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2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
¥ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
nTRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-815
E. I. DU PONT DE NEMOURS
AND COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
51-0014090
(I.R.S. Employer Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant’s telephone number, including area code: 302-774-1000
Securities registered pursuant to Section 12(b) of the Act
(Each class is registered on the New York Stock Exchange, Inc.):
Title of Each Class
Common Stock ($.30 par value)
Preferred Stock
(without par value-cumulative)
$4.50 Series
$3.50 Series
No securities are registered pursuant to Section 12(g) of the Act.
Indicate by check mark whether the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities
Act). Yes ¥No n
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes nNo ¥
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¥No n
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. n
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act. (Check one).
Large accelerated filer ¥Accelerated filer nNon-accelerated filer nSmaller reporting company n
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes nNo ¥
The aggregate market value of voting stock held by nonaffiliates of the registrant (excludes outstanding shares beneficially
owned by directors and officers and treasury shares) as of June 30, 2007, was approximately $46.6 billion.
As of January 31, 2008, 899,346,000 shares (excludes 87,041,000 shares of treasury stock) of the company’s common stock,
$.30 par value, were outstanding.
Documents Incorporated by Reference
(Specific pages incorporated are indicated under the applicable Item herein):
Incorporated
By Reference
In Part No.
The company’s Proxy Statement in connection with the Annual Meeting of Stockholders to be held on April 30, 2008 . . . . III

Table of contents

  • Page 1
    ...smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes n No ¥ The aggregate market value of voting stock held by nonaffiliates of the registrant (excludes outstanding shares beneficially owned by directors and officers...

  • Page 2
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  • Page 3
    ... Information Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services...

  • Page 4
    ...& Color Technologies Electronic & Communication Technologies Performance Materials Safety & Protection Pharmaceuticals Other Geographic Information - Net sales and Net property Segment sales, Net sales, Pretax operating income and Segment net assets 27 27 27 29 30 31 33 34 34 F-45 F-46 The company...

  • Page 5
    ... the company with global human resources transactional services including employee development, workforce planning, compensation management, benefits administration and payroll. As of December 31, 2007, some of the services associated with this contract are in place and are operating. All services...

  • Page 6
    ...distributors. Pioneer» brand products are promoted through multiple marketing channels in North America. In the corn and soybean markets of the U.S. Corn Belt, products are sold through a specialized force of independent sales representatives. In other North American markets, Pioneer» products are...

  • Page 7
    ... in India. The center, which is located in Hyderabad, is expected to be fully operational in early 2008. The objectives of the company's research and development programs are to create new technologies, processes and business opportunities in relevant fields, as well as to improve existing products...

  • Page 8
    ... Analysis of Financial Condition and Results of Operations, on page 21 of this report. Facility Security DuPont recognizes that the security and safety of its operations are critical to its employees, neighbors and, indeed, to the future of the company. As such, the company has merged chemical site...

  • Page 9
    ... claims. The company has noted a nationwide trend in purported class actions against chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation and punitive damages arising from alleged environmental torts without claiming present personal...

  • Page 10
    ... 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...

  • Page 11
    ... prices. Because the company has significant international operations, there are a large number of currency transactions that result from international sales, purchases, investments and borrowings. The company actively manages currency exposures that are associated with monetary asset positions...

  • Page 12
    ... The company's corporate headquarters are located in Wilmington, Delaware. The company's manufacturing, processing, marketing and research and development facilities, as well as regional purchasing offices and distribution centers are located throughout the world. Information regarding research and...

  • Page 13
    ... owned by the company; however, certain properties are leased. No title examination of the properties has been made for the purpose of this report and certain properties are shared with other tenants under long-term leases. ITEM 3. LEGAL PROCEEDINGS Litigation Benlate» Information related to this...

  • Page 14
    ... are negotiating with the EPA and U.S. Department of Justice (DOJ). Pascagoula, Mississippi In October 2002, the First Chemical Corporation (FCC) plant in Pascagoula, Mississippi experienced an explosion at one of its process units - the mononitrotoluene unit - Still Number 1 (MNT Still). The unit...

  • Page 15
    ... research and plant technical leadership roles, as well as product management and business director roles. Mr. Connelly served as vice president and general manager-DuPont Fluoroproducts from 1999 until September 2000, when he was named senior vice president and chief science and technology officer...

