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COMMITMENTS AND CONTINGENCIES | 3 Months Ended
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Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, we are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues and commercial or contractual disputes and acquisitions or divestitures. We will continue to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claim, as well as our current reserves and insurance coverage, we do not expect that such legal proceedings will have a material adverse impact on our financial statements, unless otherwise noted below. Asbestos Matters Subsidiaries of ITT, including ITT LLC and Goulds Pumps LLC, have been sued, along with many other companies in product liability lawsuits alleging personal injury due to asbestos exposure. These claims generally allege that certain products sold by our subsidiaries prior to 1985 contained a part manufactured by a third party (e.g., a gasket) which contained asbestos. To the extent these third-party parts may have contained asbestos, it was encapsulated in the gasket (or other) material and was non-friable. As of March 31, 2021, there were approximately 26 thousand pending claims against ITT subsidiaries, including Goulds Pumps LLC, filed in various state and federal courts alleging injury as a result of exposure to asbestos. Activity related to these asserted asbestos claims during the period was as follows:
Claims data presented in thousands |  |  |
Pending claims – Beginning | 25.3 |  |  |
New claims | 1.0 |  |  |
Settlements | (0.2) |  |  |
Dismissals | (0.5) |  |  |
Pending claims – Ending | 25.6 |  |  |
Frequently, plaintiffs are unable to identify any ITT LLC or Goulds Pumps LLC products as a source of asbestos exposure. Our experience to date is that a majority of resolved claims are dismissed without any payment from ITT subsidiaries. Management believes that a large majority of the pending claims have little or no value. In addition, because claims are sometimes dismissed in large groups, the average cost per resolved claim can fluctuate significantly from period to period. ITT expects more asbestos-related suits will be filed in the future, and ITT will continue to aggressively defend or seek a reasonable resolution, as appropriate. Asbestos litigation is a unique form of litigation. Frequently, the plaintiff sues a large number of defendants and does not state a specific claim amount. After filing a complaint, the plaintiff engages defendants in settlement negotiations to establish a settlement value based on certain criteria, including the number of defendants in the case. Rarely do the plaintiffs seek to collect all damages from one defendant. Rather, they seek to spread the liability, and thus the payments, among many defendants. Estimating our exposure to pending asbestos claims and those that may be filed in the future is subject to significant uncertainty and risk as there are multiple variables that can affect the timing, severity, quality, quantity and resolution of claims, including uncertainty related to asbestos claims and estimated costs arising from the long latency period prior to the manifestation of an asbestos-related disease, changes in available medical treatments and changes in medical costs, changes in plaintiff behavior resulting from bankruptcies of other companies that are or could be co-defendants, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case and the impact of potential legislative or judicial changes. Additionally, future insurance insolvencies or settlement agreements with insurers could impact the overall recoverability of our asbestos-related asset. The asbestos liability and related receivables reflect management’s best estimate of future events. However, future events affecting the key factors and other variables for either the asbestos liability or the related receivables could cause actual costs or recoveries to be materially higher or lower than currently estimated. Due to these uncertainties, it is difficult to predict the ultimate cost of resolving all pending and unasserted asbestos claims. We believe it is possible that future events affecting the key factors and other variables in estimating our liability and expected recoveries could have a material adverse effect on our financial statements. Settlement Agreements The Company periodically enters into settlement agreements with insurers to settle responsibility for insurance claims. Under the terms of the settlements, the insurers agree to a payment or specified series of payments to a Qualified Settlement Fund for past costs and/or agree to provide coverage for certain future asbestos claims on specified terms and conditions. In March 2020, we finalized a settlement agreement with a group of insurers to settle responsibility for claims under certain insurance policies for a lump sum payment of $66.4, resulting in a benefit of $52.5. Asbestos-Related Costs (Benefit), Net In the third quarter of 2020, we extended the measurement period over which we estimate our asbestos liability to include pending claims and claims estimated to be filed through 2052, including legal fees, reflecting the full time period over which we currently expect claims to be filed against us. Previous estimates included pending claims and claims expected to be filed over the next 10 years. The following table provides a rollforward of the estimated asbestos liability and related assets for the three months ended March 31, 2021 and 2020.
| 2021 |  | 2020
For the Three Months Ended March 31 | Liability |  | Asset |  | Net |  | Liability |  | Asset |  | Net
Beginning balance | $ | 932.0 |  |  | $ | 444.7 |  |  | $ | 487.3 |  |  | $ | 817.6 |  |  | $ | 386.8 |  |  | $ | 430.8 |
Asbestos provision(a) | 1.4 |  |  | (1.0) |  |  | 2.4 |  |  | 14.5 |  |  | 2.7 |  |  | 11.8 |
Insurance settlement agreements | — |  |  | — |  |  | — |  |  | — |  |  | 52.5 |  |  | (52.5) |
Net cash activity(a) | (23.5) |  |  | (21.9) |  |  | (1.6) |  |  | (27.3) |  |  | (21.2) |  |  | (6.1) |
Ending balance | $ | 909.9 |  |  | $ | 421.8 |  |  | $ | 488.1 |  |  | $ | 804.8 |  |  | $ | 420.8 |  |  | $ | 384.0 |
Current portion | $ | 91.6 |  |  | $ | 91.0 |  |  |  |  | $ | 86.3 |  |  | $ | 67.2 |  |  |
Noncurrent portion | $ | 818.3 |  |  | $ | 330.8 |  |  |  |  | $ | 718.5 |  |  | $ | 353.6 |  |  |
(a)Includes certain administrative costs such as legal-related costs for insurance asset recoveries. The asbestos provision in the first quarter of 2020 includes amounts to maintain a rolling 10-year provision prior to the transition to a full horizon estimate. Environmental Matters In the ordinary course of business, we are subject to federal, state, local, and foreign environmental laws and regulations. We are responsible, or are alleged to be responsible, for ongoing environmental investigation and site remediation. These sites are in various stages of investigation or remediation and in many of these proceedings our liability is considered de minimis. We have received notification from the U.S. Environmental Protection Agency, and from similar state and foreign environmental agencies, that a number of sites formerly or currently owned or operated by ITT, and other properties or water supplies that may be or have been impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation or remediation. These sites include instances where we have been identified as a potentially responsible party under federal and state environmental laws and regulations. The following table provides a rollforward of the estimated environmental liability for the three months ended March 31, 2021 and 2020.
For the Three Months Ended March 31 | 2021 |  | 2020
Environmental liability - beginning balance | $ | 58.3 |  |  | $ | 61.9 |
Change in estimates for pre-existing accruals: |  |  |
Continuing operations | (0.1) |  |  | — |
Discontinued operations | — |  |  | (1.6) |
Payments | (2.0) |  |  | (1.6) |
Foreign currency | (0.1) |  |  | (0.2) |
Environmental liability - ending balance | $ | 56.1 |  |  | $ | 58.5 |
Environmental-related assets, including a Qualified Settlement Fund and estimated recoveries from insurance providers and other third parties, were $16.5 and $22.2 as of March 31, 2021 and 2020, respectively. We are currently involved with 27 active environmental investigation and remediation sites. As of March 31, 2021, we have estimated the potential high-end liability range of environmental-related matters to be $96.8. As actual costs incurred at identified sites in future periods may vary from our current estimates given the inherent uncertainties in evaluating environmental exposures, management believes it is possible that the outcome of these uncertainties may have a material adverse effect on our financial statements.

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