3M 2015 Annual Report Download - page 110
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Forenvironmentallitigationmattersdescribedinthissectionforwhichaliability,ifany,hasbeenrecorded,theCompanybelieves
theamountrecorded,aswellasthepossiblelossorrangeoflossinexcessoftheestablishedaccrualisnotmaterialtotheCompany’s
consolidatedresultsofoperationsorfinancialcondition.Forthosemattersforwhichaliabilityhasnotbeenrecorded,theCompany
believesanysuchliabilityisnotprobableandestimableandtheCompanyisnotabletoestimateapossiblelossorrangeoflossat
thistime.
EnvironmentalLiabilitiesandInsuranceReceivables
AsofDecember31,2015,theCompanyhadrecordedliabilitiesof$43millionforestimated“environmentalremediation”costs
baseduponanevaluationofcurrentlyavailablefactswithrespecttoeachindividualsiteandalsorecordedrelatedinsurance
receivablesof$11million.TheCompanyrecordsliabilitiesforremediationcostsonanundiscountedbasiswhentheyareprobable
andreasonablyestimable,generallynolaterthanthecompletionoffeasibilitystudiesortheCompany’scommitmenttoaplanof
action.Liabilitiesforestimatedcostsofenvironmentalremediation,dependingonthesite,arebasedprimarilyuponinternalorthird-
partyenvironmentalstudies,andestimatesastothenumber,participationlevelandfinancialviabilityofanyotherpotentially
responsibleparties,theextentofthecontaminationandthenatureofrequiredremedialactions.TheCompanyadjustsrecorded
liabilitiesasfurtherinformationdevelopsorcircumstanceschange.TheCompanyexpectsthatitwillpaytheamountsrecordedover
theperiodsofremediationfortheapplicablesites,currentlyrangingupto20years.
AsofDecember31,2015,theCompanyhadrecordedliabilitiesof$35millionfor“otherenvironmentalliabilities”baseduponan
evaluationofcurrentlyavailablefactstoimplementtheSettlementAgreementandConsentOrderwiththeMPCA,theremedial
actionagreementwithADEM,andtoaddresstraceamountsofperfluorinatedcompoundsindrinkingwatersourcesintheCityof
Oakdale,Minnesota,aswellaspresenceinthesoilandgroundwaterattheCompany’smanufacturingfacilitiesinDecatur,Alabama,
andCottageGrove,Minnesota,andattwoformerdisposalsitesinWashingtonCounty,Minnesota(OakdaleandWoodbury).The
Companyexpectsthatmostofthespendingwilloccuroverthenextfouryears.AsofDecember31,2015,theCompany’sreceivable
forinsurancerecoveriesrelatedto“otherenvironmentalliabilities”was$15million.
Itisdifficulttoestimatethecostofenvironmentalcomplianceandremediationgiventheuncertaintiesregardingtheinterpretation
andenforcementofapplicableenvironmentallawsandregulations,theextentofenvironmentalcontaminationandtheexistenceof
alternativecleanupmethods.DevelopmentsmayoccurthatcouldaffecttheCompany’scurrentassessment,including,butnotlimited
to:(i)changesintheinformationavailableregardingtheenvironmentalimpactoftheCompany’soperationsandproducts;
(ii)changesinenvironmentalregulations,changesinpermissiblelevelsofspecificcompoundsindrinkingwatersources,orchanges
inenforcementtheoriesandpolicies,includingeffortstorecovernaturalresourcedamages;(iii)newandevolvinganalyticaland
remediationtechniques;(iv)successinallocatingliabilitytootherpotentiallyresponsibleparties;and(v)thefinancialviabilityof
otherpotentiallyresponsiblepartiesandthird-partyindemnitors.Forsitesincludedinboth“environmentalremediationliabilities”
and“otherenvironmentalliabilities,”atwhichremediationactivityislargelycompleteandremainingactivityrelatesprimarilyto
operationandmaintenanceoftheremedy,includingrequiredpost-remediationmonitoring,theCompanybelievestheexposureto
lossinexcessoftheamountaccruedwouldnotbematerialtotheCompany’sconsolidatedresultsofoperationsorfinancial
condition.However,forlocationsatwhichremediationactivityislargelyongoing,theCompanycannotestimateapossiblelossor
rangeoflossinexcessoftheassociatedestablishedaccrualsforthereasonsdescribedabove.
OtherMatters
CommercialLitigation
3MsuedTransWebCorporationinMinnesotain2010forinfringementofseveral3Mpatentscoveringfluorinationand
hydrochargingoffiltermediausedin3M’srespiratorsandfurnacefilters.TransWebfiledadeclaratoryjudgmentactioninand
successfullymovedthelitigationtotheU.S.DistrictCourtfortheDistrictofNewJersey,seekingadeclarationofinvalidityand
non-infringementof3M’spatents,andfurtherallegingthat3Mwaitedtoolongtoenforceitsrights.TransWebalsoalleged3M
obtainedthepatentsthroughinequitableconductandthat3M’sattempttoenforcethepatentsconstitutedaviolationoftheantitrust
laws.InNovember2012,ajuryreturnedaverdictinfavorofTransWebonallbut
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