Sunbeam 2014 Annual Report Download - page 58

56 Jarden Corporation Annual Report 2014
remediation activities, the majority of which relates to divested operations and sites. Various of the Company’s subsidiaries have
been identied 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 coincides with the earlier of a 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 difculties 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 similar sites and technical evaluations, are
judgmental in nature and are recorded at discounted amounts without considering the impact of ination and are adjusted periodically
to reect changes in applicable laws or regulations, changes in available technologies and receipt by the Company of new information.
It is difcult 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 environmental remediation
requirements, the enactment of additional regulations, uncertainties surrounding remediation procedures including the development
of new technology, the identication of new sites 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 to the uncertainties described above, the Company’s ultimate future liability with respect to sites at which remediation has not
been completed may vary from the amounts reserved as of December31, 2014.
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 nancial position, results of operations or cash ows 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 signicant factors that vary by case. When it is not possible to estimate a
specic 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 consolidated nancial position, results of operations or cash ows of the
Company.
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 to their 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 accrued. The methods of making such estimates and establishing the resulting liability are reviewed on a regular basis and any
adjustments resulting therefrom are reected in current operating results.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated)