Kodak 2000 Annual Report Download - page 50

Note 8: Commitments and Contingencies
E n v i ro n m e n t a l E x p e n d i t u res for pollution prevention and waste
t reatment for the Company’s current manufacturing facilities were
as follows:
(in millions) 2 0 0 0 1 9 9 9 1 9 9 8
R e c u rring costs for
managing hazardous
substances and
pollution pre v e n t i o n $7 2 $6 9 $ 7 5
Capital expenditures
to limit or monitor
h a z a rdous substances
and pollutants 3 6 2 0 2 5
Site remediation costs 35 4
To t a l $1 1 1 $9 4 $ 1 0 4
At December 31, 2000 and 1999, the Company’s undiscounted
a c c rued liabilities for environmental remediation costs amounted
to $113 million and $124 million, re s p e c t i v e l y.
The Company anticipates the above expenditures to incre a s e
in the future. However, it is not expected that these costs will
have an impact which is materially diff e rent from 2000’s enviro n-
mental expenditures on financial position, results of operations,
cash flows or competitive position.
A Consent Decree was signed in 1994 in settlement of a civil
complaint brought by the U.S. Environmental Protection Agency
and the U.S. Department of Justice under which the Company is
subject to a Compliance S chedule by which the C ompany
i m p roved its waste characterization pro c e d u res, upgraded one of
its incinerators, and is evaluating and upgrading its industrial
sewer sys tem. The total expenditures re q u i red to complete this
p rogram are currently estimated to be approximately $33 million
over the next eight years. These expenditures are primarily capi-
tal in nature .
The Comp any is pres ently des ignated as a potentially
responsible party (PRP) under the Comprehensive Enviro n m e n t a l
Response, Compensation, and Liability Act of 1980, as amended
(the Superfund law), or under similar state laws, for enviro n m e n-
tal assessment and cleanup costs as the result of the Company’s
alleged arrangements for disposal of hazardous substances at
a p p roximately four active S uperfund sites. With respect to each
of these sites, the Company’s actual or potential allocated share
of responsibility is small. Furt h e rm o re, numerous other PRPs
have also been designated at these sites and, although the law
imposes joint and several liability on PRPs, as a practical matter,
costs are shared with other PRPs. Settlements and costs paid
by the Company in Superfund matters to date have not been
material. Future costs are also not expected to be material to
the C ompany’s financial position or results of operations.
In addition to the foregoing environmental actions, the
Company is currently implementing a Corrective Action Pro g r a m
re q u i r e d by the Re source C onservation and Recovery Act
(RCRA) at the Kodak Park site in Rochester, NY. As part of this
P rogram, the Company has completed the RCRA Facility Assess-
ment (RFA), a broad-based environmental investigation of the site.
The Company is currently in the process of completing, and in
some cases has completed, RCRA Facility Investigations (RFIs)
and Corrective Measures Studies (CMS) for areas at the site.
Estimated future remediation costs are accrued by the Company
and are included in remediation accruals re c o rded at Decem-
ber 31, 2000.
The Clean Air Act Amendments were enacted in 1990.
E x p e n d i t u res to comply with the Clean Air Act implementing re g-
ulations issued to date have not been material and have been
primarily capital in nature. In addition, future expenditures for
existing regulations, which are primarily capital in nature, are not
expected to be material. Many of the regulations to be pro m u l-
gated pursuant to this Act have not been issued.
The Company has retained certain obligations for enviro n-
mental remediation and Superfund matters related to the non-
imaging health businesses sold in 1994. Actions to fulfill these
remedial obligations are not expected to be completed in the near
t e rm and costs related to the obligations are included in accru a l s
re c o rded at December 31, 2000 and 1999. Also included in these
a c c ruals are responsibilities for the liabilities associated with the
non-imaging health businesses as a PRP in approximately four
active Superfund sites.
Other Commitments and Contingencies The C ompany has
e n t e red into agreements with several companies which pro v i d e
Kodak with products and services to be used in its normal oper-
ations. The minimum payments for these agreements are appro x-
imately $198 million in 2001, $148 million in 2002, $128 million
in 2003, $113 million in 2004, $79 million in 2005, and $201 mil-
lion in 2006 and there a f t e r.
The C ompany has also guaranteed debt and other obli-
gations under agreements with certain affiliated companies and
customers. At December 31, 2000, these guarantees totaled
a p p roximately $250 million. The Company does not expect that
these guarantees will have a material impact on the Company’s
f u t u re financial position or results of operations.