  • Page 16
    ... was named Executive Vice President - DuPont Finance and Chief Financial Officer. Ellen J. Kullman joined DuPont in 1988 as marketing manager and progressed through various roles as global business director and was named vice president and general manager of White Pigment & Mineral Products in 1995...

  • Page 17
    Part II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Registrant's Common Equity and Related Stockholder Matters The company's common stock is listed on the New York Stock Exchange, Inc. (symbol DD) and certain non...

  • Page 18
    ... Dow Chemical Company; Eastman Kodak Company; Ford Motor Company; General Electric Company; Hewlett-Packard Company; Minnesota Mining and Manufacturing Company; Monsanto Company; Motorola, Inc.; PPG Industries, Inc.; Rohm and Haas Company; and United Technologies Corporation. Stock Performance Graph...

  • Page 19
    ...common stock Income before cumulative effect of changes in accounting principles Net income Financial position at year-end Working capital Total assets Borrowings and capital lease obligations Short-term Long-term Stockholders' equity General For the year Purchases of property, plant & equipment and...

  • Page 20
    ... segment. Springboard position in emerging markets - The company's rapid top line growth in emerging markets is a key factor in counter-balancing softness in the North American automotive and U.S. housing markets. Business unit leaders in the Performance Materials, Coatings & Color Technologies and...

  • Page 21
    ... demand for the company's products related to housing and automotive production markets. Sales in Canada and Latin America increased 15 percent, primarily due to a 10 percent volume increase reflecting a substantial increase in sales of seed and crop protection products in South America. The table...

  • Page 22
    ...benefit of $128 million in insurance recoveries. The 2006 restructuring programs included the elimination of approximately 3,200 positions and redeployment of about 400 employees in excess positions to the extent possible. The company recorded a net charge of $326 million in 2006 related to employee...

  • Page 23
    ... Technologies - $116 million; Performance Materials - $17 million; and Safety & Protection - $27 million. The company recorded a net charge of $326 million in 2006 related to employee separation costs and asset impairment charges as discussed above. In 2005, the company evaluated capital investment...

  • Page 24
    ... million of tax expense on exchange gains associated with the company's policy of hedging the foreign currency denominated monetary assets and liabilities of its operations and $292 million of tax expense related to the repatriation of $9.1 billion under The American Jobs Creation Act of 2004 (AJCA...

  • Page 25
    ... is positive; however, it is moderated by continued weakness in U.S. housing and North American automotive markets and continued escalation of energy, ingredient and transportation costs. Accounting Standards Issued Not Yet Adopted In September 2006, the Financial Accounting Standards Board (FASB...

  • Page 26
    ... company's accounting policies which could have a material effect on the company's financial position, liquidity or results of operations. Long-term Employee Benefits Accounting for employee benefit plans involves numerous assumptions and estimates. Discount rate and expected return on plan assets...

  • Page 27
    ... key assumptions with respect to the company's pension and other long-term employee benefit plans, based on assets and liabilities at December 31, 2007: 1/2 Percentage Point Increase 1/2 Percentage Point Decrease (Dollars in millions) Discount Rate Expected rate of return on plan pension assets...

  • Page 28
    Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued Legal Contingencies The company's results of operations could be affected by significant litigation adverse to the company, including product liability claims, patent infringement claims ...

  • Page 29
    ...products of Pioneer are hybrid seed corn and soybean seed. Sales of Pioneer» brand seeds increased 19 percent in 2007 with gains in corn seed sales globally, partially offset by lower North American soybean seed sales on a decline in North American planted acreage. In 2007, farmers in North America...

  • Page 30
    ... traits and seed treatments in the U.S. and Canada. Pioneer will build on their North American product offerings with the addition of approximately 30 new soybean varieties and 60 new Pioneer» brand corn hybrids. In international operations, Pioneer expects continued market share gains supported...

  • Page 31
    ... & Color Technologies is one of the world's leading automotive coatings suppliers and the world's largest manufacturer of titanium dioxide white pigments. Products offered include high performance liquid and powder coatings for automotive OEMs, the automotive aftermarket and general industrial...

  • Page 32
    Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued $116 million related to the clean-up and restoration of manufacturing operations, as well as the write-off of inventory and plant assets that were destroyed by hurricanes. Outlook Sales ...

  • Page 33
    ... their customers' offerings. Performance Materials delivers a broad polymer-based materials product portfolio, including thermoplastic and thermoset engineering polymers that are primarily used by customers to fabricate components for mechanical and electrical systems, as well as specialized resins...

