DuPont 2006 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2006 DuPont annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

$194, including $64 for severance payments and $130 principally for asset impairments, primarily related to
definite-lived intangible assets whose remaining useful lives were reduced, abandoned technology and other
non-personnel charges. Essentially all employee terminations and cash payments related to this plan will begin
during the first quarter 2007.
Coatings & Color Technologies
A business transformation plan was instituted during the first quarter 2006 within the Coatings & Color
Technologies segment to better serve the company’s customers and improve profitability. The plan includes the
elimination of 1,700 positions. Restructuring charges resulting from the plan totaled $135, including $123
related to severance payments primarily in Europe and the U.S. for approximately 1,300 employees involved in
manufacturing, marketing, administrative and technical activities. In connection with this program, a
$12 charge was also recorded related to exit costs of non-strategic assets. As of December 31, 2006, about
800 employees were separated from the company and approximately 360 were redeployed. Cash payments net
of exchange impact on the reserve, related to these separations were about $28 as of December 31, 2006.
Essentially all employees are expected to be off the rolls by fourth quarter 2007. During 2006, there was a
change to the initial estimate related to reserves established for restructuring initiatives recorded in the first
quarter 2006. The change in estimate resulted in a $3 credit to income in the fourth quarter of 2006.
Both the Agriculture & Nutrition and Coatings & Color Technologies programs encompass redeployment of
employees in excess positions to the extent possible.
Account balances and activity for the 2006 restructuring programs are summarized below:
Write-down
of Assets
Employee
Separation
Costs Total
Net charges to income in 2006 $ 142 $184 $ 326
Charges to accounts
Cash payments and other (32) (32)
Asset write-offs (142) (142)
Balance at December 31, 2006 $ — $152 $ 152
2005 Activities
During 2005, the company did not institute any significant restructuring programs. In 2005, payments of $133
were made to separated employees associated with the 2004 program.
Benefits of $13 were recorded in Cost of goods sold and other operating charges in 2005 for changes in
estimates related to restructuring initiatives undertaken in prior years. This benefit consisted of $9 to reflect
lower estimated benefit settlements to separate employees related to the 2004 restructuring programs and $4
primarily for lower estimated employee separation settlements for prior year programs.
2004 Activities
During 2004, the company recorded a net charge of $411 in Cost of goods sold and other operating charges
for employee separation costs and asset impairment charges. This charge included net expenses of $302
related to cost reduction initiatives taken to align resources and to adjust the company’s infrastructure
following the sale of INVISTA (see Note 6), asset impairment charges which totaled $121 and credits of $12
related to changes in estimates associated with restructuring activities for 2002 and prior year programs. The
F-16
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)