Black & Decker 2010 Annual Report Download - page 20

asserted claims against the State of California. The administrative proceedings and the lawsuits generally
allege that West Coast Loading Corporation (“WCLC”), a defunct company that operated in Rialto between
1952 and 1957, and an as yet undefined number of other defendants are responsible for the release of
perchlorate and solvents into the groundwater basin, and that Black & Decker and certain of its current or
former affiliates are liable as a “successor” of WCLC. The Company believes that neither the facts nor the
law support an allegation that Black & Decker is responsible for the contamination and is vigorously
contesting these claims.
In addition, the Company is a party to a number of proceedings before federal and state regulatory agencies
relating to environmental remediation. Also, the Company, along with many other companies, has been named
as a PRP in a number of administrative proceedings for the remediation of various waste sites, including
36 active Superfund sites. Current laws potentially impose joint and several liabilities upon each PRP. In
assessing its potential liability at these sites, the Company has considered the following: whether responsibility
is being disputed, the terms of existing agreements, experience at similar sites, and the Company’s volumetric
contribution at these sites.
The Company’s policy is to accrue environmental investigatory and remediation costs for identified sites when
it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The
amount of liability recorded is based on an evaluation of currently available facts with respect to each
individual site and includes such factors as existing technology, presently enacted laws and regulations, and
prior experience in remediation of contaminated sites. The liabilities recorded do not take into account any
claims for recoveries from insurance or third parties. As assessments and remediation progress at individual
sites, the amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal
information that becomes available. As of January 1, 2011 and January 2, 2010, the Company had reserves of
$173.0 million and $29.7 million, respectively, for remediation activities associated with Company-owned
properties, as well as for Superfund sites, for losses that are probable and estimable. Of the 2010 amount,
$25.9 million is classified as current and $147.1 million as long-term which is expected to be paid over the
estimated remediation period. The range of environmental remediation costs that is reasonably possible is
$157 million to $349 million which is subject to change in the near term. The Company may be liable for
environmental remediation of sites it no longer owns. Liabilities have been recorded on those sites in
accordance with policy.
The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed
periodically and adjusted to reflect additional technical and legal information that becomes available. Actual
costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in
evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the
Company does not expect that any sum it may have to pay in connection with these matters in excess of the
amounts recorded will have a materially adverse effect on its financial position, results of operations or
liquidity.
Employees
At January 1, 2011, the Company had approximately 36,700 employees, nearly 14,400 of whom were
employed in the U.S. Approximately 950 U.S. employees are covered by collective bargaining agreements
negotiated with 21 different local labor unions who are, in turn, affiliated with approximately 6 different
international labor unions. The majority of the Company’s hourly-paid and weekly-paid employees outside the
U.S. are not covered by collective bargaining agreements. The Company’s labor agreements in the U.S. expire
in 2011, 2012, 2013 and 2014. There have been no significant interruptions or curtailments of the Company’s
operations in recent years due to labor disputes. The Company believes that its relationship with its employees
is good.
1(d) FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
Financial information regarding the Company’s geographic areas is incorporated herein by reference to Note P,
Business Segments and Geographic Areas, of the Notes to the Consolidated Financial Statements in Item 8.
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