  • Page 34
    Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued On June 30, 2005, DuPont completed a transaction with Dow related to DuPont Dow Elastomers LLC (DDE), a 50/50 joint venture. Dow acquired from DDE certain assets related to the Engage», ...

  • Page 35
    ..., the surfaces protection businesses continue to offer new products that meet demand for sustainable solutions. In 2007, DuPont announced a $500 million investment at its Cooper River site near Charleston, SC, to significantly expand production of DuPontTM Kevlar» brand fiber for industrial...

  • Page 36
    ... pricing gains and tight fixed cost control. 2006 PTOI included a $47 million asset impairment charge related to an industrial chemical asset held for sale, partially offset by a $33 million benefit from insurance proceeds. Outlook Safety & Protection will continue to drive growth in its product...

  • Page 37
    ... and long-term debt markets and asset sales. The company's current strong financial position, liquidity and credit ratings provide excellent access to the capital markets. Pursuant to its cash discipline policy, the company seeks first to maintain a strong balance sheet and second, to return excess...

  • Page 38
    ...II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued The company's long term and short term credit ratings have not changed over the last three year ends and are as follows: Long term Short term Outlook Standard & Poor Moody's Investor Services...

  • Page 39
    ... fourth quarter 1904. 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 million. During 2007 and 2006, there were no purchases of stock under this program. As of December...

  • Page 40
    ... it has the financial resources to satisfy these guarantees. Master Operating Leases At December 31, 2007, the company has one master operating lease program relating to miscellaneous short-lived equipment valued at approximately $119 million. Lease payments for these assets totaled $59 million...

  • Page 41
    ... obligations Information technology infrastructure & services Raw material obligations Utility obligations INVISTA-related obligations 3 Human resource services Other 4 Total purchase obligations Other liabilities Workers' compensation Asset retirement obligations Environmental remediation Legal...

  • Page 42
    Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued Long-Term Employee Benefits The company has various obligations to its employees and retirees. The company maintains retirement-related programs in many countries that have a long-term ...

  • Page 43
    ... Medicare prescription drug program. The company's key assumptions used in calculating its pension and other long-term employee benefits are the expected return on plan assets, the rate of compensation increases and the discount rate (see Note 21 to the Consolidated Financial Statements). For 2008...

  • Page 44
    ... conduct screening level health and environmental effects testing on nearly 3,000 high production volume (HPV) chemicals or to make equivalent information publicly available. An HPV chemical is a chemical listed on the 1990 Inventory Update Rule with annual U.S. cumulative production and imports of...

  • Page 45
    ... generated at DuPont's production plants becomes associated with process solid wastes that are disposed in controlled landfills where public exposure is negligible. A multi-year research and process engineering development program has culminated in capital projects and other process modifications...

  • Page 46
    Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued company of remediation at those sites and at all CERCLA sites in the aggregate, is not expected to have a material impact on the financial position, liquidity or results of operations of ...

  • Page 47
    ... the Washington Works site located in Parkersburg, West Virginia. DuPont is required under the agreement to offer to install water treatment systems or an EPA-approved alternative if PFOA levels are detected at or above 0.5 ppb. In February 2007, the New Jersey Department of Environmental Protection...

  • Page 48
    ... currency-denominated monetary assets and liabilities of its operations. The primary business objective of this hedging program is to maintain an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes, net of related tax effects...

  • Page 49
    ... a target range of floating rate debt. Commodity Price Risk The company enters into over-the-counter and exchange-traded derivative commodity instruments to hedge its exposure to price fluctuations on certain raw material purchases. A portion of energy feedstock purchases are hedged to reduce...

  • Page 50
    ...of December 31, 2007, the company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), together with management, conducted an evaluation of the effectiveness of the company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that...

  • Page 51
    ...Analysis," "Summary Compensation Table," " Grants of Plan-Based Awards," "Outstanding Equity Awards," "Option Exercises and Stock Vested," "Retirement Plan Benefits," "Nonqualified Deferred Compensation," "Employment Agreements," and "Directors' Compensation." Information related to the Compensation...

  • Page 52
    ... in the sections entitled "DuPont Board of Directors: Corporate Governance Guidelines," "Guidelines for Determining the Independence of DuPont Directors," "Committees of the Board" and "Committee Membership." ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information with respect to this Item...

