CONTINGENCIES AND COMMITMENTS

In August 2010, the California Air Resources Board (“CARB”) and South Coast Air Quality Management District (“SCAQMD”) filed civil complaints in the Los Angeles Superior Court against the Company and Franklin Fueling Systems, Inc. The complaints related to a third-party-supplied component part of the Company's Healy 900 Series nozzle, which is part of the Company's Enhanced Vapor Recovery (“EVR”) Systems installed in California gasoline filling stations. This part, a diaphragm, was the subject of a retrofit during the first half of 2008. As the Company previously reported, in October 2008 CARB issued a Notice of Violation to the Company alleging that the circumstances leading to the retrofit program violated California statutes and regulations.

The claims in the complaints mirrored those that CARB presented to the Company in the Notice of Violation, and included claims that the Company negligently and intentionally sold nozzles with a modified diaphragm without required CARB certification. Those complaints were consolidated into one case in the Superior Court of California, County of Los Angeles (People of the State of California vs. Franklin Fueling Systems, Inc. et al.) which was tried in the later part of December 2012 and early part of January 2013 (“CARB Case”).

On July 25, 2013, the Court issued a Final Statement of Decision (“Decision”) in the CARB Case. In its Decision, the Court found on behalf of the Company and issued a complete defense verdict. Judgment was entered on August 27, 2013. CARB has noticed an appeal from that judgment.

An Amended Judgment, awarding the Company $0.1 million in costs was entered on January 22, 2014.

Neither of these suits have had any effect on CARB's certification of the Company's EVR System or any other products of the Company or its subsidiaries, and did not interfere with continuing sales. CARB has never decertified the Company's EVR System and has never proposed to do so.

The Company is defending various other claims and legal actions, including environmental matters, which have arisen in the

ordinary course of business. In the opinion of management, based on current knowledge of the facts and after discussion with

counsel, these claims and legal actions can be successfully defended or resolved without a material adverse effect on the

Company’s financial position, results of operations, and net cash flows.

Total rent expense charged to operations for operating leases including contingent rentals was $11.0 million, $9.5 million, and $8.8 million for 2013, 2012, and 2011, respectively.

The future minimum rental payments for non-cancelable operating leases as of December 28, 2013, are as follows:



(In millions)	2014		2015		2016		2017		2018
Future minimum rental payments	$	8.6	$	3.3	$	2.3	$	1.2	$	1.1

Rental commitments subsequent to 2018 are not significant by year, but aggregated are $1.4 million in total.

At December 28, 2013, the Company had $11.7 million of commitments primarily for the purchase of machinery and equipment as well as conditional agreements related to building expansions.

The changes in the carrying amount of the warranty accrual, as recorded in "Accrued expenses" in the Company's consolidated balance sheets for 2013 and 2012, are as follows:



(In millions)	2013			2012
Beginning balance	$	9.7		$	9.9
Accruals related to product warranties	9.1			6.8
Additions related to acquisitions	—			0.4
Reductions for payments made	(9.3		)	(7.4		)
Ending balance	$	9.5		$	9.7