Notes to Financial Statements
NOTE 13—Commitments and Contingencies
The following is a summary of annual future minimum
lease and rental commitments under operating leases as of
December 31, 2000 (in millions):
Total rental expense included in the accompanying statement
of operations amounted to $17.6 million in 2000, $18.4 million
in 1999, and $17.4 million in 1998. At December 31, 2000, the
Company had letters of credit outstanding totaling $50.4 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. In addition, the Company has $6.4 million of insurance
related letters of credit related to its inactive insurance
subsidiary, each of which is collateralized by the cash of such
subsidiary.
In August 2000, the Company became a founding member of the
New Health Exchange, an internet healthcare exchange founded
by the Company, AmeriSource Health Corporation, Cardinal Health,
Inc. and McKesson HBOC, Inc. Pursuant to the Limited Liability
Company Agreement executed by Fisher, Fisher has committed to
invest approximately $6.5 million in the entity in exchange
for an approximate 13% ownership interest . Through December
31, 2000, the Company funded $2.2 million of its investment
commitment and recognized losses of approximately $1 million
representing the Company’s equity interest in the losses.
The Company anticipates fulfilling the investment commitment
during 2001.
There are various lawsuits and claims pending against the Company
involving contract, product liability and other issues. In addition,
the Company has assumed certain insurance liabilities, including
liabilities related to an inactive insurance subsidiary, primarily
related to certain historical businesses of its former parent,
including those related to workers' compensation, employers'
liability, automobile, general and product liability. 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 or results
of operations.
The Company is currently involved in various stages of investigation
and remediation related to environmental protection matters.
The potential costs related to environmental matters and the
possible impact on future operations are difficult to predict
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, such
costs could be material. Accruals for environmental liabilities
are recorded, 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. Estimates are established based upon reports prepared
by environmental specialists, management's knowledge to date
and its experience with the foregoing environmental matters,
and include potential costs for investigation, remediation,
operation and maintenance of cleanup sites and related capital
expenditures. Accrued liabilities for environmental matters
were $31.0 million and $32.5 million at December 31, 2000 and
1999, respectively. Although these amounts do not include third-party
recoveries, certain sites may be subject to indemnification.
Management believes this accrual is adequate for the environmental
liabilities expected to be incurred, and, as a result, believes
that the ultimate liability incurred with respect to environmental
matters will not have a material adverse effect on the Company’s
financial position or results of operations. However, future
events, such as changes in existing laws and regulations, changes
in agency direction or enforcement policies or changes in the
conduct of Fisher’s operations, may give rise to additional
remedial or compliance costs which could have a material adverse
effect on the Company’s financial position or results
of operations.
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