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This excerpt taken from the ITT 10-Q filed Apr 27, 2009. Guarantees &
Indemnities
Since ITT’s incorporation in 1920, we have acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. We do not have a liability recorded for
the historic indemnifications and are not aware of any claims or
other information that would give rise to material payments
under such indemnities.
In December of 2007, we entered into a sale leaseback type
agreement for our corporate aircraft, with the aircraft leased
back under a five-year operating lease. We have provided, under
the lease, a residual value guarantee to the counterparty in the
amount of $50.2, which is the maximum amount of undiscounted
future payments. We are obligated to make payments under the
residual value guarantee to the extent the fair value of the
aircraft is less than the residual value guarantee upon
termination of the agreement. Currently, we project the fair
value of the aircraft to be less than the residual value
guarantee. Accordingly, we recorded a loss contingency of $5.1
during the first quarter, which represents the excess of the
projected loss over a deferred gain of $5.4 recorded in
connection with the sale leaseback transaction.
ITT has a number of individually immaterial guarantees
outstanding at March 31, 2009, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. We do not
believe these payments will have any material adverse impact on
the financial position, results of operations or cash flow on a
consolidated basis in the foreseeable future.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(Dollars
and share amounts in millions, except per share amounts, unless
otherwise stated)
These excerpts taken from the ITT 10-K filed Feb 25, 2009. Guarantees &
Indemnities
Since ITT’s
incorporation in 1920, we have acquired and disposed of numerous
entities. The related acquisition and disposition agreements
contain various representation and warranty clauses and may
provide indemnities for a misrepresentation or breach of the
representations and warranties by either party. The indemnities
address a variety of subjects; the term and monetary amounts of
each such indemnity are defined in the specific agreements and
may be affected by various conditions and external factors. Many
of the indemnities have expired either by operation of law or as
a result of the terms of the agreement. We do not have a
liability recorded for the historic indemnifications and are not
aware of any claims or other information that would give rise to
material payments under such indemnities.
In December of 2007,
we entered into a sale leaseback type agreement for our
corporate aircraft, with the aircraft leased back under a
five-year operating lease. We have provided, under the lease, a
residual value guarantee to the counterparty in the amount of
$50.2, which is the maximum amount of undiscounted future
payments. We would have to make payments under the residual
value guarantee only if the fair value of the aircraft was less
than the residual value guarantee upon termination of the
agreement. At December 31, 2008, the projected fair value
of the aircraft at the end of the lease is estimated to be $2.4
less than the residual value guarantee. Since this estimated
loss does not exceed the $5.4 gain we realized from the sale of
the aircraft, but deferred as a loss contingency for the
residual value guarantee, we have not recorded any additional
accrual in our financial statements.
ITT has a number of
individually immaterial guarantees outstanding at
December 31, 2008, that may be affected by various
conditions and external forces, some of which could require that
payments be made under such guarantees. We do not believe these
payments will have any material adverse impact on the financial
position, results of operations or cash flow on a consolidated
basis in the foreseeable future.
Guarantees &
Indemnities
Since ITT’s
incorporation in 1920, we have acquired and disposed of numerous
entities. The related acquisition and disposition agreements
contain various representation and warranty clauses and may
provide indemnities for a misrepresentation or breach of the
representations and warranties by either party. The indemnities
address a variety of subjects; the term and monetary amounts of
each such indemnity are defined in the specific agreements and
may be affected by various conditions and external factors. Many
of the indemnities have expired either by operation of law or as
a result of the terms of the agreement. We do not have a
liability recorded for the historic indemnifications and are not
aware of any claims or other information that would give rise to
material payments under such indemnities.
In December of 2007,
we entered into a sale leaseback type agreement for our
corporate aircraft, with the aircraft leased back under a
five-year operating lease. We have provided, under the lease, a
residual value guarantee to the counterparty in the amount of
$50.2, which is the maximum amount of undiscounted future
payments. We would have to make payments under the residual
value guarantee only if the fair value of the aircraft was less
than the residual value guarantee upon termination of the
agreement. At December 31, 2008, the projected fair value
of the aircraft at the end of the lease is estimated to be $2.4
less than the residual value guarantee. Since this estimated
loss does not exceed the $5.4 gain we realized from the sale of
the aircraft but deferred as a loss contingency for the residual
value guarantee, we have not recorded any additional accrual in
our financial statements.
ITT has a number of
individually immaterial guarantees outstanding at
December 31, 2008, that may be affected by various
conditions and external forces, some of which could require that
payments be made under such guarantees. We do not believe these
payments will have any material adverse impact on the financial
position, results of operations or cash flow on a consolidated
basis in the foreseeable future.
