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Guarantees
6 Months Ended
Jan. 31, 2012
Guarantees [Abstract]  
Guarantees

Note I – Guarantees

 

The Company and Caterpillar Inc. equally own the shares of Advanced Filtration Systems Inc. (AFSI), an unconsolidated joint venture, and guarantee certain debt of the joint venture. As of January 31, 2012 the joint venture had $23.0 million of outstanding debt, of which the Company guarantees half. For the three and six months ended January 31, 2012, the Company recorded $0.1 million and $0.8 million of earnings for this equity method investment, respectively. The Company recorded $0.7 million and $0.9 million of earnings for this equity method investment during the three and six months ended January 31, 2011, respectively. During the three and six months ended January 31, 2012 and 2011, the Company also recorded royalty income of $1.5 million and $3.2 million, respectively, and $1.6 million and $3.3 million, respectively, related to AFSI.

 

At January 31, 2012, the Company had a contingent liability for standby letters of credit totaling $10.9 million that have been issued and are outstanding. The letters of credit guarantee payment to third parties in the event the Company is in breach of insurance contract terms or other commercial contract terms as detailed in each letter of credit. At January 31, 2012, there were no amounts drawn upon these letters of credit.