Rayovac 2009 Annual Report Download - page 15

Table of Contents
Index to Financial Statements
parties. We occasionally are identified by federal or state governmental agencies as being a potentially responsible party for response actions contemplated
at an off−site facility. At the existing sites where we have been notified of our status as a potentially responsible party, it is either premature to determine
whether our potential liability, if any, will be material or 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 laws for other sites not currently known to us, and the costs and liabilities associated with these sites may
be material.
It is difficult to quantify with certainty the potential financial impact of actions regarding expenditures for environmental matters, particularly
remediation, and future capital expenditures for environmental control equipment. Nevertheless, based upon the information currently available, we believe
that our ultimate liability arising from such environmental matters, taking into account established accruals of $4.4 million for estimated liabilities at
September 30, 2009 should not be material to our business or financial condition.
Electronic and electrical products that we sell in Europe, particularly products sold under the Remington brand name, VARTA battery chargers,
certain portable lighting and all of our batteries, are subject to regulation in European Union (“EU”) markets under three key EU directives. The first
directive is the Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) which took effect in EU member states
beginning July 1, 2006. RoHS prohibits companies from selling products which contain certain specified hazardous materials in EU member states. We
believe that compliance with RoHS will not have a material effect on our capital expenditures, financial condition, earnings or competitive position. The
second directive is entitled the Waste of Electrical and Electronic Equipment (“WEEE”). WEEE makes producers or importers of particular classes of
electrical goods financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. WEEE assigns levels
of responsibility to companies doing business in EU markets based on their relative market share. WEEE calls on each EU member state to enact enabling
legislation to implement the directive. To comply with WEEE requirements, we have partnered with other companies to create a comprehensive collection,
treatment, disposal and recycling program. As EU member states pass enabling legislation our compliance system should be sufficient to meet such
requirements. Our current estimated costs associated with compliance with WEEE are not significant based on our current market share. However, we
continue to evaluate the impact of the WEEE legislation as EU member states implement guidance and as our market share changes, and, as a result, actual
costs to our company could differ from our current estimates. The third directive is the Directive on Batteries and Accumulators and Waste Batteries, which
was adopted in September 2006 and went into effect in September 2008 (the “Battery Directive”). The Battery Directive bans heavy metals in batteries by
establishing maximum quantities of those heavy metals in batteries and mandates waste management of batteries, including collection, recycling and
disposal systems. The Battery Directive places the costs of such waste management systems on producers and importers of batteries. The Battery Directive
calls on each EU member state to enact enabling legislation to implement the directive. We currently believe that compliance with the Battery Directive will
not have a material effect on our capital expenditures, financial condition, earnings or competitive position. However, until such time as the EU member
states adopt enabling legislation, a full evaluation of these costs cannot be completed. We will continue to evaluate the impact of the Battery Directive and
its enabling legislation as EU member states implement guidance.
Certain of our products and facilities in each of our business segments are regulated by the United States Environmental Protection Agency (the
“EPA”) and the United States Food and Drug Administration (the “FDA”) or other federal consumer protection and product safety agencies and are subject
to the regulations such agencies enforce, as well as by similar state, foreign and multinational agencies and regulations. For example, in the U.S., all
products containing pesticides must be registered with the EPA and, in many cases, similar state and foreign agencies before they can be manufactured or
sold. Our inability to obtain or the cancellation of any registration could have an adverse effect on our business, financial condition and results of operations.
The severity of the effect would depend on which products were involved, whether another product could be substituted and whether our competitors were
similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients.
We may not always be able to avoid or minimize these risks.
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