DuPont 2005 Annual Report Download - page 75

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E. I. du Pont de Nemours and Company
Notes to Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
The net assets sold to Koch consisted of the following:
April 30,
2004
Cash and cash equivalents $75
Accounts and notes receivable 1,094
Inventories 645
Property, plant and equipment (net) 3,132
Other intangible assets (net) 181
Investment in affiliates 231
Prepaid expenses and other assets 150
Assets $5,508
Accounts payable $ 552
Borrowings and capital lease obligations 370
Deferred tax liability 252
Other liabilities 386
Minority interests 37
Liabilities $1,597
During 2005 additional equity affiliates with a book value of $84 were transferred to Koch.
In 2003, the company recorded a charge of $1,620 related to the planned separation of Textiles & Interiors. The company wrote
down the assets to be sold to estimated fair value and recorded separation charges as follows: property, plant and equipment
of $1,168, intangible assets of $57 (excluding goodwill), equity affiliates of $293, a pension curtailment loss of $78, and other
separation charges of $24. The write-downs were based on estimated fair values as determined through a combination of
negotiations to sell the assets and cash flow projections.
The company indemnified Koch against certain liabilities primarily related to taxes, legal matters, environmental matters, and
representations and warranties. The fair value of these indemnities is $70 and is included in the indemnification liability
balance (see Note 24). Under the definitive agreement, the company’s total indemnification obligation for the majority of the
representations and warranties cannot exceed approximately $1,400. The remaining indemnities are not limited to this maximum
payment amount.
In January 2006, the company completed the sale of its interest in the last equity affiliate to its equity partner for proceeds of
$14 thereby completing the sale of all of the net assets of Textiles & Interiors.
6. Goodwill Impairment–Textiles & Interiors
In 2003, in connection with the pending sale of INVISTA, the company was required to test the related goodwill for recover-
ability. This test indicated that the carrying value of goodwill exceeded its fair value, and accordingly, the company recorded
an impairment charge of $295 to write off all of the associated goodwill. This write-off was based on an estimate of fair value
as determined by the negotiated sales price of the INVISTA net assets.
7. Gain on Sale of Interest by Subsidiary–Nonoperating
In April 2003, the company formed a majority-owned venture, The Solae Company, with Bunge Limited, comprised of the
company’s protein technologies business and Bunge’s North American and European ingredients operations. As a result of this
transaction, the company’s ownership interest in the protein technologies business was reduced from 100 percent to 72 per-
cent. The company recorded a nonoperating pretax gain of $62, as the fair market value of the businesses contributed by
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