DuPont 2008 Annual Report Download - page 81

18. OTHER LIABILITIES
December 31, 2008 2007
Employee benefits:
Accrued other long-term benefit costs (Note 21) $ 3,742 $3,481
Accrued pension benefit costs (Note 21) 5,168 1,663
Accrued environmental remediation costs 289 273
Miscellaneous 1,970 1,838
$11,169 $7,255
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 specifications. The company’s product warranty liability as of
December 31, 2008 and 2007 was $24 and $23, respectively. Estimates for warranty costs are based on historical
claims experience.
Indemnifications
In connection with acquisitions and divestitures, the company has indemnified respective parties against certain
liabilities that may arise in connection with these transactions and business activities prior to the completion of the
transaction. The term of these indemnifications, which typically pertain to environmental, tax and product liabilities,
is generally indefinite. In addition, the company indemnifies its duly elected or appointed directors and officers to the
fullest extent permitted by Delaware law, against liabilities incurred as a result of their activities for the company, such
as adverse judgments relating to litigation matters. If the indemnified party were to incur a liability or have a liability
increase as a result of a successful claim, pursuant to the terms of the indemnification, the company would be
required to reimburse the indemnified party. The maximum amount of potential future payments is generally
unlimited. The carrying amount recorded for all indemnifications as of December 31, 2008 and December 31, 2007
was $110 and $101, respectively. Although it is reasonably possible that future payments may exceed amounts
accrued, due to the nature of indemnified items, it is not possible to make a reasonable estimate of the maximum
potential loss or range of loss. No assets are held as collateral and no specific recourse provisions exist.
In connection with the 2004 sale of the majority of the net assets of Textiles and Interiors, the company indemnified
the purchasers, subsidiaries of Koch Industries, Inc. (INVISTA), against certain liabilities primarily related to taxes,
legal and environmental matters and other representations and warranties under the Purchase and Sale
Agreement. The estimated fair value of the indemnity obligations under the Purchase and Sale Agreement was
$70 and was included in the indemnifications balance of $110 at December 31, 2008. Under the Purchase and Sale
Agreement, the company’s total indemnification obligation for the majority of the representations and warranties
cannot exceed $1,400. The other indemnities are not subject to this limit. In March 2008, INVISTA filed suit in the
Southern District of New York alleging that certain representations and warranties in the Purchase and Sale
Agreement were breached and, therefore, that DuPont is obligated to indemnify it. DuPont disagrees with the extent
and value of INVISTA’s claims. DuPont has not changed its estimate of its total indemnification obligation under the
Purchase and Sale Agreement as a result of the lawsuit.
Obligations for Equity Affiliates & Others
The company has directly guaranteed various debt obligations under agreements with third parties related to equity
affiliates, customers, suppliers and other affiliated and unaffiliated companies. At December 31, 2008, the company
had directly guaranteed $605 of such obligations, and $121 relating to guarantees of historical obligations for
divested subsidiaries. This represents the maximum potential amount of future (undiscounted) payments that the
F-25
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)