Rayovac 2005 Annual Report Download - page 69

From time to time, we have been required to
address the effect of historic activities on the envi-
ronmental condition of our properties. We have not
conducted invasive testing at all our facilities to
identify all potential environmental liability risks.
Given the age of our facilities and the nature of our
operations, there can be no assurance that material
liabilities will not arise in the future in connection
with our current or former facilities. If previously
unknown contamination of property underlying or in
the vicinity of our manufacturing facilities is discov-
ered, we could be required to incur material unfore-
seen expenses. If this occurs, it may have a material
adverse effect on our business, fi nancial condition
and results of operations. We are currently engaged
in investigative or remedial projects at a few of our
facilities. There can be no assurance that our liabili-
ties in respect of investigative or remedial projects
at our facilities will not be material.
We have been, and in the future may be, subject
to proceedings related to our disposal of industrial
and hazardous material at off-site disposal locations
or similar disposals made by other parties for which
we are responsible as a result of our relationship
with such other parties. These proceedings are
under CERCLA or similar state laws that hold per-
sons who “arranged for” the disposal or treatment
of such substances strictly liable for costs incurred
in responding to the release or threatened release
of hazardous substances from such sites, regard-
less of fault or the lawfulness of the original dis-
posal. Liability under CERCLA is typically joint and
several, meaning that a liable party may be responsi-
ble for all of the costs incurred in investigating and
remediating contamination at a site. As a practical
matter, liability at CERCLA sites is shared by all of
the viable responsible parties. We occasionally are
identifi ed by federal or state governmental agencies
as being a potentially responsible party for response
actions contemplated at an off-site facility. At the
one existing site where we have been notifi ed of our
status as a potentially responsible party, we do not
believe that our liability, if any, will be material. We
may be named as a potentially responsible party
under CERCLA or similar state matters in the future
for other sites not currently known to us, and the
costs and liabilities associated with these sites may
be material.
Compliance with various public health, consumer
protection and other regulations applicable to
our products and facilities could increase our cost
of doing business and expose us to additional
requirements with which we may be unable
to comply.
Certain of our products and facilities are regu-
lated by the EPA, the FDA or other federal consumer
protection and product safety regulations, as well as
similar registration, approval and other requirements
under state and foreign laws and regulations. For
example, in the United States, all products contain-
ing pesticides must be registered with the EPA and,
in many cases, similar state and foreign agencies
before they can be manufactured or sold. The inabil-
ity to obtain or the cancellation of any registration
could have an adverse effect on our business, fi nan-
cial condition and results of operations. The severity
of the effect would depend on which products were
involved, whether another product could be substi-
tuted and whether our competitors were similarly
affected. We attempt to anticipate regulatory devel-
opments and maintain registrations of, and access
to, substitute chemicals and other ingredients.
We may not always be able to avoid or minimize
these risks.
The Food Quality Protection Act established a
standard for food-use pesticides, which is that a rea-
sonable certainty of no harm will result from the
cumulative effect of pesticide exposures. Under this
Act, the EPA is evaluating the cumulative effects
from dietary and non-dietary exposures to pesticides.
The pesticides in certain of our products continue
to be evaluated by the EPA as part of this exposure.
It is possible that the EPA or a third party active
ingredient registrant may decide that a pesticide we
use in our products will be limited or made unavail-
able to us. For example, in 2000, Dow AgroSciences
L.L.C., an active ingredient registrant, voluntarily
agreed to a withdrawal of virtually all residential
uses of chlorpyrifos, an active ingredient that, until
January 2001, United used in its lawn and garden
products under the name Dursban™. This had a
material adverse effect on United’s operations
resulting in a charge of $8.0 million in 2001. We
cannot predict the outcome or the severity of the
effect of the EPA’s continuing evaluations of active
ingredients used in our products.
2005 Form 10-K Annual Report
Spectrum Brands, Inc.
2005 ANNUAL REPORT 49