Note 15 — Commitments and contingent liabilities

Operating leases: The Company uses various leased facilities and equipment in its operations. The lease terms for these leased assets vary depending on the terms of the applicable lease agreement. At December 31, 2013, the Company had no residual value guarantees related to its operating leases.

Future minimum lease payments as of December 31, 2013 under noncancelable operating leases are as follows:

	Future Lease Payments
	(Dollars in thousands)
2014	$	21,700
2015		17,000
2016		13,700
2017		11,800
2018 and thereafter		46,200

As of December 31, 2013, the Company has recorded approximately $13.6 million in property, plant and equipment representing the estimated fair value of the Company’s percentage of the costs to construct buildings under two separate build-to-suit leases. One build-to-suit lease relates to the Company’s corporate headquarters, which represents approximately $9.6 million of the asset recorded as of December 31, 2013. Construction of the corporate headquarters has been completed and the lease commenced on February 1, 2014. The estimated fair value of the Company’s percentage of the costs to construct the corporate headquarters at the end of the construction period is $11.2 million. The second build-to-suit lease was entered into in August of 2013 and relates to a United States operating facility. Construction on the second build-to-suit facility commenced shortly before the end of the third quarter of 2013 and is expected to be completed in October 2014. The estimated fair value of the Company’s percentage of the construction costs to complete the second build-to-suit lease is approximately $23.0 million. For accounting purposes, the Company is deemed the owner of the asset during the construction period and is required to record the estimated fair value of the Company’s percentage of the construction costs as construction in progress during the construction period and record a related current liability in the same amount. These amounts do not reflect the Company’s cash obligations, but represent the landlord’s costs to construct the Company’s portion of the building and tenant improvements. On February 1, 2014, the Company derecognized the assets and related liabilities of the corporate headquarters upon commencement of the respective lease terms.

Rental expense under operating leases was $26.4 million, $24.0 million and $26.3 million in 2013, 2012 and 2011, respectively.

Environmental: The Company is subject to contingencies as a result of environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the United States Comprehensive Environmental Response, Compensation and Liability Act, often referred to as Superfund, the United States Resource Conservation and Recovery Act and similar state laws. These laws require the Company to undertake certain investigative and remedial activities at sites where the Company conducts or once conducted operations or at sites where Company-generated waste was disposed.

Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At December 31, 2013 and 2012, the Company has recorded approximately $2.5 million and $1.9 million, respectively, in accrued liabilities and approximately $5.8 million and $6.9 million, respectively, in other liabilities relating to these matters. Considerable uncertainty exists with respect to these liabilities and, if adverse changes in circumstances occur, potential liability may exceed the amount accrued as of December 31, 2013. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 15-20 years.

Litigation: The Company is a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, intellectual property, employment and environmental matters. As of December 31, 2013 and 2012, the Company has recorded reserves of approximately $6.8 million and $2.3 million, respectively, in connection with such contingencies, representing its best estimate of the cost within the range of estimated possible loss that will be incurred to resolve these matters. Of the $6.8 million reserved for at December 31, 2013, $1.4 million pertains to discontinued operations.

Based on information currently available, advice of counsel, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred.

Tax audits and examinations: The Company and its subsidiaries are routinely subject to tax examinations by various taxing authorities. As of December 31 2013, the most significant tax examinations in process were in Canada, the Czech Republic, Germany and Austria. In conjunction with these examinations and as a regular and routine practice, the Company may establish reserves or adjust existing reserves with respect to uncertain tax positions. Accordingly, developments occurring with respect to these examinations, including resolution of uncertain tax positions, could result in increases or decreases to the Company’s recorded tax liabilities, which could impact the Company’s financial results.

Other: The Company has various purchase commitments for materials, supplies and items of permanent investment incident to the ordinary conduct of business. On average, such commitments are not at prices in excess of current market prices.