Dow Chemical 2012 Annual Report Download - page 91

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Company had an accrual of $15 million ($15 million at December 31, 2011) for environmental remediation at the Wood-Ridge
sites. In 2012, the Company spent $4 million ($9 million in 2011) on environmental remediation at the two Wood-Ridge sites.
Dow Brasil S.A. acquired a toluene diisocyanate ("TDI") manufacturing plant located within the Camaçari, Brazil
petrochemical complex from Pronor in 1998. Since the acquisition, the TDI plant has undergone a number of environmental
investigations that indicate that pre-acquisition materials/waste management practices resulted in extensive soil and
groundwater contamination with mono and dichlorobenzenes, dinitrotoluene, and toluene, among other compounds. Additional
investigation is needed to further delineate the vertical limits of soil and groundwater impacts. An initial accrual was recorded
in December 2011 in the amount of $50 million to address environmental remediation of soils and long-term groundwater
remediation at the site. At December 31, 2012, the Company had an accrual of $44 million ($52 million at December 31, 2011)
for environmental remediation at the Camaçari TDI manufacturing site. In 2012, the Company spent less than $1 million ($1
million in 2011) on environmental remediation at the Camaçari TDI manufacturing site.
In total, the Company’s accrued liability for probable environmental remediation and restoration costs was $754 million at
December 31, 2012, compared with $733 million at the end of 2011. 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 it is
reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately twice that
amount. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts
accrued could have a material impact on the Company’s results of operations, financial condition and cash flows. It is the
opinion of the Company’s management, however, that the possibility is remote that costs in excess of the range disclosed will
have a material impact on the Company’s results of operations, financial condition and cash flows.
The amounts charged to income on a pretax basis related to environmental remediation totaled $197 million in 2012,
$261 million in 2011 and $158 million in 2010. The amounts charged to income on a pretax basis related to operating the
Company’s current pollution abatement facilities totaled $717 million in 2012, $744 million in 2011 and $706 million in 2010.
Capital expenditures for environmental protection were $145 million in 2012, $170 million in 2011 and $173 million in 2010.
Asbestos-Related Matters of Union Carbide Corporation
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.
It is the opinion of Dow’s management that it is reasonably possible that the cost of Union Carbide disposing of its
asbestos-related claims, including future defense costs, could have a material impact on the Company’s results of operations
and cash flows for a particular period and on the consolidated financial position of the Company.
The table below provides information regarding asbestos-related claims filed against Union Carbide and Amchem based on
criteria developed by Union Carbide and its external consultants.
2012 2011 2010
Claims unresolved at January 1 53,225 62,582 75,030
Claims filed 9,627 7,810 7,731
Claims settled, dismissed or otherwise resolved (29,403) (17,167) (20,179)
Claims unresolved at December 31 33,449 53,225 62,582
Claimants with claims against both UCC and Amchem (9,542) (16,304) (18,890)
Individual claimants at December 31 23,907 36,921 43,692
Plaintiffs’ lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous 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.