Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES Litigation We are involved in various legal proceedings, including commercial, competition, environmental, health, safety, product liability, and insurance matters. In September 2010, the Brazilian Administrative Council for Economic Defense (CADE) issued a decision against our Brazilian subsidiary, Air Products Brasil Ltda., and sev eral other Brazilian industrial gas companies for alleged anticompetitive activities. CADE imposed a civil fine of R$ 179.2 million (approxima tely $ 50 at 31 March 2016 ) on Air Products Brasil Ltda. This fine was based on a recommendation by a unit of the Brazilian Ministry of Justice , whose investigation began in 2003 , alleging violation of competition laws with respect to the sale of industrial and medical gases. The fines are based on a percentage of our total revenue in Brazil in 2003. We ha ve denied the allegations made by the authorities and filed an appeal in October 2010 with the Brazilian courts. On 6 May 2014, our appeal was granted and the fine against Air Products Brasil Ltda. was dismissed. CADE has appealed that ruling and the matte r remains pending. We, with advice of our outside legal counsel, have assessed the status of this matter and have concluded that , although an adverse final judgment a fter exhausting all appeals is possible, such a judgment is not probable. As a result , no provision has been made in the consolidated financial statements. We estimate the maximum possible loss to be the full amount of the fine of R$179.2 million ( approximately $ 50 at 31 March 2016 ) plus interest accrued thereon until final dispositio n of the proceedings. While we do not expect that any sums we may have to pay in connection with this or any other legal p roceeding would have a material adverse effect on our consolidated financial position or net cash flows, a future charge for regulator y fines or damage awards could have a significant impact on our net income in the period in which it is recorded. Environmental In the normal course of business, we are involved in legal proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA: the federal Superfund law); Resource Conservation and Recovery Act (RCRA); and similar state and foreign environmental laws relating to the designation of certain sites for investigation or remediation. Presently, t here are approximately 37 sites on which a final settlement has not been reached where we, along with others, have been designated a potentially responsible party by the Environmental Protection Agency or are otherwise engaged in investigation or r emediation, including cleanup activity at certain of our current and former manufacturing sites. We continually monitor these sites for which we have environmental exposure. Accruals for environmental loss contingencies are recorded when it is probable tha t a liability has been incurred and the amount of loss can be reasonably estimated . The consolidated balance sheets at 31 March 2016 and 30 September 2015 included an accrual of $ 77.0 and $ 80.6 , respectively, primarily as part of other noncurrent liabilities. The environmental liabilities will be paid over a period of up to 3 0 years. We estimate the exposure for environmental loss contingencies to range from $ 77 to a reasonably possible upper exposure of $ 91 as of 31 March 2016 . Actual costs to be incurred at identified sites in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Using reasonably possible alternative assumptions of the exposure lev el could result in an increase to the environmental accrual. Due to the inherent uncertainties related to environmental exposures, a significant increase to the reasonably possible upper exposure level could occur if a new site is designated, the scope of remediation is increased, a different remediation alternative is identified, or a significant increase in our proportionate share occurs. We do not expect that any sum we may have to pay in connection with environmental matters in excess of the amounts rec orded or disclosed above would have a material adverse impact on our financial position or results of operations in any one year. PACE At 31 March 2016 , $ 30.5 of the environmental accrual was related to the Pace facility. In 2006, we sold our A mines business, which included operations at Pace, Florida , and recognized a liability for retained environmental obligations associated with remediation activities at Pace. We are required by the Florida Department of Environmental Protection (FDEP) and t he United States Environmental Protection Agency (USEPA) to continue our remediation efforts. We estimated that it would take 20 years to complete the groundwater remediation, and the costs through completio n were estimated to range from $ 42 to $ 52 . As no amount within the range was a better estimate than another, we recognized a pretax expense in fiscal 2006 of $ 42 as a component of income from discontinued operations and recorded an environmental accrual of $ 42 in continuing operat ions on the consolidated balance sheets. There has been no change to the estimated exposure range related to the Pace facility. We have implemented many of the remedial correcti ve measures at the Pace facility required under 1995 Consent Orders issued by t he FDEP and the USEPA. Contaminated soils have been bioremediated , and the treated soils have been secured in a lined on-site disposal cell. Several groundwater recovery systems have been installed to contain and remove contamination from groundwater. We c ompleted an extensive assessment of the site to determine how well existing measures are working, what additional corrective measures may be needed, and whether newer remediation technologies that were not available in the 1990s might be suitable to more q uickly and effectively remove groundwater contaminants. Based on assessment results, we completed a focused feasibility study that has identified alternative approaches that may more effectively remove contaminants . We continue to review alternative remedi al approaches with the FDEP. In the first quarter of 2015, we entered into a new Consent Order with the FDEP requiring us to continue our remediation efforts at the Pace facility. We expect the costs we will incur under the new Consent Order to be consistent with our previous estimates. PIEDMONT At 31 March 2016 , $ 18.0 of the environmental accrual was related to the Piedmont site. On 30 June 2008, we sold our Elkton, Maryland , and Piedmont, South Carolina , production facilities and the r elated North American atmospheric emulsions and global pressure sensitive adhesives businesses. In connection with the sale, we recognized a liability for retained environmental obligations associated with remediation activities at the Piedmont site. This site is under active remediation for contamination caused by an insolvent prior owner. We are required by the South Carolina Department of Health and Environmental Control to address both contaminated soil and groundwater. Numerous areas of soil contaminat ion have been addressed, and contaminated groundwater is being recovered and treated. We estimat e that it will take until 2019 to complete source area remediation with groundwater recovery and treatment, continuing through 2029 . Thereafter, we are expectin g this site to go into a state of monitored natural attenuation through 2047. We recognized a pretax expense in 2008 of $ 24 as a component of income from discontinued operations and recorded an environmental liability of $ 24 in continuing operations on th e consolidated balance sheets. There ha ve been no significant change s to the estimated exposure. PA SADENA At 31 March 2016 , $ 10.6 of the environmental accrual was related to the Pasadena site. During the fourth quarter of 2012, management committed to permanently shutting down our polyurethane intermediates (PUI) production facility in Pasadena, Texas. In shutting down and dismantling the facility, we have undertaken certain obligations related to soil and groundwater contaminants. We have been pumping and treating groundwater to control off -site contaminant migration in compliance with regulatory requirements and under the approval of the Texas Commission on Environmental Quality (TCEQ). We estimate that the pump and treat system will conti nue to operate until 2042. We plan to perform additional work to address other environmental obligations at the site. This additional work includes remediating, as required, impacted soils, investigating groundwater west of the former PUI facility, performin g post closure care for two closed RCRA surface impoundment units, and establishing engineering controls. In 2012, we estimated the total exposure at this site to be $13. There has been no change to the estimated exposure . |