  • Page 53
    ... Statement Schedules listed under SEC rules but not included in this report are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto incorporated by reference. Condensed financial information of the parent company is...

  • Page 54
    ... to Exhibit 10.1 to the company's Quarterly Report on Form 10-Q for the period ended June 30, 2007). Terms and conditions of time-vested restricted stock units granted in 2007 to non-employee directors under the company's Stock Accumulation and Deferred Compensation Plan, as amended, or Equity and...

  • Page 55
    ... Savings Restoration Plan adopted effective January 1, 2007 (incorporated by reference to Exhibit 10.12 to the company's Annual Report on Form 10-K for the period ended December 31, 2006). Company's Retirement Income Plan for Directors, as last amended August 1995. Letter Agreement and Employee...

  • Page 56
    ... DE NEMOURS AND COMPANY By: /s/ J. L. KEEFER J. L. Keefer Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 57
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  • Page 58
    ... de Nemours and Company Index to the Consolidated Financial Statements Page(s) Consolidated Financial Statements: Management's Reports on Responsibility for Financial Statements and Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Income...

  • Page 59
    ...other financial information contained in this Annual Report on Form 10-K. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and are considered by management to present fairly the company's financial position...

  • Page 60
    ... and financial statement schedule and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform...

  • Page 61
    ... The Year Ended December 31, 2007 2006 2005 Net sales Other income, net Total Cost of goods sold and other operating charges Selling, general and administrative expenses Amortization of intangible assets Research and development expense Interest expense Separation activities - Textiles & Interiors...

  • Page 62
    ...current assets Property, plant and equipment Less: Accumulated depreciation Net property, plant and equipment Goodwill Other intangible assets Investment in affiliates Other assets Total Liabilities and Stockholders' Equity Current liabilities Accounts payable Short-term borrowings and capital lease...

  • Page 63
    ... comprehensive income Common dividends ($1.52 per share) Preferred dividends Common stock Issued - compensation plans Repurchased Retired Adjustment to initially apply uncertainty in income taxes standard Balance December 31, 2007 $237 $237 $237 $237 Common Stock $324 Reinvested Earnings $10,182...

  • Page 64
    ... by operating activities Investing activities Purchases of property, plant and equipment Investments in affiliates Payments for businesses - net of cash acquired Proceeds from sale of assets - net of cash sold Net (increase) decrease in short-term financial instruments Forward exchange contract...

  • Page 65
    ... and Company Notes to the Consolidated Financial Statements (Dollars in millions, except per share) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DuPont follows generally accepted accounting principles in the United States of America (GAAP). The significant accounting policies described below...

  • Page 66
    ... Other assets include long-term investments in securities, which comprise investments for which market values are not readily available (cost investments) and available-for-sale securities that are reported at fair value (see Note 13). Inventories The majority of the company's inventories are valued...

  • Page 67
    ... incurred. Insurance/Self-Insurance The company self-insures certain risks where permitted by law or regulation, including workers' compensation, vehicle liability and employee related benefits. Liabilities associated with these risks are estimated in part by considering historical claims experience...

  • Page 68
    ... exchange rates in effect during the period. Variable Interest Entities (VIEs) The company consolidates VIEs where DuPont is considered the primary beneficiary. At December 31, 2007, the assets, liabilities and operations of these entities are not material to the Consolidated Financial Statements...

  • Page 69
    ... not have a material effect on the company's financial position, liquidity or results of operations. In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007) "Business Combinations" (SFAS 141R) which replaces FASB Statement No. 141. SFAS 141R addresses the...

  • Page 70
    ..., 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...

  • Page 71
    ... 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, 2007, essentially all positions identified as a part of the company's 2006...

  • Page 72
    ... local International Provision for income taxes Stockholders' equity: Stock compensation 1 Net revaluation and clearance of cash flow hedges to earnings 2 Net unrealized (losses) gains on securities 2 Minimum pension liability 2 Pension benefits Net losses 3 Prior service cost 3 Other benefits Net...

  • Page 73
    ... 31, 2007 and 2006, are as follows: 2007 Asset Liability Asset 2006 Liability Depreciation Accrued employee benefits Other accrued expenses Inventories Unrealized exchange gains Tax loss/tax credit carryforwards/backs Investment in subsidiaries and affiliates Amortization of intangibles Other...

