Contingencies and Commitments
Environmental Proceedings
The Company has an active program for environmental compliance that includes the identification of environmental projects and estimating the impact on the Company’s financial performance and available resources. Environmental expenditures that relate to current operations, such as wastewater treatment and control of airborne emissions, are either expensed or capitalized as appropriate. The Company records reserves for the probable costs for identified environmental remediation projects. The Company’s environmental engineers perform routine ongoing analyses of the remediation sites and will use outside consultants to assist in their analyses from time to time. Reserve accruals are based upon their analyses and are established based on the reasonably estimable loss or range of loss. The accruals are revised for the results of ongoing studies, changes in strategies, inflation, and for differences between actual and projected costs. The accruals may also be affected by rulings and negotiations with regulatory agencies. The timing of payments often lags the accrual, as environmental projects typically require a number of years to complete.
The environmental reserves recorded represent the Company's best estimate of what is reasonably possible and cover existing or currently foreseen projects based upon current facts and circumstances. For sites where the investigative work and work plan development are substantially complete, the Company does not believe that it is reasonably possible that the cost to resolve environmental matters will be materially different than what has been accrued. For sites that are in the preliminary stages of investigation, the ultimate loss contingencies cannot be reasonably determined at the present time. As facts and circumstances change, the ultimate cost may be revised, and the recording of additional costs may be material in the period in which the additional costs are accrued. The Company does not believe that the ultimate liability for environmental matters will have a material impact on its financial condition or liquidity due to the nature of known environmental matters and the extended period of time over which environmental remediation normally takes place.
The undiscounted reserve balance at the beginning of the year, the amounts expensed and paid, and the balance at December 31, 2025 and 2024 are as follows:
| | | | | | | | | | | | | | |
| (Thousands) | | 2025 | | 2024 |
| Reserve balance at beginning of year | | $ | 4,571 | | | $ | 4,556 | |
| Expensed | | 401 | | | 550 | |
| Paid | | (2,499) | | | (535) | |
| Reserve balance at end of year | | $ | 2,473 | | | $ | 4,571 | |
| Ending balance recorded in: | | | | |
| Other liabilities and accrued items | | $ | 1,043 | | | $ | 2,481 | |
| Other long-term liabilities | | 1,430 | | | 2,090 | |
The majority of expenses in both 2025 and 2024 was for various remediation projects at the Elmore, Ohio plant site.
Asset Retirement Obligations
The Company has asset retirement obligations related to its mine in Utah, as well as for certain leased facilities where the Company is contractually obligated to restore the facility back to its original condition at the end of the lease. The following represents a roll forward of the Company's asset retirement obligation liabilities for the years ended December 31, 2025 and 2024:
| | | | | | | | | | | | | | |
| (Thousands) | | 2025 | | 2024 |
| Asset retirement obligation at beginning of period | | $ | 2,846 | | | $ | 2,648 | |
| Accretion expense | | 199 | | | 198 | |
| Asset retirement obligation at end of period | | $ | 3,045 | | | $ | 2,846 | |
These obligations are reflected in Other long-term liabilities on the Consolidated Balance Sheet.
Other
The Company is subject to various legal or other proceedings that relate to the ordinary course of its business. The Company believes that the resolution of these proceedings, individually or in the aggregate, will not have a material adverse impact upon the Company’s consolidated financial statements.
At December 31, 2025, the Company had outstanding letters of credit totaling $69.3 million related to workers’ compensation, consigned precious metal guarantees, environmental remediation issues, and other matters.