate liabilities could be significant to results of operations in the period recognized.
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