Sunbeam 2008 Annual Report Download - page 53

Environmental
The Company’s operations are subject to certain federal, state, local and foreign environmental laws and regulations in addition
to laws and regulations regarding labeling and packaging of products and the sales of products containing certain environmentally
sensitive materials.
In addition to ongoing environmental compliance at its operations, the Company also is actively engaged in environmental remedia-
tion activities, the majority of which relate to divested operations and sites. Various of the Company’s subsidiaries have been identified by
the EPA or a state environmental agency as a PRP pursuant to the federal Superfund Act and/or state Superfund laws comparable to the
federal law at various sites (collectively, the “Environmental Sites”). The Company has established reserves to cover the anticipated probable
costs of investigation and remediation, based upon periodic reviews of all sites for which they have, or may have, remediation responsibility.
The Company accrues environmental investigation and remediation costs when it is probable that a liability has been incurred, the amount
of the liability can be reasonably estimated and their responsibility for the liability is established. Generally, the timing of these accruals coin-
cides with the earlier of formal commitment to an investigation plan, completion of a feasibility study or a commitment to a formal plan of
action. The Company accrues its best estimate of investigation and remediation costs based upon facts known at such dates and because of
the inherent difficulties in estimating the ultimate amount of environmental costs, which are further described below, these estimates may
materially change in the future as a result of the uncertainties described below. Estimated costs, which are based upon experience with sim-
ilar sites and technical evaluations, are judgmental in nature and are recorded at discounted amounts without considering the impact of
inflation and areadjusted periodically to reflectchanges in applicable laws or regulations, changes in available technologies and receipt by
the Company of new information. It is difficult to estimate the ultimate level of future environmental expenditures due to a number of
uncertainties surrounding environmental liabilities. These uncertainties include the applicability of laws and regulations, changes in environ-
mental remediation requirements, the enactment of additional regulations, uncertainties surrounding remediation procedures including the
development of new technology,the identification of newsites for which various of the Company’s subsidiaries could be a PRP, information
relating to the exact nature and extent of the contamination at each Environmental Site and the extent of required cleanup efforts, the
uncertainties with respect to the ultimate outcome of issues which may be actively contested and the varying costs of alternative
remediation strategies.
Due tothe uncertainty described above, the Company’s ultimate future liability with respect to sites at which remediation has not
been completed mayvaryfrom the amounts reserved as of December 31, 2008.
The Company believes that the costs of completing environmental remediation of all sites for which the Company has a remediation
responsibility have been adequately reserved and that the ultimate resolution of these matters will not have a material adverse effect on the
consolidated financial position, results of operations or cash flows of the Company.
Litigation
The Company and/or its subsidiaries are involved in various lawsuits arising from time to time that the Company considers ordinary
routine litigation incidental to its business. Amounts accrued for litigation matters represent the anticipated costs (damages and/or settlement
amounts) in connection with pending litigation and claims and related anticipated legal fees for defending such actions. The costs are
accrued when it is both probable that a liability has been incurred and the amount can be reasonably estimated. The accruals are based upon
the Company’s assessment, after consultation with counsel (if deemed appropriate), of probable loss based on the facts and circumstances
of each case, the legal issues involved, the nature of the claim made, the nature of the damages sought and any relevant information about
the plaintiffs and other significant factors that vary by case. When it is not possible to estimate a specific expected cost to be incurred, the
Company evaluates the range of probable loss and records the minimum end of the range. The Company believes that anticipated probable
costs of litigation matters have been adequately reserved to the extent determinable. Based on current information, the Company believes
that the ultimate conclusion of the various pending litigation of the Company, in the aggregate, will not have a material adverse effect on the
Company’s consolidated financial position, results of operations or cash flows.
Product Liability
As a consumer goods manufacturer and distributor, the Company and/or its subsidiaries face the risk of product liability and related
lawsuits involving claims for substantial money damages, product recall actions and higher than anticipated rates of warranty returns or
other returns of goods.
The Company and/or its subsidiaries are therefore party to various personal injury and property damage lawsuits relating to their
products and incidental toits business.Annually,the Company sets its product liability insurance program which is an occurrence-based
program based on the Company and its subsidiaries’ current and historical claims experience and the availability and cost of insurance. The
Company’s product liability insurance program generally includes a self-insurance retention per occurrence.
Cumulative amounts estimated to be payable by the Company with respect to pending and potential claims for all years in which
the Company is liable under its self-insurance retention have been accrued as liabilities. Such accrued liabilities are based on estimates
(which include actuarial determinations made by an independent actuarial consultant as to liability exposure, taking into account prior
experience,number of claims and other relevant factors); thus, the Company’s ultimate liability may exceed or be less than the amounts
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2008 (Dollars in millions, except per share data and unless otherwise indicated)
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