ADT 2009 Annual Report Download - page 109

If any party responsible for such liabilities were to default in its payment, when due, of any of
these assumed obligations, each non-defaulting party would be required to pay equally with any other
non-defaulting party the amounts in default. Accordingly, under certain circumstances, we may be
obligated to pay amounts in excess of our agreed-upon share of the assumed obligations related to such
contingent and other corporate liabilities including associated costs and expenses.
We could face product liability and asbestos claims relating to products we manufacture or install. These
claims could result in significant costs and liabilities and reduce our profitability.
We face exposure to product liability claims in the event that any of our products results in personal
injury or property damage. In addition, if any of our products prove to be defective, we may be required to
recall or redesign such products, which could result in significant unexpected costs. We have been named in
a significant number of lawsuits alleging damages based on claims that individuals were exposed to asbestos
through the past distribution of asbestos-containing industrial products. Any insurance we maintain may not
be available on terms acceptable to us or such coverage may not be adequate for liabilities actually
incurred. Any claim or product recall could result in adverse publicity against us, which could adversely
affect our financial condition, results of operations or cash flows.
In addition, we could face liability for failure to respond adequately to alarm activations or failure of
our fire protection systems to operate as expected. The nature of the services we provide potentially
exposes us to risks of liability for employee acts or omissions or system failures. In an attempt to reduce
this risk, our alarm monitoring agreements and other contracts contain provisions limiting our liability in
such circumstances. We cannot assure you, however, that these limitations will be enforced. Losses from
such litigation could be material to our financial condition, results of operations or cash flows.
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.
We cannot assure you 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:
• solvent, metal and other hazardous substance contamination cleanup; and
• oil spill equipment upgrades and replacement.
2009 Financials 17