DELPHI 2011 Annual Report Download - page 71

Table of Contents
Environmental Matters
We are subject to the requirements of U.S. federal, state and local, and non-U.S., environmental and safety and health laws and regulations. These
include laws regulating air emissions, water discharge, hazardous materials and waste management. We have an environmental management structure
designed to facilitate and support our compliance with these requirements globally. Although it is our intent to comply with all such requirements and
regulations, we cannot provide assurance that we are at all times in compliance. Environmental requirements are complex, change frequently and have tended
to become more stringent over time. Accordingly, we cannot assure that environmental requirements will not change or become more stringent over time or
that our eventual environmental remediation costs and liabilities will not be material.
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. In addition to clean-up actions brought by U.S. federal, state, local and non-U.S. agencies, plaintiffs could raise personal injury or other
private claims due to the presence of hazardous substances on or from a property. We are currently in the process of investigating and cleaning up some of our
current or former sites. In addition, there may be soil or groundwater contamination at several of our properties resulting from historical, ongoing or nearby
activities.
As of December 31, 2011 and 2010, the undiscounted reserve for environmental investigation and remediation was approximately $22 million (of
which $5 million was recorded in accrued liabilities and $17 million was recorded in other long-term liabilities) and $23 million (of which $5 million was
recorded in accrued liabilities and $18 million was recorded in other long-term liabilities), respectively. We cannot ensure that environmental requirements
will not change or become more stringent over time or that our eventual environmental remediation costs and liabilities will not exceed the amount of our
current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, our results of operations could be materially affected.
Legal Proceedings
For a description of our legal proceedings, see Item 3. Legal Proceedings and Note 14. Commitments and Contingencies to the audited consolidated
financial statements included herein.
Significant Accounting Policies and Critical Accounting Estimates
Our significant accounting policies are described in Note 2. Significant Accounting Policies to the audited consolidated financial statements included
herein. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for
calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical
experience, terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and information available from other
outside sources, as appropriate.
We consider an accounting estimate to be critical if:
• It requires us to make assumptions about matters that were uncertain at the time we were making the estimate, and
• Changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results
of operations.
Acquisition Accounting
Upon the Acquisition the recorded amounts for the assets acquired and the liabilities assumed from the Predecessor were adjusted to reflect estimated
fair values in accordance with the provisions of FASB ASC 805,
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