DuPont 2006 Annual Report Download - page 78

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3. OTHER INCOME, NET
2006 2005 2004
Cozaar»/Hyzaar»licensing income $ 815 $ 747 $ 675
Royalty income 120 130 151
Interest income, net of miscellaneous interest expense 219 244 188
Equity in earnings (losses) of affiliates (Note 13) 50 108 (39)
Net gains on sales of assets 55 82 28
Net exchange gains (losses) 16 423 (391)
Miscellaneous income and expenses-net 286 118 43
$1,561 $1,852 $ 655
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the
foreign currency-denominated monetary assets and liabilities of its operations. The objective of this program is
to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax
basis, the effects of exchange rate changes. The net pretax exchange gains and losses are largely offset by the
associated tax impact.
Miscellaneous income and expenses-net, principally includes sales of technology and intangible assets,
insurance recoveries, litigation settlements and other miscellaneous items. In 2006, the company recognized
$76 of insurance recoveries from its insurance carriers of which $15 related to Hurricane Katrina and $61
related to costs and settlements paid by the company over the past twenty years with regard to asbestos
litigation. All asbestos proceeds are reflected in Cash provided by operating activities within the company’s
Statements of Cash Flows.
4. INTEREST EXPENSE
2006 2005 2004
Interest incurred $497 $541 $379
Interest capitalized (37) (23) (17)
$460 $518 $362
5. RESTRUCTURING ACTIVITIES
2006 Activities
During 2006, the company initiated restructuring actions within its Agriculture & Nutrition and Coatings &
Color Technologies segments to improve the company’s global competitiveness. As a result, a net charge of
$326 was recorded in Cost of goods sold and other operating charges for employee separation and asset
writedowns. Further details are discussed below. At December 31, 2006, total liabilities relating to current and
prior years restructuring activities were $177.
Agriculture & Nutrition
During the fourth quarter 2006, the Agriculture & Nutrition platform launched plans to re-deploy capital and
resources within various segments of the business. The plans include the closing or streamlining of
manufacturing units at about twelve sites and the reduction of approximately 1,500 positions globally, with
most of the changes expected to be completed in 2007. Restructuring charges resulting from the plans totaled
F-15
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)