AR 13


Part II

Financials/Financial Statements and Supplementary Data/Notes to Consolidated Financial Statements – Note 11

For the Years Ended December 31, 2013, 2012 and 2011


The following table displays the activity and balances associated with accruals related to environmental costs included in other accruals and payables and other long-term liabilities:

2013 2012
In thousands
Balance at January 1 $ 12,818 $ 14,207
Additions to accrual 698 796
Payments (1,984) (2,229)
Release to income
Changes in foreign currency exchange rates (1) 44
Balance at December 31 $ 11,531 $ 12,818

In August 2008, the Company completed its purchase of the portion of the Bloomfield campus that Kaman Aerospace Corporation had leased from NAVAIR for many years. In connection with the purchase, the Company has assumed responsibility for environmental remediation at the facility as may be required under the Connecticut Transfer Act (the "Transfer Act") and it continues the effort to define the scope of the remediation that will be required by the Connecticut Department of Environmental Protection ("CTDEP"). The transaction was recorded by taking the undiscounted estimated remediation liability of $20.8 million and discounting it at a rate of 8% to its present value. The fair value of the Navy Property asset, which at that time approximated the discounted present value of the assumed environmental liability of $10.3 million, is included in Property, plant and equipment, net. This remediation process will take many years to complete.

The following represents estimated future payments for the undiscounted environmental remediation liability related to the Bloomfield campus as of December 31, 2013:

In thousands
2014 $ 1,810
2015 1,346
2016 919
2017 945
2018 762
Thereafter 6,518
Total $ 12,300

The Company's environmental accrual also includes estimated ongoing environmental remediation costs for the idle Moosup, CT facility and environmental remediation costs that the Company expects to incur at the former Music segment's New Hartford, CT facility and the Aerospace segment's U.K. Composites facilities. The Company continues to assess the work that may be required at each of these facilities, which may result in a change to this accrual. For further discussion of these matters, see Note 17, Commitments and Contingencies.