This excerpt taken from the ITT 10-Q filed Oct 27, 2008. Guarantees &
Indemnities
Since ITT’s incorporation in 1920, we have acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. We do not have a liability recorded for
the historic indemnifications and are not aware of any claims or
other information that would give rise to material payments
under such indemnities.
In December of 2007, we entered into a sales-type lease
agreement for our corporate aircraft and then leased the
aircraft back under a five-year operating lease. We have
provided, under the lease, a residual value guarantee to the
counterparty in the amount of $50.2, which is the maximum amount
of undiscounted future payments. We would have to make payments
under the residual value guarantee only if the fair value of the
aircraft was less than the residual value guarantee upon
termination of the agreement. At September 30, 2008, we do
not believe that a loss contingency is probable and therefore do
not have an accrual recorded in our financial statements.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In
millions, except per share amounts, unless otherwise
stated)
ITT has a number of individually immaterial guarantees
outstanding at September 30, 2008, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. We do not
believe these payments will have any material adverse impact on
the financial position, results of operations or cash flow on a
consolidated basis in the foreseeable future.
This excerpt taken from the ITT 10-Q filed Jul 25, 2008. Guarantees &
Indemnities
Since ITT’s incorporation in 1920, we have acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. We do not have a liability recorded for
the historic indemnifications and are not aware of any claims or
other information that would give rise to material payments
under such indemnities.
In December of 2007, we entered into a sales-type lease
agreement for our corporate aircraft and then leased the
aircraft back under a five-year operating lease. We have
provided, under the lease, a residual value guarantee to the
counterparty in the amount of $50.2, which is the maximum amount
of undiscounted future payments. We would have to make payments
under the residual value guarantee only if the fair value of the
aircraft was less than the residual value guarantee upon
termination of the agreement. At June 30, 2008, we do not
believe that a loss contingency is probable and therefore do not
have an accrual recorded in our financial statements.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In millions, except per share amounts, unless otherwise
stated)
ITT has a number of individually immaterial guarantees
outstanding at June 30, 2008, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. We do not
believe these payments will have any material adverse impact on
the financial position, results of operations or cash flow on a
consolidated basis in the foreseeable future.
This excerpt taken from the ITT 10-Q filed Apr 25, 2008. Guarantees &
Indemnities
Since ITT’s incorporation in 1920, we have acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. We do not have a liability recorded for
the historic indemnifications and are not aware of any claims or
other information that would give rise to material payments
under such indemnities. Existing material indemnities are
discussed in detail below.
In December of 2007, we entered into a sales-type lease
agreement for our corporate aircraft and then leased the
aircraft back under a five-year operating lease. We have
provided, under the lease, a residual value guarantee to the
counterparty in the amount of $50.2, which is the maximum amount
of undiscounted future payments. We would have to make payments
under the residual value guarantee only if the fair value of the
aircraft was less than the residual value guarantee upon
termination of the agreement. At March 31, 2008, we do not
believe that a loss contingency is probable and therefore do not
have an accrual recorded in our financial statements.
ITT has a number of individually immaterial guarantees
outstanding at March 31, 2008, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. We do not
believe these payments will have any material adverse impact on
the financial position, results of operations or cash flow on a
consolidated basis in the foreseeable future.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In millions, except per share amounts, unless otherwise
stated)
This excerpt taken from the ITT 10-K filed Feb 28, 2008. Guarantees &
Indemnities:
Since ITT’s incorporation in 1920, we have acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. We do not have a liability recorded for
the historic indemnifications and are not aware of any claims or
other information that would give rise to material payments
under such indemnities. Existing material indemnities are
discussed in detail below.
In December of 2007, we entered into a sales-type lease
agreement for our corporate aircraft and then leased the
aircraft back under a
five-year
operating lease. We have provided, under the lease, a residual
value guarantee to the counterparty in the amount of $50.2,
which is the maximum amount of undiscounted future payments. We
would have to make payments under the residual value guarantee
only if the fair value of the aircraft was less than the
residual value guarantee upon termination of the agreement. At
December 31, 2007, we do not believe that a loss
contingency is probable and therefore do not have an accrual
recorded in its financial statements.
ITT has a number of individually immaterial guarantees
outstanding at December 31, 2007, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. We do not
believe these payments will have any material adverse impact on
the financial position, results of operations or cash flow on a
consolidated basis in the foreseeable future.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(In
millions, except per share amounts, unless otherwise
stated)
This excerpt taken from the ITT 10-Q filed Oct 26, 2007. Guarantees &
Indemnities
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to material
payments under such indemnities. Existing material indemnities
are discussed in detail below.
