Common use of COMMITMENTS AND CONTINGENCIES Clause in Contracts

COMMITMENTS AND CONTINGENCIES. The Company leases certain facilities and equipment under agreements which are accounted for as operating leases that expire at various dates through 2011. The Company also leases certain aviation equipment which are accounted for as operating leases. The terms of these arrangements are one to five years with options to renew annually at the election of the Company. If the Company elects to not renew the lease, the Company is required to purchase the aviation equipment at its stipulated lease value. The Company may also sublease the aviation equipment to a customer on a short- or long-term basis. Future minimum payments under leases with initial or remaining terms of one year or more at May 31, 2000 are as follows: YEAR FACILITIES AND EQUIPMENT AVIATION EQUIPMENT - 2001..................................................... $5,682 $2,787 2002..................................................... 4,343 2,787 2003..................................................... 3,621 2,787 2004..................................................... 3,243 2,787 2005 and thereafter...................................... 3,639 20,117 Rental expense during the past three fiscal years was as follows: 2000 1999 1998 Facilities and Equipment $9,663 $8,339 $6,991 Aviation Equipment 8,344 4,242 422 The Company routinely issues letters of credit, performance bonds or credit guarantees in the ordinary course of its business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2000 was approximately $51,500. The Company is involved in various claims and legal actions, including environmental matters, arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's consolidated financial condition or results of operations. AAR CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)

COMMITMENTS AND CONTINGENCIES. Leases The Company leases certain facilities and equipment under agreements which are accounted for as operating leases that expire at various dates through 2011. The Company also leases certain aviation equipment which are accounted for as noncancellable operating leases. The terms of these arrangements are one Leases and rental costs charged to five expense for the years with options to renew annually at the election of the Company. If the Company elects to not renew the lease, the Company is required to purchase the aviation equipment at its stipulated lease value. The Company may also sublease the aviation equipment to a customer on a short- or long-term basis. Future minimum payments under leases with initial or remaining terms of one year or more at May ended December 31, 2000 and 1999, and for the period from December 24, 1998, through December 31, 1998, were $14.2 million, $11.2 million and $70, respectively. As of December 31, 2000, future minimum lease payments are as follows: YEAR FACILITIES AND EQUIPMENT AVIATION EQUIPMENT - AMOUNT ---- ------- 2001..................................................... ............................................... $5,682 $2,787 11,077 2002..................................................... 4,343 2,787 ............................................... 7,557 2003..................................................... 3,621 2,787 ............................................... 5,242 2004..................................................... 3,243 2,787 2005 and thereafter...................................... 3,639 20,117 Rental expense during the past three fiscal years was as follows: 2000 1999 1998 Facilities and Equipment $9,663 $8,339 $6,991 Aviation Equipment 8,344 4,242 422 ............................................... 4,101 2005............................................... 3,173 Thereafter......................................... 10,364 The Company routinely issues letters of creditalso rents utility poles in its operations. Generally, performance bonds or credit guarantees pole rentals are cancelable on short notice, but the Company anticipates that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2000 and 1999, and for the period from December 24, 1998, through December 31, 1998, was $31.6 million, $14.3 million and $137, respectively. Litigation The Company is a party to lawsuits and claims that arose in the ordinary course of conducting its business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2000 was approximately $51,500. The Company is involved in various claims and legal actions, including environmental matters, arising in the ordinary course of business. In the opinion of management, after consulting with legal counsel, and taking into account recorded liabilities, the ultimate disposition outcome of these matters lawsuits and claims will not have a material adverse effect on the Company's consolidated financial condition position or results of operations. AAR CORP95 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Redeemable Securities In connection with the acquisitions of Rifkin, Falcon, and Bresnan, sellers who acquired Charter Holdco membership units or, in the case of Bresnan, additional equity interests in a subsidiary of Charter Holdings, and the Helicon sellers who acquired shares of Class A common stock in Charter's initial public offering may have rescission rights against Charter and Charter Holdco arising out of possible violations of Section 5 of the Securities Act of 1933, as amended, in connection with the offers and sales of these equity interests. Accordingly, the maximum potential cash obligation related to the rescission rights, estimated at $1.1 billion as of December 31, 2000 (IN THOUSANDSsee Note 21), EXCEPT PER SHARE has been excluded from shareholders' equity or minority interest and classified as "redeemable securities" on the consolidated balance sheet. One year after the dates of issuance of these equity interests (when these possible rescission rights will have expired), the Company will reclassify the respective amounts to shareholders' equity or minority interest, as applicable. Certain of these rescission rights expired during the year ended December 31, 2000, and were reclassified to minority interest and equity, as applicable. Regulation in the Cable Industry The cable television industry is subject to extensive regulation at the federal, local and, in some instances, state levels. The Cable Communications Policy Act of 1984 (the "1984 Cable Act"), the Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act" and together with the 1984 Cable Act, the "Cable Acts"), and the Telecommunications Act of 1996 (the "1996 Telecom Act"), establish a national policy to guide the development and regulation of cable television systems. The Federal Communications Commission (FCC) has principal responsibility for implementing the policies of the Cable Acts. Many aspects of such regulation are currently the subject of judicial proceedings and administrative or legislative proposals. Legislation and regulations continue to change, and the Company cannot predict the impact of future developments on the cable television industry. The 1992 Cable Act and the FCC's rules implementing that act generally have