  • Page 74
    ... analysis of the company's effective income tax rate (EITR) follows: 2007 2006 2005 Statutory U.S. federal income tax rate Exchange gains/losses 1 Domestic operations Lower effective tax rates on international operations-net Tax settlements Lower effective tax rate on export sales The American Jobs...

  • Page 75
    ...988,954,000 The weighted-average number of common shares outstanding in 2007 and 2006 declined as a result of the company's repurchase and retirement of its common stock in connection with its $5 billion share buyback plan, which was authorized by the Board of Directors in October 2005. See Note 20...

  • Page 76
    ..., were valued under the FIFO method. Stores and supplies inventories of $259 and $281 at December 31, 2007 and 2006, respectively, were valued under the average cost method. 10. PROPERTY, PLANT AND EQUIPMENT December 31, 2007 2006 Buildings Equipment Land Construction $ 4,111 20,537 426...

  • Page 77
    ... Performance Materials Safety & Protection Other Total $ 461 821 177 422 182 11 $2,074 $ (1) 2 (37) 2 $(34) $ 462 821 175 459 180 11 $2,108 Changes in Goodwill in 2007 resulted from purchase accounting refinements and other acquisitions and divestitures. In 2007, the company performed its annual...

  • Page 78
    ... income tax. Impairment charge of $165 to write down the company's investment in a polyester films joint venture in the Performance Materials segment. As a result, at December 31, 2007, DuPont ceased using the equity method of accounting for three legal entities within the joint venture. 3 4 F-21

  • Page 79
    ... $48 in 2007 and $300 in 2006 were guaranteed by the company. These amounts are included in the guarantees disclosed in Note 19. 13. OTHER ASSETS December 31, 2007 2006 Employee benefits - pension (Note 21) Long-term investments in securities Deferred income taxes (Note 6) Miscellaneous $2,187...

  • Page 80
    ... advance customer payments related to businesses within the Agriculture & Nutrition segment. Miscellaneous other accrued liabilities principally includes accrued plant and operating expenses, accrued litigation costs, employee separation costs in connection with the company's restructuring programs...

  • Page 81
    ..., and $3,094 thereafter. The estimated fair value of the company's long-term borrowings, including interest rate financial instruments, based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities, was $6,000 at...

  • Page 82
    ...Miscellaneous includes asset retirement obligations, litigation accruals, tax contingencies, royalty payables and certain obligations related to divested businesses. 19. COMMITMENTS AND CONTINGENT LIABILITIES Guarantees Product Warranty Liability The company warrants that its products meet standard...

  • Page 83
    ...its operations. The terms for these leased assets vary depending on the lease agreement. As of December 31, 2007, the company had one master operating lease program relating to short-lived equipment. In connection with this master operating lease program, the company had residual value guarantees in...

  • Page 84
    ... share) Asset Retirement Obligations The company has recorded asset retirement obligations primarily associated with closure, reclamation and removal costs for mining operations related to the production of titanium dioxide in Coatings & Color Technologies. The company's asset retirement obligation...

  • Page 85
    ... the Washington Works facility had suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water. The relief sought included damages for medical monitoring, diminution of property values and punitive damages plus injunctive relief to stop releases of PFOA. DuPont and...

  • Page 86
    ... by releases from DuPont's Chambers Works plant in Deepwater, New Jersey. The second was filed in state court on behalf of customers serviced primarily by the Pennsville Township Water Department and was removed to New Jersey federal district court on DuPont's motion. The New Jersey cases have...

  • Page 87
    ..., Delaware, the District of Columbia, Florida, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Missouri, New Jersey, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas and West Virginia. Two of the 23 actions were filed in California. By order of the Judicial Panel...

  • Page 88
    ... trend in purported class actions against chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation and punitive damages arising from alleged environmental torts without claiming present personal injuries. Such cases may allege contamination...

  • Page 89
    ... at prices in excess of current market. 20. STOCKHOLDERS' EQUITY The company's Board of Directors authorized a $2 billion share buyback plan in June 2001. During 2007 and 2006, there were no purchases of stock under this program. During 2005, the company purchased and retired 9.9 million shares at...

  • Page 90
    ... de Nemours and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) Set forth below is a reconciliation of common stock share activity for the three years ended December 31, 2007: Shares of common stock Issued Held In Treasury Balance January...

  • Page 91
    ... insurance policies, or remain unfunded. Other Long-term Employee Benefits The parent company and certain subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors, and disability and life insurance protection to employees. The associated plans for retiree benefits...

