Rayovac 2004 Annual Report Download - page 55

Class action lawsuits, regardless of their merits, could have an adverse effect on our business, financial
condition and results of operations.
Rayovac and certain of its officers and directors have been named in the past, and may be named in the
future, as defendants of class action lawsuits. Regardless of their subject matter or the merits, class action
lawsuits may result in significant cost to us, which may not be covered by insurance, divert the attention of
management or otherwise have an adverse effect on our business, financial condition and results of operations.
We may incur material capital and other costs due to environmental liabilities.
Because of the nature of our operations, our facilities are subject to a broad range of federal, state, local and
foreign laws and regulations relating to the environment. These include laws and regulations that govern:
• discharges to the air, water and land;
• the handling and disposal of solid and hazardous substances and wastes; and
• remediation of contamination associated with release of hazardous substances at our facilities and at off-
site disposal locations.
Risk of environmental liability is inherent in our business. As a result, material environmental costs may
arise in the future. In particular, we may incur capital and other costs to comply with increasingly stringent
environmental laws and enforcement policies. Although we believe that we are substantially in compliance with
applicable environmental regulations at our facilities, we may not be in compliance with such regulations in the
future, which could have a material adverse effect upon our business, financial condition and results of
operations.
We have facilities that have been in operation by us or prior operators for decades and are constructed on fill
that includes, among other things, battery materials containing various heavy metals. From time to time, we have
been required to address the effect of historic activities on the environmental condition of our properties,
including without limitation, the effect of the generation and disposal of wastes such as manganese, cadmium and
mercury, which are or may be considered hazardous, and releases from underground storage tanks. We have not
conducted invasive testing to identify all potential environmental liability risks. Given the age of our facilities
and the nature of our operations, there can be no assurance that material liabilities will not arise in the future in
connection with our current or former facilities. If previously unknown contamination of property underlying or
in the vicinity of our manufacturing facilities is discovered, we could be required to incur material unforeseen
expenses. If this occurs, it may have a material adverse effect on our business, financial condition and results of
operations. We have accepted a deed restriction on one such property in lieu of conducting remedial activities,
and may consider similar actions at other properties if appropriate. Although we are currently engaged in
investigative or remedial projects at a few of our facilities, we do not expect that such projects will cause us to
incur material expenditures, however, there can be no assurance that our liability will not be material.
We have been, and in the future may be, subject to proceedings related to our disposal of industrial and
hazardous material at off-site disposal locations. These proceedings are under the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) or similar state laws that hold
persons who “arranged for” the disposal or treatment of such substances strictly liable for costs incurred in
responding to the release or threatened release of hazardous substances from such sites, regardless of fault or the
lawfulness of the original disposal. Liability under CERCLA is typically joint and several, meaning that a liable
party may be responsible for all of the costs incurred in investigating and remediating contamination at a site. As
a practical matter, liability at CERCLA sites is shared by all of the viable responsible parties. While we currently
have no pending CERCLA or similar state matters, we may be named as a potentially responsible party at sites in
the future and the costs and liabilities associated with these sites may be material.
40