increased the administrative and operational expenses of cable television systems and have resulted in additional regulatory oversight by the FCC and local or state franchise authorities. The Cable Acts and the corresponding FCC regulations have established rate regulations. The 1992 Cable Act permits certified local franchising authorities to order refunds of basic service tier rates paid in the previous twelve-month period determined to be in excess of the maximum permitted rates. During 2000 and 1999, the amounts refunded by the Company have been insignificant. The Company may be required to refund additional amounts in the future. The Company believes that it has complied in all material respects with the provisions of the 1992 Cable Act, including the rate setting provisions promulgated by the FCC. However, in jurisdictions that have chosen not to certify, refunds covering the previous twelve-month period may be ordered upon certification if the Company is unable to justify its basic rates. As of December 31, 2000, approximately 17% of the Company's local franchising authorities are certified to regulate basic tier rates. The Company is unable to estimate at this time the amount of refunds, if any, that may be payable by the Company in the event certain of its rates are successfully challenged by franchising authorities or found to be unreasonable by the FCC. The Company does not believe that the amount of any such refunds would have a material adverse effect on the consolidated financial position or results of operations of the Company. The 1996 Telecom Act, among other things, immediately deregulated the rates for certain small cable operators and in certain limited circumstances rates on the basic service tier, and as of March 31, 1999, deregulated rates on the cable programming service tier (CPST). The FCC has taken the position that it will still adjudicate pending CPST complaints but will strictly limit its review, and possible refund orders, to the time period predating the sunset date, March 31, 1999. The Company does not believe any adjudications 96 CHARTER COMMUNICATIONS, INC. AND PERCENTAGE DATA)SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) regarding their pre-sunset complaints will have a material adverse effect on the Company's consolidated financial position or results of operations. A number of states subject cable television systems to the jurisdiction of centralized state governmental agencies, some of which impose regulation of a character similar to that of a public utility. State governmental agencies are required to follow FCC rules when prescribing rate regulation, and thus, state regulation of cable television rates is not allowed to be more restrictive than the federal or local regulation.

COMMITMENTS AND CONTINGENCIES. The Company leases certain facilities a portion of its equipment, office space, computer equipment, automobiles and equipment trucks under agreements leases which are accounted for as operating leases that expire at various dates dates. Minimum future operating lease obligations in effect at December 31, 2000, are as follows (in thousands): OPERATING LEASES --------- 2001...................................................... $ 2,439 2002...................................................... 1,701 2003...................................................... 932 2004...................................................... 766 2005...................................................... 710 Thereafter................................................ 3,724 ------- Total........................................... $10,272 ======= Rental expense under operating leases was $3.0 million, $3.0 million and $2.6 million for the years ended December 31, 2000, 1999 and 1998, respectively. LTV Corporation, the former owner of OSI, under the terms of the stock purchase agreement, has indemnified OSI of all claims and contingencies, threatened or pending, relating to business activities prior to August 1, 1995. Specifically, claims involving environmental remediation, product warranty, legal actions, workers' compensation issues and various federal, state and sales tax matters related to pre-August 1995 business transactions are the financial responsibility of LTV. The financial responsibilities are initially satisfied through 2011the reserves assumed as part of the acquisition. To the extent that claims exceed $2.2 million, the original allowance, all amounts will be paid by LTV. 92 OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) OSI has warranted items related to the sale of CE Drilling and CE Distribution (see Note 15), subject to threshold amounts defined in the respective agreements. The Company also leases certain aviation equipment which are accounted believes all amounts have been properly reflected in the accompanying consolidated financial statements. As of December 31, 2000, OSI had entered into forward purchase contracts through March 30, 2001 with a bank totaling $3.2 million for the purchase of foreign currency as operating leasesa hedge to existing receivable balances. The terms of these arrangements are one to five years with options to renew annually at contract purchase rates were not significantly different from the election of the Company. If the Company elects to not renew the lease, the Company is required to purchase the aviation equipment at its stipulated lease value. The Company may also sublease the aviation equipment to a customer on a short- or long-term basis. Future minimum payments under leases with initial or remaining terms of one year or more at May December 31, 2000 are as follows: YEAR FACILITIES AND EQUIPMENT AVIATION EQUIPMENT - 2001..................................................... $5,682 $2,787 2002..................................................... 4,343 2,787 2003..................................................... 3,621 2,787 2004..................................................... 3,243 2,787 2005 and thereafter...................................... 3,639 20,117 Rental expense during the past three fiscal years was as follows: 2000 1999 1998 Facilities and Equipment $9,663 $8,339 $6,991 Aviation Equipment 8,344 4,242 422 The Company routinely issues letters of credit, performance bonds or credit guarantees in the ordinary course of its business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2000 was approximately $51,500currency exchange rates. The Company is involved in various claims claims, lawsuits and legal actions, including environmental other proceedings relating to a wide variety of matters. While uncertainties are inherent in the final outcome of such matters, arising in and it is presently impossible to determine the ordinary course actual costs that ultimately may be incurred, management believes that the resolution of business. In such uncertainties and the opinion incurrence of management, the ultimate disposition of these matters such costs will not have a material adverse effect on the Company's consolidated financial condition or position, results of operations. AAR CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)operations or liquidity.