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In millions, except share and per share amounts, unless
otherwise stated)
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At
September 30, 2007, the Company has an accrual related to
this matter in the amount of $10.0.
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At
September 30, 2007, the Company does not believe that a
loss contingency is probable and therefore does not have an
accrual recorded in its financial statements.
In connection with the coverage in place agreement between
Goulds and Utica described in Note 16, “Commitments
and Contingencies,” the Company has provided a short-term
standby letter of credit in the amount of $10.0 to secure
repayment by Goulds of sums previously advanced by Utica under
that settlement.
This excerpt taken from the ITT 10-Q filed Jul 30, 2007. Guarantees &
Indemnities
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In
millions, except share and per share amounts, unless otherwise
stated)
material payments under such indemnities. The Company has
separately discussed material indemnities provided within the
last ten years.
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At June 30,
2007, the Company has an accrual related to this matter in the
amount of $10.0.
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At June 30,
2007, the Company does not believe that a loss contingency is
probable and therefore does not have an accrual recorded in its
financial statements.
In connection with the coverage in place agreement between
Goulds and Utica described in Note 15, “Commitments
and Contingencies,” the Company has provided a short-term
standby letter of credit in the amount of $10.0 to secure
repayment by Goulds of sums previously advanced by Utica under
that settlement.
This excerpt taken from the ITT 10-Q filed May 4, 2007. Guarantees &
Indemnities
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to material
payments under such indemnities. The Company has separately
discussed material indemnities provided within the last ten
years.
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At March 31,
2007, the Company has an accrual related to this matter in the
amount of $10.0.
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At March 31,
2007, the Company does not believe that a loss contingency is
probable and therefore does not have an accrual recorded in its
financial statements.
In connection with the coverage in place agreement between
Goulds and Utica described in Note 15, “Commitments
and Contingencies,” the Company has provided a short-term
standby letter of credit in the amount of $10.0 to secure
repayment by Goulds of sums previously advanced by Utica under
that settlement.
This excerpt taken from the ITT 10-K filed Feb 28, 2007. Guarantees &
Indemnities:
In September of 1998, the Company completed the sale of its
automotive electrical systems business to Valeo SA for
approximately $1,700. As part of the sale, the Company provided
Valeo SA with representations and warranties with respect to the
operations of the business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Valeo SA for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Valeo SA may assert new claims have expired. Under
the terms of the sales contract, the original maximum potential
liability to Valeo SA on an undiscounted basis is $680. However,
because of the lapse of time, or the fact that the parties have
resolved certain issues, at December 31, 2006, the Company
has an accrual of $7.8 which is its best estimate of the
potential exposure.
In September of 1998, the Company completed the sale of its
brake and chassis unit to Continental AG for approximately
$1,930. As part of the sale, the Company provided Continental AG
with representations and warranties with respect to the
operations of that Business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Continental AG for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Continental AG may assert new claims have expired.
Under the terms of the sales contract, the original maximum
potential liability to Continental AG on an undiscounted basis
is $950. However, because of the lapse of time, or the fact that
the parties have resolved certain issues, at December 31,
2006, the Company has an accrual of $12.7 which is its best
estimate of the potential exposure.
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to material
payments under such indemnities. The Company has separately
discussed material indemnities provided within the last ten
years.
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At
December 31, 2006, the Company has an accrual related to
this matter in the amount of $10.0.
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At
December 31, 2006, the Company does not believe that a
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(dollars in millions, except per share amounts, unless
otherwise stated)
loss contingency is probable and therefore does not have an
accrual recorded in its financial statements.
The Company has a number of individually immaterial guarantees
outstanding at December 31, 2006, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. The Company
does not believe these payments will have any material adverse
impact on the cash flow, results of operations or financial
condition of the Company on a consolidated basis in the
foreseeable future.
This excerpt taken from the ITT 10-Q filed Nov 7, 2006. Guarantees &
Indemnities
In September of 1998, the Company completed the sale of its
automotive electrical systems business to Valeo SA for
approximately $1,700. As part of the sale, the Company provided
Valeo SA with representations and warranties with respect to the
operations of the Business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Valeo SA for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Valeo SA may assert new claims have expired. Under
the terms of the sales contract, the original maximum potential
liability to Valeo SA on an undiscounted basis is $680. However,
because of the lapse of time, or the fact that the parties have
resolved certain issues, at September 30, 2006, the Company
has an accrual of $7.8 which is its best estimate of the
potential exposure.
