DuPont 2008 Annual Report Download - page 44

Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, continued
a problem of this scale. The Kyoto Protocol to the United Nations Framework Convention on Climate Change entered
into force in February 2005 and, while not ratified by the U.S., has spurred policy action by many other countries and
regions around the world including the European Union. Considerable international attention is now focused on
development of a post-2012 international policy framework to guide international action to address climate change
when the Kyoto Protocol expires in 2012. Proposed and existing legislative efforts to control or limit greenhouse gas
emissions could affect the company’s energy source and supply choices as well as increase the cost of energy and
raw materials derived from fossil fuels. However, the successful negotiation and implementation of sensible national,
regional, and international climate change policies could provide the business community with greater certainty for
the regulatory future, help guide investment decisions, and drive growth in demand for low-carbon and energy-
efficient products, technologies, and services.
The company actively manages the potential risks that climate change could present, including those associated
with the company’s physical assets, as well as regulatory and economic issues. DuPont looks for opportunities to
make its overall portfolio less energy intensive, and energy use is one factor that is weighed when investments or
divestitures are considered. DuPont is committed to continuing to bring to market more products and services to
meet new and expanded demands of a low-carbon economy.
Remediation Expenditures
The RCRA extensively regulates and requires permits for the treatment, storage and disposal of hazardous waste.
RCRA requires that permitted facilities undertake an assessment of environmental contamination at the facility. If
conditions warrant, companies may be required to remediate contamination caused by prior operations. In contrast
to CERCLA, the costs of the RCRA corrective action program are typically borne solely by the company. The
company anticipates that significant ongoing expenditures for RCRA remediation activities may be required over the
next two decades. Annual expenditures for the near term, however, are not expected to vary significantly from the
range of such expenditures experienced in the past few years. Longer term, expenditures are subject to
considerable uncertainty and may fluctuate significantly. The company’s expenditures associated with RCRA
and similar remediation activities were approximately $51 million, $47 million and $44 million in 2008, 2007 and
2006, respectively.
From time to time, the company receives requests for information or notices of potential liability from the EPA and
state environmental agencies alleging that the company is a PRP under CERCLA or similar state statutes. CERCLA
is often referred to as the Superfund and requires companies to undertake certain investigative and research
activities at sites where it conducts or once conducted operations or where company generated waste has been
disposed. The company has also, on occasion, been engaged in cost recovery litigation initiated by those agencies
or by private parties. These requests, notices and lawsuits assert potential liability for remediation costs at various
sites that typically are not company owned, but allegedly contain wastes attributable to the company’s past
operations.
As of December 31, 2008, the company had been notified of potential liability under CERCLA or state laws at 394
sites around the U.S., with active remediation under way at 151 of these sites. In addition, the company has resolved
its liability at 160 sites, either by completing remedial actions with other PRPs or by participating in “de minimis
buyouts” with other PRPs whose waste, like the company’s, represented only a small fraction of the total waste
present at a site. The company received notice of potential liability at five new sites during 2008 compared with six
similar notices in 2007 and 2006. The company’s expenditures associated with CERCLA and similar state
remediation activities were approximately $17 million, $20 million and $19 million in 2008, 2007 and 2006,
respectively.
For nearly all Superfund sites, the company’s potential liability will be significantly less than the total site remediation
costs because the percentage of waste attributable to the company versus that attributable to all other PRPs is
relatively low. Other PRPs at sites, where the company is a party, typically have the financial strength to meet their
obligations and, where they do not, or where PRPs cannot be located, the company’s own share of liability has not
materially increased. There are relatively few sites where the company is a major participant and the cost to the
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 the company.
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Part II