DuPont 2006 Annual Report Download - page 80

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$302 net charge consisted of accruals for termination payments primarily in North America and Western
Europe for approximately 2,700 employees involved in manufacturing, marketing and sales, administrative and
technical activities, which reduced 2004 segment earnings as follows: Agriculture & Nutrition — $35;
Coatings & Color Technologies — $60; Electronic & Communication Technologies — $41; Performance
Materials — $44; Safety & Protection — $28; and Other — $94. At December 31, 2005, essentially all of the
2,700 employees identified as part of the company’s 2004 program have been removed from the company’s
rolls.
The 2004 charges also include $27 in Electronic & Communication Technologies related to the write-down to
estimated fair value of an investment, due to an other than temporary decline in its value. In addition, the
company recorded a $23 charge in Performance Materials associated with the shutdown of certain
U.S. manufacturing assets in connection with the company’s exit from the dimethyl terephthalate (DMT)
business. This charge covers the net book value of the DMT assets.
The company also recorded a $42 charge in 2004 to reduce the carrying value of certain European
manufacturing assets in Safety & Protection to estimated fair value. As a result of ongoing competitive
pressures and a shift in the company’s global sourcing of product during the second quarter 2004, the company
determined that expected cash flows were not sufficient to recover the carrying value of these assets. Fair
value of the assets was based on the assets’ expected discounted cash flows. In addition, the company recorded
a charge of $29 in Other to write off the net book value of certain patents and purchased technology. Due to
changes in the associated manufacturing process and executed supply agreements in 2004, these abandoned
assets were determined to be of no future value to the company.
Account balances and activity for the 2004 restructuring program are summarized below:
Write-down
of Assets
Employee
Separation
Costs Total
Net charges to income in 2004 $ 121 $ 302 $ 423
Charges to accounts
Employee separation settlements (129) (129)
Facility shutdowns and asset write-offs (121) (121)
Balance at December 31, 2004 $ — $ 173 $ 173
Credits to income in 2005 (9) (9)
Employee separation settlements (133) (133)
Balance at December 31, 2005 $ — $ 31 $ 31
Credits to income in 2006 (4) (4)
Employee separation settlements (14) (14)
Balance at December 31, 2006 $ — $ 13 $ 13
Other Activities
During 2002, the company implemented activities involving employee separation and write-downs of assets. In
2006, payments of $4 were made to separated employees associated with this program. A benefit of $1 was
recorded in 2006 for a change in the estimate related to the 2002 restructuring initiative. The remaining
liability balance for the 2002 program at December 31, 2006 was $12 and represents payments to be made
over time to separated employees.
F-17
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)