COMMITMENTS AND CONTINGENCIES
In 2011, the Company became aware of a review of alleged issues with certain underground piping connections installed in filling stations in France owned by the French Subsidiary of Exxon Mobile, Esso S.A.F. A French court ordered that a designated, subject-matter expert review 103 filling stations to determine what, if any, damages are present and the cause of those damages. The Company has participated in this investigation since 2011, along with several other third parties including equipment installers, engineering design firms who designed and provided specifications for the stations, and contract manufacturers of some of the installed equipment. In May 2022, the subject-matter expert issued its final report, which indicates that total damages incurred by Esso amounted to approximately 9.5 million Euro. It is the Company’s position that its products were not the cause of any alleged damage. The Company submitted its response to the expert's final report in February 2023. The Company cannot predict the ultimate outcome of this matter. Any exposure related to this matter is neither probable nor reasonably estimable at this time. If payments result from a resolution of this matter, depending on the amount, they could have a material effect on the Company’s financial position, results of operations, or cash flows.
The Company is defending other various claims and legal actions which have arisen in the ordinary course of business. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, these claims and legal
actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.
At December 31, 2023, the Company had $11.1 million of commitments primarily for capital expenditures and the purchase of raw materials to be used in production.
At December 31, 2023, the Company has a contingent consideration liability with an estimated fair value of $3.0 million that could result in a payment up to $5.0 million if a future profitability milestone is achieved.
The changes in the carrying amount of the warranty accrual, as recorded in the “Accrued expenses and other current liabilities” line of the Company’s consolidated balance sheets for 2023 and 2022, are as follows:
| | | | | | | | | | | | | | |
| (In millions) | | 2023 | | 2022 |
| Beginning balance | | $ | 11.2 | | | $ | 10.5 | |
| Accruals related to product warranties | | 11.8 | | | 10.4 | |
| Additions related to acquisitions | | — | | | — | |
| Reductions for payments made | | (13.7) | | | (9.7) | |
| Ending balance | | $ | 9.3 | | | $ | 11.2 | |
The Company maintains certain warehouses, distribution centers, office space, and equipment operating leases. The Company also has lease agreements that are classified as financing. However, these financing leases are immaterial to the Company.
The components of the Company's operating lease portfolio as of 2023, 2022, and 2021 are as follows:
| | | | | | | | | | | | | | | | | | | | |
| Lease Cost (In millions): | | 2023 | | 2022 | | 2021 |
| Operating lease cost | | $ | 18.8 | | | $ | 17.4 | | | $ | 13.6 | |
| Short-term lease cost | | $ | 0.5 | | | $ | 0.2 | | | $ | 0.6 | |
| | | | | | |
| Other Information: | | | | | | |
| Weighted-average remaining lease term | | 4.0 years | | 4.2 years | | |
| Weighted-average discount rate | | 4.3 | % | | 3.6 | % | | |
The Company has entered into lease agreements with aggregate future minimum payments of approximately $2.2 million that have not yet commenced as of December 31, 2023.
The future minimum rental payments for non-cancellable operating leases as of December 31, 2023, are as follows:
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| (In millions) | Total | | 2024 | | 2025 | | 2026 | | 2027 | | 2028 | | Thereafter |
| Undiscounted future minimum rental payments | $ | 61.9 | | | $ | 19.5 | | | $ | 15.3 | | | $ | 11.3 | | | $ | 7.8 | | | $ | 4.5 | | | $ | 3.5 | |
| Less: Imputed Interest | 6.0 | | | | | | | | | | | | | |
| Present value of lease liabilities | $ | 55.9 | | | | | | | | | | | | | |