Commitments and Contingencies

Purchase Commitments

The Company enters into contracts with a network of contract manufacturers that require them to provide us with specific finished products and provide for minimum production commitments. Most of our agreements with our contract manufacturers expire in 2018 and will thereafter be automatically renewed for consecutive one-year terms until notice of non-renewal is given. The Company also enters into contracts for the purchase of several of its main ingredients. Such contracts call for minimum purchase requirements and typically cover one year or one crop season and are renewed annually.

The following table summarizes our future minimum purchase commitments as of December 31, 2017:



	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
(dollars in thousands)
Finished goods minimum purchase obligations	$	15,863	$	13,596	$	2,267	$	—	$	—
Raw material purchase obligations	456,909		333,789		123,120		—		—
Total contractual obligations	$	472,772	$	347,385	$	125,387	$	—	$	—

Litigation & Settlements

We are a party to a number of pending claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, workers’ compensation and other employee claims, and claims relating to our advertising and intellectual property.

We maintain general and other liability insurance; however, certain costs of defending lawsuits are not covered by or are only partially covered by insurance policies, and our insurance carriers could refuse to cover certain claims in whole or in part. We regularly evaluate our ultimate liability with respect to such claims and lawsuits. We accrue potential losses from litigation as they become probable and estimable.

We do not consider our ultimate liability with respect to any single claim or lawsuit, or the aggregate of such claims and lawsuits, to be material in relation to our consolidated financial condition, results of operations, or our cash flows taken as a whole.

Nestlé Purina and Related Litigations

On November 2, 2016, we entered into a settlement agreement with Nestlé Purina Petcare Company (“Nestlé Purina”) pursuant to which we paid Nestlé Purina $32.0 million, each party dismissed all of its claims and counterclaims against the other, including claims raised in the parties’ longstanding litigation in the United States District Court for the Eastern District of Missouri, with prejudice, and we dismissed, with prejudice, our claims against Nestlé Purina’s advertising and public relations agencies (the “Nestlé Purina Settlement”).

On December 9, 2015, we entered into a settlement agreement to resolve thirteen consolidated class action lawsuits in the U.S. (the “Class Action Settlement”). Under the terms of the Class Action Settlement, we agreed to pay $32.0 million into a settlement fund, and on January 8, 2016, we paid this $32.0 million into an escrow account pending final court approval. Attorneys’ fees awarded by the court and all costs of notice and claims administration were paid from the settlement fund.