INNOSPEC INC. Commitments Disclosure

Note 15.    Commitments and Contingencies

 

Operating leases

 

The Company has commitments under operating leases primarily for office space, motor vehicles and various items of computer and office equipment. The leases are expected to be renewed and replaced in the normal course of business. Rental expense was $4.5 million in 2015, $3.7 million in 2014 and $3.1 million in 2013. Future commitments under non-cancelable operating leases are as follows:

 

(in millions)
2016		$	3.8
2017			3.3
2018			2.6
2019			1.4
2020			1.0
Thereafter			4.2
		$	16.3

 

Environmental remediation obligations

 

Commitments in respect of environmental remediation obligations are disclosed in Note 12 of the Notes to the Consolidated Financial Statements.

 

Contingencies

 

Legal matters

 

While we are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, employee and product liability claims, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party, or of which any of their property is subject. It is possible however, that an adverse resolution of an unexpectedly large number of such individual items could in the aggregate have a material adverse effect on results of operations for a particular year or quarter.

 

Guarantees

 

The Company and certain of the Company’s consolidated subsidiaries are contingently liable for certain obligations of affiliated companies primarily in the form of guarantees of debt and performance under contracts entered into as a normal business practice. This includes guarantees of non-U.S. excise taxes and customs duties. As at December 31, 2015, such guarantees which are not recognized as liabilities in the consolidated financial statements amounted to $4.2 million.

 

Under the terms of the guarantee arrangements, generally the Company would be required to perform should the affiliated company fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements have recourse provisions that would enable the Company to recover any payments made under the terms of the guarantees from securities held of the guaranteed parties’ assets.

 

The Company and its affiliates have numerous long-term sales and purchase commitments in their various business activities, which are expected to be fulfilled with no adverse consequences material to the Company.