ADT 2005 Annual Report Download - page 91

residential or office construction or other factors can cause a drop in demand for certain of our
products sold by Engineered Products and Services.
Our operations expose us to the risk of material environmental liabilities, litigation and violations.
We are subject to numerous foreign, federal, state and local environmental protection and health
and safety laws governing, among other things:
• the generation, storage, use and transportation of hazardous materials;
• emissions or discharges of substances into the environment; and
• the health and safety of our employees.
There can be no assurances that we have been or will be at all times in compliance with environmental
and health and safety laws. If we violate these laws, we could be fined, criminally charged or otherwise
sanctioned by regulators.
Certain environmental laws assess liability on current or previous owners or operators of real
property for the cost of removal or remediation of hazardous substances at their properties or at
properties at which they have disposed of hazardous substances. In addition to cleanup actions brought
by governmental authorities, private parties could bring personal injury or other claims due to the
presence of, or exposure to, hazardous substances.
We have received notification from the United States Environmental Protection Agency and from
state environmental agencies, that conditions at a number of sites where we and others disposed of
hazardous substances require cleanup and other possible remedial action and may require that we
reimburse the government or otherwise pay for the cost of cleanup of those sites and/or for natural
resource damages. We have projects underway at a number of current and former manufacturing
facilities to investigate and remediate environmental contamination resulting from past operations.
These projects relate to a variety of activities, including:
• radioactive materials decontamination and decommissioning;
• solvent, metal and other hazardous substance contamination cleanup; and
• oil spill equipment upgrades and replacement.
These projects involve both remediation expenses and capital improvements. In addition, we
remain responsible for certain environmental issues at manufacturing locations previously sold by us.
The ultimate cost of cleanup at disposal sites and manufacturing facilities is difficult to predict
given uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws
and regulations and alternative cleanup methods. Based upon our experience, current information and
applicable laws, we believe that it is probable that we would incur remedial costs (including asset
retirement obligations) of approximately $284 million, of which $34 million is included in accrued
expenses and other current liabilities and $250 million is included in other long-term liabilities on the
Consolidated Balance Sheets. Environmental laws are complex, change frequently and have tended to
become more stringent over time. While we have budgeted for future capital and operating
expenditures to maintain compliance with such laws, we cannot provide assurance that our costs of
complying with current or future environmental protection and health and safety laws, or our liabilities
arising from past or future releases of, or exposures to, hazardous substances will not exceed our
estimates or adversely affect our financial condition and results of operations or that we will not be
subject to additional environmental claims for personal injury or cleanup in the future based on our
past, present or future business activities.
2005 Financials 15