Rayovac 2014 Annual Report Download - page 37

From time to time, we have been required to address the effect of historic activities on the environmental
condition of our properties or former properties. We have not conducted invasive testing at all of our facilities to
identify all potential environmental liability risks. Given the age of our facilities and the nature of our operations,
material liabilities may 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 are currently engaged in investigative or remedial
projects at a few of our facilities and any liabilities arising from such investigative or remedial projects at such
facilities may have a material effect on our business, financial condition and results of operations.
In addition, in connection with business acquisitions, we have assumed, and in connection with future
acquisitions may assume in the future, certain potential environmental liabilities. To the extent we have not
identified such environmental liabilities or to the extent the indemnifications obtained from our counterparties
are insufficient to cover such environmental liabilities, these environmental liabilities could have a material
adverse effect on our business.
We are also subject to proceedings related to our disposal of industrial and hazardous material at off-site
disposal locations or similar disposals made by other parties for which we are responsible as a result of our
relationship with such other parties. These proceedings are under the Comprehensive Environmental Response,
Compensation, and Liability Act (“CERCLA”) or similar state or foreign jurisdiction 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. We occasionally
are identified by federal or state governmental agencies as being a potentially responsible party for response
actions contemplated at an off-site facility. At the existing sites where we have been notified of our status as a
potentially responsible party, it is either premature to determine if our potential liability, if any, will be material
or we do not believe that our liability, if any, will be material. We may be named as a potentially responsible
party under CERCLA or similar state or foreign jurisdiction laws in the future for other sites not currently known
to us, and the costs and liabilities associated with these sites may have a material adverse effect on our business,
financial condition and results of operations.
Compliance with various public health, consumer protection and other regulations applicable to our
products and facilities could increase our cost of doing business and expose us to additional requirements
with which we may be unable to comply.
Certain of our products sold through, and facilities operated under, each of our business segments are
regulated by the Environmental Protection Agency (“EPA”), the Food and Drug Administration (“FDA”) or
other federal consumer protection and product safety agencies and are subject to the regulations such agencies
enforce, as well as by similar state, foreign and multinational agencies and regulations. For example, in the U.S.,
all products containing pesticides must be registered with the EPA and, in many cases, similar state and foreign
agencies before they can be manufactured or sold. Our inability to obtain, or the cancellation of, any registration
could have an adverse effect on our business, financial condition and results of operations. The severity of the
effect would depend on which products were involved, whether another product could be substituted and whether
our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain
registrations of, and access to, substitute chemicals and other ingredients, but we may not always be able to avoid
or minimize these risks.
As a distributor of consumer products in the U.S., certain of our products are also subject to the Consumer
Product Safety Act, which empowers the U.S. Consumer Product Safety Commission (the “Consumer
Commission”) to exclude from the market products that are found to be unsafe or hazardous. Under certain
circumstances, the Consumer Commission could require us to repair, replace or refund the purchase price of one
or more of our products, or we may voluntarily do so. Any additional repurchases or recalls of our products could
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