Danaher 2011 Annual Report Download - page 96

Table of Contents
In addition, the Company’s operations, products and services are subject to environmental laws and regulations in the jurisdictions in which they operate,
which impose limitations on the discharge of pollutants into the environment and establish standards for the use, generation, treatment, storage and disposal of
hazardous and non-hazardous wastes. A number of the Company’s operations involve the handling, manufacturing, use or sale of substances that are or
could be classified as hazardous materials within the meaning of applicable laws. The Company must also comply with various health and safety regulations
in both the United States and abroad in connection with its operations. Compliance with these laws and regulations has not had and, based on current
information and the applicable laws and regulations currently in effect, is not expected to have a material effect on the Company’s capital expenditures,
earnings or competitive position, and the Company does not anticipate material capital expenditures for environmental control facilities.
In addition to environmental compliance costs, the Company from time to time incurs costs related to alleged damages associated with past or current waste
disposal practices or other hazardous materials handling practices. For example, generators of hazardous substances found in disposal sites at which
environmental problems are alleged to exist, as well as the current and former owners of those sites and certain other classes of persons, are subject to claims
brought by state and federal regulatory agencies pursuant to statutory authority. The Company has received notification from the U.S. Environmental
Protection Agency, and from state and non-U.S. environmental agencies, that conditions at certain sites where the Company and others previously disposed of
hazardous wastes and/or are or were property owners require clean-up and other possible remedial action, including sites where the Company has been
identified as a potentially responsible party under U.S. federal and state environmental laws. The Company has projects underway at a number of current and
former facilities, in both the United States and abroad, to investigate and remediate environmental contamination resulting from past operations. Remediation
activities generally relate to soil and/or groundwater contamination and may include pre-remedial activities such as fact-finding and investigation, risk
assessment, feasibility study, and/or design, as well as remediation actions such as contaminant removal, monitoring and/or installation, operation and
maintenance of longer-term remediation systems. The Company is also from time to time party to personal injury or other claims brought by private parties
alleging injury due to the presence of or exposure to hazardous substances.
The Company has made a provision for environmental investigation and remediation and environmental-related claims with respect to sites owned or formerly
owned by the Company and its subsidiaries and third-party sites where the Company has been determined to be a potentially responsible party. The Company
generally makes an assessment of the costs involved for its remediation efforts based on environmental studies, as well as its prior experience with similar
sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties of the Company’s involvement in certain sites, uncertainties regarding the
extent of the required cleanup, the availability of alternative cleanup methods, variations in the interpretation of applicable laws and regulations, the possibility
of insurance recoveries with respect to certain sites and the fact that imposition of joint and several liability with right of contribution is possible under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 and other environmental laws and regulations. If the Company determines
that potential liability for a particular site or with respect to a personal injury claim is probable and reasonably estimable, the Company accrues the total
estimated loss, including investigation and remediation costs, associated with the site or claim. Please see Note 9 for additional information about the
Company’s environmental reserves.
All provisions have been recorded without giving effect to any possible future third party recoveries. While the Company actively pursues insurance
recoveries, as well as recoveries from other potentially responsible parties, the Company does not recognize any insurance recoveries for environmental liability
claims until realized or until such time as a sustained pattern of collections is established related to historical matters of a similar nature and magnitude.
The Company’s Restated Certificate of Incorporation requires it to indemnify to the full extent authorized or permitted by law any person made, or threatened to
be made a party to any action or proceeding by reason of his or her service as a director or officer of the Company, or by reason of serving at the request of the
Company as a director or officer of any other entity, subject to limited exceptions. Danaher’s Amended and Restated By-laws provide for similar
indemnification rights. In addition, Danaher has executed with each director and executive officer of Danaher Corporation an indemnification agreement which
provides for substantially similar indemnification rights and under which Danaher has agreed to pay expenses in advance of the final disposition of any such
indemnifiable proceeding. While the Company maintains insurance for this type of liability, a significant deductible applies to this coverage and any such
liability could exceed the amount of the insurance coverage.
At December 31, 2011 and 2010, the Company had approximately $330 million and $374 million, respectively, of guarantees consisting primarily of
outstanding standby letters of credit, bank guarantees and performance and bid bonds. These guarantees have been provided in connection with certain
arrangements with vendors, customers,
94
Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.