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Commitments and Contingencies
6 Months Ended
Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments And Contingencies [Text Block]
Note 18 – Commitments and Contingencies
The Company previously disclosed in its 2021 Form 10-K that AC Products, Inc.
 
(“ACP”), a wholly owned subsidiary,
 
in 2007,
agreed to operate two groundwater treatment systems, so as to hydraulically
 
contain groundwater contamination emanating from
ACP’s site until such time as the concentrations
 
of contaminants are below the current Federal maximum contaminant
 
level for four
consecutive quarterly sampling events. In 2014, ACP ceased operation
 
at one of its two groundwater treatment systems, as it had met
the above condition for closure. As of June 30, 2022, ACP continues to operate
 
the second groundwater treatment system, while the
Company discusses with the relevant authorities whether the second groundwater
 
treatment system meets the conditions for closure.
 
In addition, the Santa Ana Regional Water
 
Quality Control Board requested that ACP conduct additional indoor
 
and outdoor soil
vapor testing on and near the ACP site to confirm that ACP continues to
 
meet the applicable local soil vapor standards.
 
As of June 30,
2022, ACP performed such testing and is awaiting the review of the results from
 
the Santa Ana Regional Water
 
Quality Control
Board.
As of June 30, 2022, the Company believes that the range of potential-known
 
liabilities associated with the balance of the ACP
water remediation program is approximately $
0.1
 
million to $
1.0
 
million.
 
The low and high ends of the range are based on the length
of operation of the treatment system as determined by groundwater modeling.
 
Costs of operation include the operation and
maintenance of the extraction well, groundwater monitoring and
 
program management.
The Company previously disclosed in its 2021 Form 10-K that an inactive
 
subsidiary of the Company that was acquired in 1978
sold certain products containing asbestos, primarily on an installed basis, and
 
is among the defendants in numerous lawsuits alleging
injury due to exposure to asbestos.
 
During the three and six months ended June 30, 2022, there have been no
 
significant changes to
the facts or circumstances of this previously disclosed matter,
 
aside from on-going claims and routine payments associated with this
litigation.
 
Based on a continued analysis of the existing and anticipated future claims against this subsidiary,
 
it is currently projected
that the subsidiary’s total liability over
 
the next 50 years for these claims is approximately $
0.3
 
million (excluding costs of defense).
The Company previously disclosed in its 2021 Form 10-K that it is party to certain environmental
 
matters related to certain
domestic and foreign properties.
 
These environmental matters primarily require the Company
 
to perform long-term monitoring and
maintenance at each of the applicable sites.
 
During the three and six months ended June 30, 2022, there have been no significant
changes to the facts or circumstances of these previously disclosed matters,
 
aside from on-going monitoring and maintenance
activities and routine payments associated with each of the sites.
 
The Company continually evaluates its obligations related to such
matters, and based on historical costs incurred and projected costs to be incurred
 
over the next approximately 30 years, has estimated
the range of costs for all of these environmental matters, on a discounted
 
basis, to be between approximately $
5.0
 
million and $
6.0
million as of June 30, 2022, for which $
5.5
 
million was accrued within other accrued liabilities and other non-current
 
liabilities on the
Company’s Condensed Consolidated
 
Balance Sheet as of June 30, 2022.
 
Comparatively, as of December
 
31, 2021, the Company had
$
5.6
 
million accrued for with respect to these matters.
Although there can be no assurance regarding the outcome of other
 
unrelated environmental matters, the Company believes that it
has made adequate accruals for costs associated with other environmental problems
 
for which it is aware, and has accrued $
0.4
 
million
as of both June 30, 2022 and December 31, 2021, respectively,
 
to provide for such anticipated future environmental assessments and
remediation costs.
 
The Company previously disclosed in its 2021 Form 10-K that during the first six months
 
of 2021, one of the Company’s
Brazilian subsidiaries received a notice that it had prevailed on an existing
 
legal claim in regard to certain non-income (indirect) taxes
that had been previously charged and paid.
 
The matter specifically related to companies’ rights to exclude the state tax on goods
circulation (a valued-added-tax or VAT
 
equivalent, known in Brazil as “ICMS”) from the calculation of certain additional indirect
taxes (specifically the program of social integration (“PIS”) and contribution
 
for the financing of social security (“COFINS”)) levied
by the Brazilian States on the sale of goods.
 
In May 2021, the Brazilian Supreme Court concluded that ICMS should
 
not be included
in the tax base of PIS and COFINS, and confirmed the methodology for calculating the
 
PIS and COFINS tax credit claims to which
taxpayers are entitled.
 
The Company’s Brazilian entities had previously
 
filed legal or administrative disputes on this matter and are
entitled to receive tax credits and interest dating back five years preceding the
 
date of their legal claims.
 
As a result of these court
rulings in the first six months of 2021, the Company recognized non-income
 
tax credits of
67.0
 
million BRL or approximately $
13.3
million, which includes approximately $
8.4
 
million for the PIS and COFINS tax credits as well as interest on these tax credits of $
4.9
million.
 
The tax credits to which the Company’s
 
Brazilian subsidiaries are entitled are claimable once registered with the Brazilian
tax authorities which the Company subsequently completed.
 
These tax credits can be used to offset future Brazilian federal taxes
 
and
the Company currently anticipates using the full amount of credits during the
 
five year period of time permitted.
In connection with obtaining regulatory approvals for the Combination,
 
certain steel and aluminum related product lines of
Houghton were divested in August 2019. The Company previously disclosed
 
in its 2021 Form 10-K that in July 2021, the entity that
acquired these divested product lines submitted an indemnification claim
 
for certain alleged breaches of representation made by
Houghton in the agreement pursuant to which such assets had been divested.
 
The Company responded to the subject matters of the
indemnification claim and during the first quarter of 2022, the
 
matter was resolved consistent with the Company’s
 
expectations and
position that there were no amounts owed by the Company.
 
The Company previously disclosed in its 2021 Form 10-K that two of the Company’s
 
locations suffered property damages as a
result of flooding and fire, respectively.
 
The Company maintains property insurance for all of its facilities globally.
 
During the six
months ended June 30, 2022, there have been no significant changes to
 
the facts or circumstances of these previously disclosed
matters, aside from the on-going restoration of both sites.
 
The Company, its insurance
 
adjuster and insurance carrier are actively
managing the remediation and restoration activities associated with these
 
events and at this time the Company has concluded, based on
all available information and discussions with its insurance adjuster and
 
insurance carrier, that the losses were covered under
 
the
Company’s property insurance
 
coverage, net of an aggregate deductible of $
2.0
 
million.
 
The Company has received payments from
its insurers of $
2.1
 
million and has recorded an insurance receivable associated with these events (and
 
a gain on insurance recoveries
for losses incurred) of $
0.9
 
million as of June 30, 2022.
The Company is party to other litigation which management currently
 
believes will not have a material adverse effect on the
Company’s results of operations,
 
cash flows or financial condition.
 
In addition, the Company has an immaterial amount of contractual
purchase obligations.