Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies

10. Commitments and Contingencies

Legal Proceedings. We received notice from the tax authorities in Brazil assessing R$5.9 million, or $2.7 million (converted at the June 30, 2014 exchange rate), in connection with tax credits that were generated from the purchase of certain goods which were subsequently applied by us against taxes owed. We have appealed the assertion by the tax authorities in Brazil that the goods purchased were not eligible to earn the credits. While the outcome of this proceeding cannot be predicted with certainty, we do not expect this matter to have a material adverse effect upon our financial position, results of operations or cash flows.

We and certain of our subsidiaries, from time to time, are parties to various other legal proceedings, claims and disputes that have arisen in the ordinary course of business. These claims may involve significant amounts, some of which would not be covered by insurance. A substantial settlement payment or judgment in excess of our accruals could have a material adverse effect on our financial position, results of operations or cash flows. While the outcome of these proceedings cannot be predicted with certainty, our management does not expect any of these existing matters, individually or in the aggregate, to have a material adverse effect upon our financial position, results of operations or cash flows.

Asset Retirement Obligations.

The changes in the aggregate carrying amount of our ARO liability are as follows:

	Six months ended June 30,
	2014			2013
	(In thousands)
Beginning balance	$	10,497		$	9,837
Accretion expense		271			251
Obligations settled		(46	)		—
Foreign currency translation, net		(23	)		(63	)
Ending Balance	$	10,699		$	10,025

Production downtime. In the first quarter of 2014 we experienced weather-related downtime at our Belpre, Ohio facility. In addition, our facility in Berre, France experienced an operating disruption resulting from a small fire that impacted one of the production lines at this facility. We incurred $13.0 million of costs in the six months ended June 30, 2014 associated with these two events, of which $2.4 million is included in other payables and accruals at June 30, 2014 based on management’s estimates of the remaining costs to be incurred. No costs were incurred in the three months ended June 30, 2014.

There have been no other material changes to our Commitments and Contingencies disclosed in our most recently filed Annual Report on Form 10-K.