Dow Chemical 2015 Annual Report Download - page 76

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Recovery Act permits and regulatory agreements. The Hazardous Waste Operating License for the Midland manufacturing site,
issued in 2003, and renewed and replaced in September 2015, also included provisions for the Company to conduct an
investigation to determine the nature and extent of off-site contamination from historic Midland manufacturing site operations.
In January 2010, the Company, the U.S. Environmental Protection Agency ("EPA") and the State of Michigan ("State") entered
into an administrative order on consent that requires the Company to conduct a remedial investigation, a feasibility study and a
remedial design for the Tittabawassee River, the Saginaw River and the Saginaw Bay, and pay the oversight costs of the EPA
and the State under the authority of CERCLA. See Note 15 to the Consolidated Financial Statements for additional
information. At December 31, 2015, the Company had an accrual of $92 million ($93 million at December 31, 2014) for
environmental remediation and investigation associated with the Midland sites. In 2015, the Company spent $28 million
($22 million in 2014) for environmental remediation at the Midland sites.
Rohm and Haas is a PRP at the Wood-Ridge, New Jersey Ventron/Velsicol Superfund Site, and the adjacent Berry’s Creek
Study Area ("BCSA") (collectively, the "Wood-Ridge sites"). Rohm and Haas is a successor in interest to a company that
owned and operated a mercury processing facility, where wastewater and waste handling resulted in contamination of soils and
adjacent creek sediments. Currently, the Berry’s Creek Study Area PRP group is undertaking a multi-stage Remedial
Investigation/Feasibility Study ("RI/FS") pursuant to an Administrative Order on Consent ("AOC") with U.S. EPA Region 2 to
identify contamination in surface water, sediment and biota related to numerous contaminated sites in the Berry's Creek
watershed. The RI will be submitted to the EPA by June 30, 2016. The FS will be submitted, perhaps in phases as part of an
adaptive remedy, on a schedule set by the EPA. The EPA will then review the remedial options presented in the FS, select the
remedy and issue a Record of Decision. The PRP group will then attempt to negotiate agreements with the PRP's to fund the
selected remedy and with the EPA to perform the remediation. There is currently much uncertainty as to what will be required
to remediate the BCSA, and Rohm and Haas's share of these costs has yet to be determined. At December 31, 2015, the
Company had an accrual of $15 million ($18 million at December 31, 2014) for environmental remediation at the Wood-Ridge
sites. In 2015, the Company spent $6 million ($6 million in 2014) on environmental remediation at the Wood-Ridge sites.
In total, the Company’s accrued liability for probable environmental remediation and restoration costs was $670 million at
December 31, 2015, compared with $706 million at the end of 2014. 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 two and half
times 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 $218 million in 2015,
$227 million in 2014 and $203 million in 2013. The amounts charged to income on a pretax basis related to operating the
Company’s current pollution abatement facilities totaled $770 million in 2015, $762 million in 2014 and $720 million in 2013.
Capital expenditures for environmental protection were $49 million in 2015, $78 million in 2014 and $102 million in 2013.
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 four 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.