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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-17
3. DIVESTITURES AND OTHER TRANSACTIONS
Performance Chemicals
On July 1, 2015 (the Distribution Date), DuPont completed the separation of its Performance Chemicals segment through the spin-
off of all of the issued and outstanding stock of Chemours (the Separation). To effect the spin-off, DuPont distributed to its
stockholders one share of Chemours common stock, par value $0.01 per share, for every five shares of DuPont common stock,
par value $0.30 per share, (the Distribution) outstanding as of 5:00 p.m. June 23, 2015, the record date for the Distribution. In
lieu of fractional shares of Chemours, stockholders of DuPont received cash, which generally was taxable. In connection with
the Separation, the company and Chemours entered into a Separation Agreement and a Tax Matters Agreement, discussed below,
and certain ancillary agreements, including an employee matters agreement, agreements related to transition and site services, and
intellectual property cross licensing arrangements. In addition, the companies have entered into certain supply agreements. In
January 2016, the company agreed in principle to prepay $190 for certain goods and services expected to be delivered by Chemours
over the next twelve to fifteen months.
Separation Agreement
The company and Chemours entered into a Separation Agreement that sets forth, among other things, the agreements between the
company and Chemours regarding the principal transactions necessary to effect the Separation and also sets forth ancillary
agreements that govern certain aspects of the company’s relationship with Chemours after the separation. Among other matters,
the Separation Agreement and the ancillary agreements provide for the allocation between DuPont and Chemours of assets,
employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities)
attributable to periods prior to, at and after the completion of the Separation.
Pursuant to the Separation Agreement, Chemours indemnifies DuPont against certain litigation, environmental, workers'
compensation and other liabilities that arose prior to the distribution. The term of this indemnification is indefinite and includes
defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition
of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. At
December 31, 2015, the indemnified assets are $99 within accounts and notes receivable, net and $394 within other assets along
with the corresponding liabilities of $99 within other accrued liabilities and $394 within other liabilities.
Tax Matters Agreement
The company and Chemours entered into a Tax Matters Agreement that governs the parties’ respective rights, responsibilities and
obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits
and other tax proceedings and other matters regarding taxes. In general, under the agreement, the company is responsible for any
U.S. federal, state and local taxes (and any related interest, penalties or audit adjustments) reportable on a consolidated, combined
or unitary return that includes the company or any of its subsidiaries (and Chemours and/or any of its subsidiaries) for any periods
or portions thereof ending on or prior to the date of the Separation and Chemours is responsible for any U.S. federal, state, local
and foreign taxes (and any related interest, penalties or audit adjustments) that are imposed on Chemours and/or any of its
subsidiaries for all tax periods, whether before or after the date of the distribution. Neither party’s obligations under the agreement
are limited in amount or subject to any cap. Additionally, Chemours generally agrees to indemnify DuPont and its affiliates against
any and all tax-related liabilities incurred by them relating to the distribution and certain other aspects of the separation to the
extent caused by an acquisition of Chemours’ stock or assets or by certain other action undertaken by Chemours.