DuPont 2006 Annual Report Download - page 10

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Item 1A. Risk Factors, continued
In the ordinary course of business, the company may make certain commitments, including representations,
warranties and indemnities relating to current and past operations, including those related to divested
businesses and issue guarantees of third party obligations. If the company were required to make payments as
a result, they could exceed the amounts accrued, thereby adversely affecting the company’s results of
operations.
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 cleanup costs, third-party property damage or personal injury claims. 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 allegation, 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.
The company’s ability to generate sales from genetically enhanced products, particularly seeds and other
agricultural products, could be adversely affected by market acceptance, government policies, rules or
regulations and competition.
The company is using biotechnology to create and improve products, particularly in its Agriculture &
Nutrition segment. Demand for these products could be affected by market acceptance of genetically modified
products as well as governmental policies, laws and regulations that affect the development, manufacture and
distribution of products, including the testing and planting of seeds containing biotechnology traits and the
import of crops grown from those seeds.
The company competes with major global companies that have strong intellectual property estates supporting
the use of biotechnology to enhance products, particularly in the agricultural products and production markets.
Speed in discovering and protecting new technologies and bringing products based on them to market is a
significant competitive advantage. Failure to predict and respond effectively to this competition could cause
the company’s existing or candidate products to become less competitive, adversely affecting sales.
Changes in government policies and laws or worldwide economic conditions could adversely affect the
company’s financial results.
Sales outside the U.S. constitute more than half of the company’s revenue. The company anticipates that
international sales will continue to represent a substantial portion of its total sales and that continued growth
and profitability will require further international expansion. The company’s financial results could be affected
by changes in trade, monetary and fiscal policies, laws and regulations, or other activities of U.S. and
non-U.S. governments, agencies and similar organizations. These conditions include but are not limited to
changes in a country’s or region’s economic or political conditions, trade regulations affecting production,
pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual
property rights in some countries, changes in the regulatory or legal environment, restrictions on currency
exchange activities, burdensome taxes and tariffs and other trade barriers. International risks and uncertainties,
including changing social and economic conditions as well as terrorism, political hostilities and war, could
lead to reduced international sales and reduced profitability associated with such sales.
10
Part I