Kodak 2011 Annual Report Download - page 82

NOTE 11: COMMITMENTS AND CONTINGENCIES
Environmental
Cash expenditures for pollution prevention and waste treatment for the Company's current facilities were as follows:
Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as
incurred. Costs that are capital in nature and that provide future benefits are capitalized. Liabilities are recorded when environmental assessments are made
or the requirement for remedial efforts is probable, and the costs can be reasonably estimated. The timing of accruing for these remediation liabilities is
generally no later than the completion of feasibility studies. The Company has an ongoing monitoring process to assess how the activities, with respect to
the known exposures, are progressing against the accrued cost estimates.
At December 31, 2011 and 2010, the Company’s undiscounted accrued liabilities for environmental remediation costs amounted to $96 million and
$103 million, respectively. These amounts were reported in Other long-term liabilities in the accompanying Consolidated Statement of Financial
Position.
The Company is currently implementing a Corrective Action Program required by the Resource Conservation and Recovery Act (“RCRA”) at
Eastman Business Park (formerly known as Kodak Park) in Rochester, NY. The Company is currently in the process of completing, and in many
cases has completed, RCRA Facility Investigations (“RFI”), Corrective Measures Studies (CMS) and Corrective Measures Implementation (“CMI”)
for areas at the site. At December 31, 2011, estimated future investigation and remediation costs of $49 million were accrued for this site, the
majority of which relates to long-term operation, maintenance of remediation systems and monitoring costs.
In addition, the Company has accrued for obligations with estimated future investigation, remediation and monitoring costs of $9 million relating to
other operating sites, $19 million at sites associated with former operations, and $19 million of retained obligations for environmental remediation and
Superfund matters related to certain sites associated with the non-imaging health businesses sold in 1994.
Cash expenditures for the aforementioned investigation, remediation and monitoring activities are expected to be incurred over the next thirty years
for most of the sites. For these known environmental liabilities, the accrual reflects the Company’s best estimate of the amount it will incur under the
agreed-upon or proposed work plans. The Company’s cost estimates were determined using the ASTM Standard E 2137-06, "Standard Guide for
Estimating Monetary Costs and Liabilities for Environmental Matters," and have not been reduced by possible recoveries from third parties. The
overall method includes the use of a probabilistic model which forecasts a range of cost estimates for the remediation required at individual sites. The
projects are closely monitored and the models are reviewed as significant events occur or at least once per year. The Company’s estimate includes
investigations, equipment and operating costs for remediation and long-term monitoring of the sites.
The Company is presently designated as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (the “Superfund Law”), or under similar state laws, for environmental assessment and cleanup costs as the
result of the Company’s alleged arrangements for disposal of hazardous substances at six Superfund sites. In addition, the Company has been
identified as a PRP in connection with the non-imaging health businesses in two active Superfund sites. Numerous other PRPs have also been
designated at these sites. Although the law imposes joint and several liability on PRPs, the Company’s historical experience demonstrates that these
costs are shared with other PRPs. Settlements and costs paid by the Company in Superfund matters to date have not been material.
Among these matters is a case in which the Company has been named by the U.S. Environmental Protection Agency as a PRP with potential liability
for the study and remediation of the Lower Passaic River Study Area portion of the Diamond Alkali Superfund Site. Additionally, the Company has
been named as a third-party defendant (along with approximately 300 other entities) in an action initially brought by the New Jersey Department of
Environmental Protection in the Supreme Court of New Jersey, Essex County seeking recovery of all costs associated with the investigation, removal,
cleanup and damage to natural resources resulting from the disposal of
For the Year Ended December 31,
(in millions)
2011
2010
2009
Recurring costs for pollution
prevention and waste treatment
$
33
$
34
$
37
Capital expenditures for pollution
prevention and waste treatment
1
1
3
Site remediation costs
2
2
2
Total
$
36
$
37
$
42
80