Commitments and Contingencies (Text Block)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies [Text Block]

Commitments and Contingencies

Guarantees and Indemnifications

We are often required to obtain standby letters of credit (LOCs) or bonds in support of our obligations for customer contracts. These standby LOCs or bonds typically provide a guarantee to the customer for future performance, which usually covers the installation phase of a contract and may, on occasion, cover the operations and maintenance phase of outsourcing contracts.

Our available lines of credit, outstanding standby LOCs, and performance bonds were as follows:



	September 30, 2017			December 31, 2016
	(in thousands)
Credit facilities
Multicurrency revolving line of credit	$	500,000		$	500,000
Long-term borrowings	(124,523		)	(97,167		)
Standby LOCs issued and outstanding	(29,095		)	(46,103		)

Net available for additional borrowings under the multi-currency revolving line of credit	$	346,382		$	356,730
Net available for additional standby LOCs under sub-facility	220,905			203,897

Unsecured multicurrency revolving lines of credit with various financial institutions
Multicurrency revolving lines of credit	$	110,055		$	91,809
Standby LOCs issued and outstanding	(20,859		)	(21,734		)
Short-term borrowings	(2,423		)	(69		)
Net available for additional borrowings and LOCs	$	86,773		$	70,006

Unsecured surety bonds in force	$	52,278		$	48,221

In the event any such standby LOC or bond is called, we would be obligated to reimburse the issuer of the standby LOC or bond; however, we do not believe that any outstanding LOC or bond will be called.

We generally provide an indemnification related to the infringement of any patent, copyright, trademark, or other intellectual property right on software or equipment within our sales contracts, which indemnifies the customer from and pays the resulting costs, damages, and attorney’s fees awarded against a customer with respect to such a claim provided that: 1) the customer promptly notifies us in writing of the claim and 2) we have the sole control of the defense and all related settlement negotiations. We may also provide an indemnification to our customers for third party claims resulting from damages caused by the negligence or willful misconduct of our employees/agents in connection with the performance of certain contracts. The terms of our indemnifications generally do not limit the maximum potential payments. It is not possible to predict the maximum potential amount of future payments under these or similar agreements.

Legal Matters

We are subject to various legal proceedings and claims of which the outcomes are subject to significant uncertainty. Our policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the liability required, if any, for these contingencies is made after an analysis of each known issue. A liability is recognized and charged to operating expense when we determine that a loss is probable and the amount can be reasonably estimated. Additionally, we disclose contingencies for which a material loss is reasonably possible, but not probable.

Warranty

A summary of the warranty accrual account activity is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Beginning balance	$	39,810		$	45,457		$	43,302		$	54,512
New product warranties	2,708			1,976			6,637			5,881
Other adjustments and expirations	(4,346		)	1,662			(2,445		)	3,697
Claims activity	(3,773		)	(4,485		)	(14,372		)	(19,488		)
Effect of change in exchange rates	523			176			1,800			184
Ending balance	34,922			44,786			34,922			44,786
Less: current portion of warranty	21,697			26,084			21,697			26,084
Long-term warranty	$	13,225		$	18,702		$	13,225		$	18,702

Total warranty expense is classified within cost of revenues and consists of new product warranties issued, costs related to extended warranty contracts, insurance and supplier recoveries, and other changes and adjustments to warranties. Warranty expense was as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
	(in thousands)
Total warranty expense	$	(3,148	)	$	3,638	$	(5,318	)	$	9,578

Warranty expense decreased during the nine months ended September 30, 2017 compared with the same period in 2016 primarily due to an insurance recovery in our Water segment of $8.0 million. This recovery is associated with warranty costs previously recognized as a result of our 2015 product replacement notification to customers who had purchased certain communication modules.

Unearned Revenue Related to Extended Warranty

A summary of changes to unearned revenue for extended warranty contracts is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Beginning balance	$	30,271		$	33,068		$	31,549		$	33,654
Unearned revenue for new extended warranties	302			352			1,006			1,366
Unearned revenue recognized	(1,096		)	(905		)	(3,163		)	(2,640		)
Effect of change in exchange rates	121			(31		)	206			104
Ending balance	29,598			32,484			29,598			32,484
Less: current portion of unearned revenue for extended warranty	4,305			4,134			4,305			4,134
Long-term unearned revenue for extended warranty within other long-term obligations	$	25,293		$	28,350		$	25,293		$	28,350

Health Benefits

We are self-insured for a substantial portion of the cost of our U.S. employee group health insurance. We purchase insurance from a third party, which provides individual and aggregate stop-loss protection for these costs. Each reporting period, we expense the costs of our health insurance plan including paid claims, the change in the estimate of incurred but not reported (IBNR) claims, taxes, and administrative fees (collectively, the plan costs).

Plan costs were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in thousands)
Plan costs	$	6,096	$	6,727	$	21,592	$	20,360

The IBNR accrual, which is included in wages and benefits payable, was as follows:



	September 30, 2017		December 31, 2016
	(in thousands)
IBNR accrual	$	2,605	$	2,441

Our IBNR accrual and expenses may fluctuate due to the number of plan participants, claims activity, and deductible limits. For our employees located outside of the United States, health benefits are provided primarily through governmental social plans, which are funded through employee and employer tax withholdings.