Dow Chemical 2009 Annual Report Download - page 103

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investigation phase and the PRP group is conducting an investigation of sediment contamination in Berry’s Creek. Sediment removal was undertaken by the
PRP group in 2009 in connection with an unrelated project to replace a flood control tidegate in the creek. At December 31, 2009, the Company had an accrual
of $25 million for environmental remediation at the two Wood-Ridge sites. Since the April 1, 2009 acquisition, the Company has spent $24 million on
environmental remediation at the two Wood-Ridge sites.
In total, the Company’s accrued liability for probable environmental remediation and restoration costs was $619 million at December 31, 2009,
compared with $312 million at the end of 2008. This is management’s best estimate of the costs for remediation and restoration with respect to environmental
matters for which the Company has accrued liabilities, although the ultimate cost with respect to these particular matters could range up to approximately twice
that amount. It is the opinion of the Company’s management that the possibility is remote that costs in excess of those disclosed will have a material adverse
impact on the Company’s consolidated financial statements.
The amounts charged to income on a pretax basis related to environmental remediation totaled $269 million in 2009, $140 million in 2008 and
$92 million in 2007. Capital expenditures for environmental protection were $219 million in 2009, $193 million in 2008 and $189 million in 2007.
Asbestos-Related Matters of Union Carbide Corporation
Introduction
Union Carbide Corporation (“Union Carbide”), a wholly owned subsidiary of the Company, is and has been involved in a large number of asbestos-related
suits filed primarily in state courts during the past three decades. These suits principally allege personal injury resulting from exposure to asbestos-containing
products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged
exposure to asbestos-containing products located on Union Carbide’s premises, and Union Carbide’s responsibility for asbestos suits filed against a former
Union Carbide subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they have suffered any
compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide’s products.
Influenced by the bankruptcy filings of numerous defendants in asbestos-related litigation and the prospects of various forms of state and national
legislative reform, the rate at which plaintiffs filed asbestos-related suits against various companies, including Union Carbide and Amchem, increased in
2001, 2002 and the first half of 2003. Since then, the rate of filing has significantly abated. Union Carbide expects more asbestos-related suits to be filed
against Union Carbide and Amchem in the future, and will aggressively defend or reasonably resolve, as appropriate, both pending and future claims.
The table below provides information regarding asbestos-related claims filed against Union Carbide and Amchem:
2009 2008 2007
Claims unresolved at January 1 75,706 90,322 111,887
Claims filed 8,455 10,922 10,157
Claims settled, dismissed or otherwise resolved (9,131) (25,538) (31,722)
Claims unresolved at December 31 75,030 75,706 90,322
Claimants with claims against both UCC and Amchem 24,146 24,213 28,937
Individual claimants at December 31 50,884 51,493 61,385
Plaintiffs’ lawyers often sue dozens or even hundreds of defendants in individual lawsuits on behalf of hundreds or even thousands of claimants. As a
result, the damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when specific damages are
alleged with respect to a specific disease or injury. In fact, there are no personal injury cases in which only Union Carbide and/or Amchem are the sole named
defendants. For these reasons and based upon Union Carbide’s litigation and settlement experience, Union Carbide does not consider the damages alleged
against Union Carbide and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.
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