DuPont 2015 Annual Report Download - page 16

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Part I
ITEM 1A. RISK FACTORS, continued
15
Failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions could adversely impact our
future results.
From time to time, the company evaluates acquisition candidates that may strategically fit its business and/or growth objectives.
If the company is unable to successfully integrate and develop acquired businesses, the company could fail to achieve anticipated
synergies and cost savings, including any expected increases in revenues and operating results, which could have a material adverse
effect on the company’s financial results. The company continually reviews its portfolio of assets for contributions to the company’s
objectives and alignment with its growth strategy. However, the company may not be successful in separating underperforming
or non-strategic assets and gains or losses on the divestiture of, or lost operating income from, such assets may affect the company’s
earnings. Moreover, the company might incur asset impairment charges related to acquisitions or divestitures that reduce its
earnings.
The company's business, including its results of operations and reputation, could be adversely affected by process safety
and product stewardship issues.
Failure to appropriately manage safety, human health, product liability and environmental risks associated with the company's
products, product life cycles and production processes could adversely impact employees, communities, stakeholders, the
environment, the company's reputation and its results of operations. Public perception of the risks associated with the company's
products and production processes could impact product acceptance and influence the regulatory environment in which the company
operates. While the company has procedures and controls to manage process safety risks, issues could be created by events outside
of its control including natural disasters, severe weather events, acts of sabotage and substandard performance by the company's
external partners.
As a result of the company's current and past operations, including operations related to divested businesses, the company
could incur significant environmental liabilities.
The company is subject to various laws and regulations around the world governing the environment, including the discharge of
pollutants and the management and disposal of hazardous substances. As a result of its operations, including its past operations
and operations of divested businesses, the company could incur substantial costs, including remediation and restoration costs. The
costs of complying with complex environmental laws and regulations, as well as internal voluntary programs, are significant and
will continue to be so for the foreseeable future. The ultimate costs under environmental laws and the timing of these costs are
difficult to predict. The company's accruals for such costs and liabilities may not be adequate because the estimates on which the
accruals are based depend on a number of factors including the nature of the matter, the complexity of the site, site geology, the
nature and extent of contamination, the type of remedy, the outcome of discussions with regulatory agencies and other Potentially
Responsible Parties (PRPs) at multi-party sites and the number and financial viability of other PRPs.
At December 31, 2015, the company had recognized a liability of $492 million related to the matters. Since considerable uncertainty
exists, under adverse changes in circumstances, the potential liability may range up to $1.0 billion above the amount accrued at
December 31, 2015. As described in Note 3 to the Consolidated Financial Statements, DuPont and Chemours entered a Separation
Agreement in connection with the spin-off of Chemours on July 1, 2015. Pursuant to the Separation Agreement, the company is
indemnified by Chemours for certain environmental matters that have an estimated liability of $291 million as of December 31,
2015 and a potential exposure that ranges up to approximately $610 million above the amount accrued. As such, the company
has recorded an indemnification asset of $291 million corresponding to the company’s accrual balance related to these matters at
December 31, 2015. If based on the actions, results of operations or financial position of Chemours, it were no longer probable
that the Chemours’ indemnification obligations would be satisfied, then the company could not continue to recognize the related
indemnification asset adversely impacting DuPont’s financial position.
Additional details on the company’s risks associated with environmental laws, regulations and environmental liabilities can be
found in Part I, Item 1, Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations,
on page 46 of this report and Note 16 to the Consolidated Financial Statements.