ADT 2011 Annual Report Download - page 123

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, oil, metal and other hazardous substance contamination cleanup; and
• structure decontamination and demolition, including asbestos abatement.
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
regarding known contingencies and applicable laws, we concluded that it is probable that we would
incur remedial costs in the range of approximately $38 million to $86 million as of September 30, 2011.
As of September 30, 2011, we concluded that the best estimate within this range is approximately
$60 million, of which $18 million is included in accrued and other current liabilities and $42 million is
included in other liabilities in the Consolidated Balance. 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 materially adversely affect our financial condition, results of operations or cash
flows. We may also be subject to material liabilities for additional environmental claims for personal
injury or cleanup in the future based on our past, present or future business activities or for existing
environmental conditions of which we are not presently aware.
20 2011 Financials