DuPont 2006 Annual Report Download - page 101

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21. STOCKHOLDERS’ EQUITY
The company’s Board of Directors authorized a $2 billion share buyback plan in June 2001. During 2005, the
company purchased and retired 9.9 million shares at a total cost of $505. During 2006, there were no
purchases of stock under this program. As of December 31, 2006 and 2005, the company has purchased
20.5 million shares at a total cost of $962. Management has not established a timeline for the buyback of the
remaining stock under this plan.
In addition to the plan described above, in October 2005 the Board of Directors authorized a $5 billion share
buyback plan. The company entered into an accelerated share repurchase agreement with Goldman Sachs &
Co. (Goldman Sachs) under which the company purchased and retired 75.7 million shares of DuPont’s
outstanding common stock from Goldman Sachs on October 27, 2005 at a price of $39.62 per share, with
Goldman Sachs purchasing an equivalent number of shares in the open market over the following nine-month
period.
On July 27, 2006, Goldman Sachs completed its purchase of 75.7 million shares of DuPont’s common stock at
a volume weighted average price (VWAP) of $41.99 per share. Upon the conclusion of the agreement in 2006,
the company paid $180 in cash to Goldman Sachs to settle the agreement. The final settlement price was
based upon the difference between the VWAP per share for the nine-month period, which ended July 27, 2006,
and the purchase price of $39.62 per share. The amount paid to settle the contract was recorded as a reduction
to Additional paid-in capital during the third quarter 2006. In addition, the company made open market
purchases of its shares in the third quarter for $100 at an average price of $42.27 per share, bringing
purchases to date under the $5 billion share buyback plan to $3.3 billion.
The company anticipates completing the remaining $1.7 billion of the program, consistent with its financial
discipline principles, by the end of 2007.
Set forth below is a reconciliation of common stock share activity for the three years ended December 31, 2006:
Shares of common stock Issued
Held In
Treasury
Balance January 1, 2004 1,084,325,552 (87,041,427)
Issued 7,656,496 —
Treasury stock
Acquisition — (10,600,000)
Retirement (10,600,000) 10,600,000
Balance December 31, 2004 1,081,382,048 (87,041,427)
Issued 10,933,652 —
Treasury stock
Acquisition — (85,664,134)
Retirement (85,664,134) 85,664,134
Balance December 31, 2005 1,006,651,566 (87,041,427)
Issued 4,823,253 —
Treasury stock
Acquisition — (2,365,683)
Retirement (2,365,683) 2,365,683
Balance December 31, 2006 1,009,109,136 (87,041,427)
F-38
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)