Note 1 - Formation and Background Note 2 - Summary of Significant Accounting Policies Note 3 - Change in Accounting Principle Note 4 - Acquisitions Note 5 - Fair Value of Financial Instruments Note 6 - Accounts Receivable Note 7 - Inventories Note 8 - Other Current Assets Note 9 - Property, Plant and Equipment Note 10 - Goodwill and Other Intangible Assets Note 11 - Accounts Payable Note 12 - Accrued and Other Current Liabilities Note 13 - Debt Note 14 - Commitments and Contingencies Note 15 - Stockholders' Equity Note 16 - Earnings Per Share Note 17 - Income Taxes Note 18 - Retirement Benefits Note 19 - Stock and Other Plans Note 20 - Restructuring and Other Charges Note 21 - Segment and Geographical Financial Information Note 22 - Related Parties Note 23 - Subsequent Events Note 24 - Accounting Pronouncements Note 25 - Unaudited Quarterly Financial Information NOTE 14 COMMITMENTS AND CONTINGENCIES The Company leases certain logistics, office and manufacturing facilities. The following is a summary of annual future minimum lease and rental commitments under operating leases as of December 31, 2002 (in millions): Rent expense included in the accompanying statement of operations amounted to $23.1 million in 2002, $20.5 million in 2001 and $17.6 million in 2000. As of December 31, 2002, the Company had letters of credit outstanding totaling $27.2 million, which primarily represent guarantees issued to local banks in support of borrowings by foreign subsidiaries of the Company, guarantees with respect to various insurance activities, as well as performance letters of credit issued in the normal course of business. There are various lawsuits and claims pending against the Company involving contract, product liability and other issues. In addition, the Company has assumed certain specified insurance liabilities, including liabilities related to an inactive insurance subsidiary, primarily related to certain historical businesses of its former parent. In view of the Company’s financial condition and the accruals established for related matters, based on management’s knowledge to date, management does not believe that the ultimate liability, if any, related to these matters will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company is currently involved in various stages of investigation and remediation related to environmental protection matters. The Company cannot predict the potential costs related to environmental matters and the possible impact on future operations given the uncertainties regarding the extent of the required cleanup, the complexity and interpretation of applicable laws and regulations, the varying costs of alternative cleanup methods and the extent of the Company’s responsibility. However, these costs could be material. The Company records accruals for environmental liabilities, based on current interpretations of environmental laws and regulations, when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company calculates estimates based upon reports prepared by environmental specialists and management’s knowledge and experience with these environmental matters. The Company includes in these estimates potential costs for investigation, remediation and operation and maintenance of cleanup sites. Accrued liabilities for environmental matters were $31.0 million and $29.8 million at December 31, 2002 and 2001, respectively. Although these environmental liabilities do not include third-party recoveries, the Company may be subject to indemnification from third parties for liabilities relating to certain sites. Management believes that this accrual is adequate for the environmental liabilities the Company expects to incur. As a result, the Company believes that the ultimate liability with respect to environmental matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, the Company may be subject to additional remedial or compliance costs due to future events, such as changes in existing laws and regulations, changes in agency direction or enforcement policies, developments in remediation technologies or changes in the conduct of the Company’s operations, which could have a material adverse effect on the Company’s financial position, results of operations or cash flows.