  • Page 92
    ... in millions, except per share) Summarized information on the company's pension and other long-term employee benefit plans is as follows: Pension Benefits Obligations and Funded Status at December 31, 2007 2006 Other Benefits 2007 2006 Change in benefit obligation Benefit obligation at beginning of...

  • Page 93
    ... and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) Information for pension plans with projected benefit obligation in excess of plan assets 2007 2006 Projected benefit obligation Accumulated benefit obligation Fair value of plan assets...

  • Page 94
    ...% 4.32% 6.25% 4.50% 5.75% 4.50% Pension Benefits Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2007 2006 Other Benefits 2007 2006 Discount rate Expected return on plan assets Rate of compensation increase 5.56% 8.74% 4.32% 5.43% 8.74...

  • Page 95
    ...) for the asset classes covered by the investment policy and (b) projections of inflation over the long-term period during which benefits are payable to plan participants. For non-U.S. plans, assumptions reflect economic assumptions applicable to each country. Assumed health care cost trend rates at...

  • Page 96
    ... asset liability studies are utilized in this process. U.S. plan assets and a significant portion of non-U.S. plan assets are managed by investment professionals employed by the company. The remaining assets are managed by professional investment firms unrelated to the company. The company's pension...

  • Page 97
    ... of the grant. Using the non-substantive vesting approach in lieu of the nominal vesting approach would not have had a material impact on the company's results of operations. Prior to the adoption of SFAS 123R, the company reported the tax benefit of stock option exercises as operating cash flows...

  • Page 98
    ....35% 3.7% 4.5 The company determines the dividend yield by dividing the current annual dividend on the company's stock by the option exercise price. A historical daily measurement of volatility is determined based on the expected life of the option granted. The risk free interest rate is determined...

  • Page 99
    ...stock units generally vest over periods ranging from two to five years. The company also grants performance-based restricted stock units to senior leadership. Vesting occurs upon attainment of pre-established (i) corporate revenue growth relative to peer companies and (ii) return on invested capital...

  • Page 100
    ... risks associated with these instruments are regularly reported to management. The company hedges foreign currency denominated monetary assets and liabilities, certain business specific foreign currency exposures and certain energy feedstock purchases. In addition, the company enters into exchange...

  • Page 101
    ... a few small risk management programs for agricultural commodities that do not qualify for hedge accounting treatment. Currency Risk The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to monetary assets and liabilities of its operations that are...

  • Page 102
    ... Net Property 2 Net Sales 1 2005 Net Property 2 United States Europe Belgium Germany France Italy Luxembourg The Netherlands Spain United Kingdom Other Total Europe Asia Pacific China/Hong Kong India Japan Taiwan Korea Singapore Other Total Asia Pacific Canada & Latin America Brazil Canada Mexico...

  • Page 103
    ...and solid surfaces); and Pharmaceuticals (representing the company's interest in the collaboration relating to Cozaar»/Hyzaar» antihypertensive drugs, which is reported as Other income). The company operates globally in substantially all of its product lines. In general, the accounting policies of...

  • Page 104
    ...and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) Coatings & Color Technologies Electronic & Communication Technologies Agriculture & Nutrition Performance Materials Safety & Protection Pharmaceuticals Other Total 2007 Segment sales...

  • Page 105
    ... 2005 Depreciation and amortization Equity in earnings of affiliates Affiliate net assets Expenditures for long-lived assets Additional Segment Details 2007 included the following pretax benefits (charges): Performance Materials 1, Other 3 1 2 3 $1,198 (107) 1,079 1,439 $1,209 67 1,249 1,378 $1,187...

  • Page 106
    ... of $160 for damaged facilities, inventory write-offs, clean-up costs and other costs related to the 2005 hurricanes, in the following segments: Coatings & Color Technologies - $116; Performance Materials - $17; and Safety & Protection - $27. Included a $48 gain from the sale of the company's equity...

  • Page 107
    ... a $72 charge for a restructuring program in the Performance Materials segment and a $47 asset impairment charge in the Safety & Protection segment. These charges were partially offset by a $93 benefit resulting from insurance recoveries relating to the damage suffered from Hurricane Katrina in 2005...

  • Page 108
    ... the Internet Financial results, news and other information about DuPont can be accessed from the company's website at http://www.dupont.com . This site includes important information on products and services, financial reports, news releases, environmental information and career opportunities. The...