In September of 1998, the Company completed the sale of its
brake and chassis unit to Continental AG for approximately
$1,930. As part of the sale, the Company provided Continental AG
with representations and warranties with respect to the
operations of that Business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Continental AG for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Continental AG may assert new claims have expired.
Under the terms of the sales contract, the original maximum
potential liability to Continental AG on an undiscounted basis
is $950. However, because of the lapse of time, or the fact that
the parties have resolved certain issues, at September 30,
2006, the Company has an accrual of $14.0 which is its best
estimate of the potential exposure.
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to material
payments under such indemnities. The Company has separately
discussed material indemnities provided within the last ten
years.
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At
September 30, 2006, the Company has an accrual related to
the expansion of a bridge in the amount of $10.0.
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At
September 30, 2006, the Company does not believe that a
loss contingency is probable and therefore does not have an
accrual recorded in its financial statements.
The Company has a number of individually immaterial guarantees
outstanding at September 30, 2006, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. The Company
does not believe these payments will have any material adverse
impact on the
Table of Contents
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In
millions, except share and per share amounts, unless otherwise
stated)
cash flow, results of operations or financial condition of the
Company on a consolidated basis in the foreseeable future.
This excerpt taken from the ITT 10-Q filed Aug 7, 2006. Guarantees &
Indemnities
In September of 1998, the Company completed the sale of its
automotive electrical systems business to Valeo SA for
approximately $1,700. As part of the sale, the Company provided
Valeo SA with representations and warranties with respect to the
operations of the Business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Valeo SA for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Valeo SA may assert new claims have expired. Under
the terms of the sales contract, the original maximum potential
liability to Valeo SA on an undiscounted basis is $680. However,
because of the lapse of time, or the fact that the parties have
resolved certain issues, at June 30, 2006 the Company has
an accrual of $7.8 which is its best estimate of the potential
exposure.
In September of 1998, the Company completed the sale of its
brake and chassis unit to Continental AG for approximately
$1,930. As part of the sale, the Company provided Continental AG
with representations and warranties with respect to the
operations of that Business, including: Conveyance of Title,
Employee Benefits, Tax, Product Liability, Product Recall,
Contracts, Environmental, Intellectual Property, etc. The
Company also indemnified Continental AG for losses related to a
misrepresentation or breach of the representations and
warranties. With a few limited exceptions, the indemnity periods
within which Continental AG may assert new claims have expired.
Under the terms of the sales contract, the original maximum
potential liability to Continental AG on an undiscounted basis
is $950. However, because of the lapse of time, or the fact that
the parties have resolved certain issues, at June 30, 2006
the Company has an accrual of $14.0 which is its best estimate
of the potential exposure.
Since its incorporation in 1920, the Company has acquired and
disposed of numerous entities. The related acquisition and
disposition agreements contain various representation and
warranty clauses and may provide indemnities for a
misrepresentation or breach of the representations and
warranties by either party. The indemnities address a variety of
subjects; the term and monetary amounts of each such indemnity
are defined in the specific agreements and may be affected by
various conditions and external factors. Many of the indemnities
have expired either by operation of law or as a result of the
terms of the agreement. The Company does not have a liability
recorded for the historic indemnifications and is not aware of
any claims or other information that would give rise to material
payments under such indemnities. The Company has separately
discussed material indemnities provided within the last ten
years.
The Company provided a performance bond guarantee in the amount
of $10.0 related to its real estate development activities in
Flagler County, Florida. The Company would be required to
perform under this guarantee if certain parties did not satisfy
all aspects of the development order, the most significant
aspect being the expansion of a bridge. The maximum amount of
the undiscounted future payments equals $10.0. At June 30,
2006, the Company has an accrual related to the expansion of a
bridge in the amount of $10.0.
ITT
CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS — (Continued)
(In millions, except share and per share amounts, unless
otherwise stated)
In December of 2002, the Company entered into a sales-type lease
agreement for its corporate aircraft and then leased the
aircraft back under an operating lease agreement. The Company
has provided, under the agreement, a residual value guarantee to
the counterparty in the amount of $44.8, which is the maximum
amount of undiscounted future payments. The Company would have
to make payments under the residual value guarantee only if the
fair value of the aircraft was less than the residual value
guarantee upon termination of the agreement. At June 30,
2006, the Company does not believe that a loss contingency is
probable and therefore does not have an accrual recorded in its
financial statements.
The Company has a number of individually immaterial guarantees
outstanding at June 30, 2006, that may be affected by
various conditions and external forces, some of which could
require that payments be made under such guarantees. The Company
does not believe these payments will have any material adverse
impact on the cash flow, results of operations or financial
condition of the Company on a consolidated basis in the
foreseeable future.
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