COMMITMENTS AND CONTINGENCIES. Operating lease payments are charged to expense as incurred. Such rental expenses included in the consolidated statements of operations were $15.7 million, $13.7 million and $28.9 million for 2000, 1999 and 1998, respectively. The following is a summary of future minimum lease payments for all capital and operating leases as of December 31, 2000. Capital Leases Operating Leases Total In Thousands 2001 .......................................................... $3,325 $16,481 $19,806 2002 .......................................................... 1,290 11,859 13,149 2003 .......................................................... 671 9,954 10,625 2004 .......................................................... 208 8,997 9,205 2005 .......................................................... 8,549 8,549 Thereafter .................................................... 35,749 35,749 Total minimum lease payments .................................. $5,494 $91,589 $97,083 Less: Amounts representing interest ........................... 395 Present value of minimum lease payments ....................... 5,099 Less: Current portion of obligations under capital leases ..... 3,325 Long-term portion of obligations under capital leases ......... $1,774 The Company leases certain facilities and equipment under agreements is a member of South Atlantic Canners, Inc. ("SAC"), a manufacturing cooperative, from which it is obligated to purchase a specified number of cases of finished product on an annual basis. The minimal annual purchases are accounted approximately $40 million. The Company guarantees a portion of the debt for as operating leases that expire at various dates through 2011one cooperative from which the Company purchases plastic bottles. The Company also leases certain aviation equipment which are accounted guarantees a portion of debt for as operating leasesSAC. See Note 15 to the consolidated financial statements for additional information concerning these financial guarantees. The terms total of these arrangements are one to five years with options to renew annually at the election of the Company. If the Company elects to not renew the leaseall debt guarantees on December 31, the Company is required to purchase the aviation equipment at its stipulated lease value2000 was $35.7 million. The Company may also sublease has entered into a purchase agreement for aluminum cans on an annual basis through 2003. The estimated annual purchases under this agreement are approximately $100 million for 2001, 2002 and 2003. On August 3, 1999, North American Container, Inc. ("NAC") filed a Complaint For Patent Infringement and Jury Demand (the aviation equipment "Complaint") against the Company and a number of other defendants in the United States District Court for the Northern District of Texas, Dallas Division, alleging that certain unspecified blow-molded plastic containers used, made, sold, offered for sale and/or used by the Company and other defendants infringe certain patents owned by the plaintiff. NAC seeks an unspecified amount of compensatory damages for prior infringement, seeks to a customer on a short- or longhave those damages trebled, seeks pre-term basisjudgment and post-judgment interest, seeks attorneys fees and seeks an injunction prohibiting future infringement and ordering the destruction of all infringing containers and machinery used in connection with the manufacture of the infringing products. Future minimum payments under leases with initial or remaining terms of one year or more at May 31, 2000 are as follows: YEAR FACILITIES AND EQUIPMENT AVIATION EQUIPMENT - 2001..................................................... $5,682 $2,787 2002..................................................... 4,343 2,787 2003..................................................... 3,621 2,787 2004..................................................... 3,243 2,787 2005 The original Complaint names forty-two other defendants and thereafter...................................... 3,639 20,117 Rental expense during the past three fiscal years was as follows: 2000 1999 1998 Facilities and Equipment $9,663 $8,339 $6,991 Aviation Equipment 8,344 4,242 422 additional defendants have been added by amendment. The Company routinely issues letters has obtained partial indemnification from its suppliers for all damages it may incur in connection with this proceeding. The Company has filed an answer to the Complaint, as amended, and has denied the material allegations of credit, performance bonds or credit guarantees NAC and seeks recovery of attorney fees by having the case declared exceptional. The Company has also filed a counterclaim seeking a declaration of invalidity and non-infringement. A claims construction hearing was held in December 2000. The Court-appointed Special Master has advised the Company to expect a ruling in April 2001. COCA-COLA BOTTLING CO. CONSOLIDATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company is involved in other various claims and legal proceedings which have arisen in the ordinary course of its business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2000 was approximately $51,500. The Company is involved in various claims and legal actions, including environmental matters, arising in the ordinary course of business. In the opinion of management, believes that the ultimate disposition of these matters the above noted litigation and its other claims and legal proceedings will not have a material adverse effect on the Company's consolidated financial condition condition, cash flows or results of operations. AAR CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)operations of the Company.