Harley Davidson 2015 Annual Report Download - page 19

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Environmental Protection Agency Notice
In December 2009, the Company received formal, written requests for information from the United States Environmental
Protection Agency (EPA) regarding: (i) certificates of conformity for motorcycle emissions and related designations and labels,
(ii) aftermarket parts, and (iii) warranty claims on emissions related components. The Company promptly submitted written
responses to the EPA’s inquiry and has engaged in discussions with the EPA. Since that time, the EPA has delivered various
additional requests for information to which the Company has responded. It is probable that a result of the EPA’s investigation
will be some form of enforcement action by the EPA that will seek a fine and/or other relief. The Company has a reserve
associated with this matter which is included in accrued liabilities in the Consolidated Balance Sheet. However, given the
uncertainty that still exists concerning the resolution of this matter, there is a possibility that the actual loss incurred may be
materially different than the Company’s current reserve. At this time, the Company cannot reasonably estimate the impact of
any remedies the EPA might seek beyond the Company's current reserve for this matter, if any.
York Environmental Matters:
The Company is involved with government agencies and groups of potentially responsible parties in various
environmental matters, including a matter involving the cleanup of soil and groundwater contamination at its York,
Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility
by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental
contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection
(PADEP) since 1986 in undertaking environmental investigation and remediation activities, including an ongoing site-wide
remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the
Agreement) with the Navy, and the parties amended the Agreement in 2013 to address ordnance and explosive waste.
The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%,
respectively, of future costs associated with environmental investigation and remediation activities at the York facility
(Response Costs). The trust administers the payment of the Response Costs incurred at the York facility as covered by the
Agreement.
The Company has a reserve for its estimate of its share of the future Response Costs at the York facility which is included
in accrued liabilities in the Condensed Consolidated Balance Sheets. As noted above, the RI/FS is still underway and given the
uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may
ultimately be required under the RI/FS or otherwise at the York facility, the Company is unable to make a reasonable estimate
of those additional costs, if any, that may result.
The estimate of the Company’s future Response Costs that will be incurred at the York facility is based on reports of
independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to
complete the necessary investigation and remediation activities. Response Costs are expected to be paid over the next several
years.
Product Liability Matters:
The Company is involved in product liability suits related to the operation of its business. The Company accrues for claim
exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage
for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product
liability suits will not have a material adverse effect on the Company’s consolidated financial statements.
Item 4. Mine Safety Disclosures
Not Applicable