Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and ContingenciesCommitments

Operating lease rental expense for factories, service and distribution locations, offices, and equipment was as follows:



	Year Ended December 31,
	2018		2017		2016

	(in thousands)
Rental expense	$	24,453	$	14,824	$	14,232

Future minimum lease payments at December 31, 2018, under noncancelable operating leases with initial or remaining terms in excess of one year are as follows:



Year Ending December 31,	Minimum Payments
	(in thousands)
2019	$	17,456
2020	14,234
2021	12,007
2022	9,764
2023	9,895
Beyond 2023	26,703
Future minimum lease payments	$	90,059

Rent expense is recognized straight-line over the lease term, including renewal periods if reasonably assured. We lease most of our sales and distribution locations and administrative offices. Our leases typically contain renewal options similar to the original terms with lease payments that increase based on an index.Guarantees and Indemnifications

We are often required to obtain standby letters of credit (LOCs) or bonds in support of our obligations for customer contracts. These standby LOCs or bonds typically provide a guarantee to the customer for future performance, which usually covers the installation phase of a contract and may, on occasion, cover the operations and maintenance phase of outsourcing contracts.

Our available lines of credit, outstanding standby LOCs, and bonds are as follows:



	At December 31,
	2018			2017

	(in thousands)
Credit facilities⁽¹⁾
Multicurrency revolving line of credit	$	500,000		$	500,000
Long-term borrowings	—			(125,414		)
Standby LOCs issued and outstanding	(40,983		)	(31,881		)
Net available for additional borrowings under the multi-currency revolving line of credit	$	459,017		$	342,705

Net available for additional standby LOCs under sub-facility	$	259,017		$	218,119

Unsecured multicurrency revolving lines of credit with various financial institutions
Multicurrency revolving line of credit	$	108,039		$	110,477
Standby LOCs issued and outstanding	(19,386		)	(21,030		)
Short-term borrowings⁽²⁾	(2,232		)	(916		)
Net available for additional borrowings and LOCs	$	86,421		$	88,531

Unsecured surety bonds in force	$	94,365		$	51,344


⁽¹⁾	Refer to "Note 6: Debt" for details regarding our secured credit facilities, including the refinancing of the 2015 credit facility.


⁽²⁾	Short-term borrowings are included in other current liabilities on the Consolidated Balance Sheets.

In the event any such standby LOC or bond is called, we would be obligated to reimburse the issuer of the standby LOC or bond; however, we do not believe that any outstanding LOC or bond will be called.

We generally provide an indemnification related to the infringement of any patent, copyright, trademark, or other intellectual property right on software or equipment within our sales contracts, which indemnifies the customer from and pays the resulting costs, damages, and attorney's fees awarded against a customer with respect to such a claim provided that (a) the customer promptly notifies us in writing of the claim and (b) we have the sole control of the defense and all related settlement negotiations. We may also provide an indemnification to our customers for third-party claims resulting from damages caused by the negligence or willful misconduct of our employees/agents in connection with the performance of certain contracts. The terms of our indemnifications generally do not limit the maximum potential payments. It is not possible to predict the maximum potential amount of future payments under these or similar agreements.Legal MattersWe are subject to various legal proceedings and claims of which the outcomes are subject to significant uncertainty. Our policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the liability required, if any, for these contingencies is made after an analysis of each known issue. A liability is recognized and charged to operating expense when we determine that a loss is probable and the amount can be reasonably estimated. Additionally, we disclose contingencies for which a material loss is reasonably possible, but not probable.Warranty

A summary of the warranty accrual account activity is as follows:



	Year Ended December 31,
	2018			2017			2016

	(in thousands)
Beginning balance	$	34,862		$	43,302		$	54,512
Assumed liabilities from acquisition	12,946			—			—
New product warranties	3,772			7,849			7,987
Other adjustments and expirations, net	22,741			(393		)	5,933
Claims activity	(12,753		)	(18,094		)	(24,364		)
Effect of change in exchange rates	(1,125		)	2,198			(766		)
Ending balance	60,443			34,862			43,302
Less: current portion of warranty	47,205			21,150			24,874
Long-term warranty	$	13,238		$	13,712		$	18,428

Total warranty expense is classified within cost of revenues and consists of new product warranties issued, costs related to insurance and supplier recoveries, and other changes and adjustments to warranties. Warranty expense was as follows:



	Year Ended December 31,
	2018		2017			2016

	(in thousands)
Total warranty expense (benefit)	$	26,513	$	(2,054	)	$	13,920

Warranty expense increased during the year ended December 31, 2018 compared with the same period in 2017. This increase is primarily driven by a warranty reserve of $11.4 million for replacement of certain gas meters in our Device Solutions segment in 2018, as well as an insurance recovery of $8.0 million received in 2017, which was associated with product replacement costs originally recognized in 2015.Health Benefits

We are self-insured for a substantial portion of the cost of our U.S. employee group health insurance. We purchase insurance from a third-party, which provides individual and aggregate stop loss protection for these costs. Each reporting period, we expense the costs of our health insurance plan including paid claims, the change in the estimate of incurred but not reported (IBNR) claims, taxes, and administrative fees (collectively, the plan costs).

Plan costs were as follows:



	Year Ended December 31,
	2018		2017		2016

	(in thousands)
Plan costs	$	41,543	$	30,521	$	27,276

IBNR accrual, which is included in wages and benefits payable, was as follows:



	At December 31,
	2018		2017

	(in thousands)
IBNR accrual	$	3,643	$	2,664

Our IBNR accrual and expenses may fluctuate due to the number of plan participants, claims activity, and deductible limits. For our employees located outside of the United States, health benefits are provided primarily through governmental social plans, which are funded through employee and employer tax withholdings.