Commitments and Contingencies

The following table sets forth our contractual cash obligations for our continuing operations including debt obligations, minimum rentals for the non-cancelable term of all operating leases and obligations under software license and other agreements (in millions):



	Debt		Operating Leases		Software License Agreements		Other		Total
2018	$	83.7	$	23.8	$	34.9	$	18.9	$	161.3
2019	3.6		19.1		33.6		12.1		68.4
2020	183.7		16.4		30.0		3.7		233.8
2021	0.7		14.7		28.9		2.4		46.7
2022	0.8		12.5		7.6		2.1		23.0
Thereafter	350.8		17.5		—		—		368.3
Total	$	623.3	$	104.0	$	135.0	$	39.2	$	901.5

Debt includes the accounts receivable securitization program, 2010 Senior Notes, 2017 Senior Notes, revolving credit facilities and other indebtedness as described in Note 10, “Debt.” We also have letters of credit of $5.3 million and $5.9 million outstanding for December 31, 2017 and 2016, respectively. Letters of credit are provided by our debt facility.

We have future obligations under certain operating leases. The operating leases, which include facilities, data processing and other equipment, have remaining lease terms ranging from 1 to 10 years excluding options to extend the leases for various lengths of time. Certain leases have clauses that call for the annual rents to be increased during the term of the lease. Such lease payments are expensed on a straight-line basis. We also lease certain facilities from unconsolidated real estate affiliates.

The following rental costs were incurred (in millions):



	Year Ended December 31,
	2017		2016		2015
Rent expense	$	28.6	$	22.2	$	23.6
Occupancy expenses included in above amounts that were charged by unconsolidated real estate affiliates	6.0		5.9		6.8

Obligations under software license agreements generally relate to purchase obligations under maintenance agreements that support the software license.

We have entered into agreements with certain officers whereby upon defined circumstances constituting a change in control of the Company, certain benefit entitlements are automatically funded and such officers are entitled to specific cash payments upon termination of employment. Additionally, we have adopted the DST Systems, Inc. Executive Severance Plan which provides certain benefits to participants in the event of a qualifying termination under the plan.

Other contractual commitments

In the normal course of business, to facilitate transactions of services and products and other business assets, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, data and confidentiality obligations, or out of intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. At December 31, 2017, except for certain immaterial items, there were no liabilities for guarantees or indemnifications as it is not possible to determine either the maximum potential amount under these indemnification agreements or the timing of any such payments due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made under these agreements have not had a material impact on our consolidated financial position, results of operations or cash flows.

Legal Proceedings

A putative class action suit was filed against the Company, the Compensation Committee of our Board of Directors, the Advisory Committee of our 401(k) Profit Sharing Plan (the “Plan”) and certain of our present and/or former officers and directors, alleging breach of fiduciary duties and other violations of the Employee Retirement Income Security Act. On September 1, 2017, a complaint was filed purportedly on behalf of the Plan in the Southern District of New York, captioned Ferguson, et al v. Ruane Cunniff & Goldfarb Inc, et al., naming as defendants the Company, the Compensation Committee of our Board of Directors, the Advisory Committee of the Plan and certain of our present and/or former officers and directors. We intend to defend this case vigorously, and, because it is still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations.

In connection with an investigation of the Plan and the activities of its fiduciaries, the U.S. Department of Labor through its Employee Benefits Security Administration issued a letter dated February 23, 2018 stating that, based on facts gathered, it appeared that certain fiduciaries of the Plan may have breached their fiduciary obligations and violated certain provisions of the Employee Retirement Income Security Act in connection with the administration of the Plan. The letter stated that if the fiduciaries fail to take corrective action, the matter may be referred to the Office of the Solicitor of Labor for possible legal action. The letter further stated that if the fiduciaries take proper corrective action based on a settlement agreement with the Department of Labor, it will not bring a lawsuit with regard to these issues, and close its investigation without further action. We have not yet determined what effect this letter will have, if any, on our financial position or results of operations.

On February 20, 2018, a putative class action complaint was filed against DST and the members of our board of directors in the United States District Court for the District of Delaware under the caption Scott v. DST Systems, Inc., et al. The complaint alleges that the preliminary proxy statement issued in connection with the Merger omitted material information in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Specifically, the complaint alleges that the preliminary proxy statement does not disclose the line items used to calculate certain measures that do not comply with Generally Accepted Accounting Principles (“non-GAAP”) or a reconciliation of such non-GAAP measures to our most comparable GAAP measures, and also does not disclose actual projected values of unlevered free cash flow (“UFCF”) or the values of the line items utilized to calculate UFCF, rendering the preliminary proxy statement false and misleading. The complaint seeks an order (1) declaring that the action is properly maintainable as a class action and certifying the plaintiff as class representative and his counsel as class counsel; (2) enjoining us from proceeding with the shareholder vote on the Merger or consummating the Merger, unless and until we issue additional disclosures; (3) awarding damages; (4) awarding costs and disbursements of this action, including reasonable attorneys’ and expert fees and expenses; and (5) granting such other and further relief as the Court may deem just and proper. We believe the lawsuit is without merit and intend to defend vigorously against these allegations, and, because it is still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations.

On February 21, 2018, a putative class action complaint was filed against DST and the members of our board of directors in the United States District Court for the Western District of Missouri under the caption Pratt v. DST Systems, Inc., et al. The complaint alleges that the preliminary proxy statement issued in connection with the Merger omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act. Specifically, the complaint alleges that the preliminary proxy statement does not disclose the line items used to calculate certain non-GAAP measures or a reconciliation of such non-GAAP measures to our most comparable GAAP measures; does not disclose actual projected values of unlevered free cash flow (“UFCF”), the values of the line items utilized to calculate UFCF, the terminal values for DST, or the inputs for the perpetuity growth rates and discount rates; does not disclose the multiples and metrics for the Publicly Traded Companies Analyses; and does not disclose the multiples and metrics for the Selected Precedent Transactions Analyses, rendering the preliminary proxy statement false and misleading. The complaint seeks an order (1) declaring that the action is properly maintainable as a class action and certifying the plaintiff as class representative and his counsel as class counsel; (2) enjoining us from proceeding with the shareholder vote on the Merger or consummating the Merger, unless and until we issue additional disclosures; (3) directing us to disseminate a materially complete and accurate proxy statement; (4) awarding damages; (5) awarding costs and disbursements of this action, including reasonable attorneys’ and expert fees and expenses; (6) declaring that we violated Sections 14(a) and/or 20(a) of the Exchange Act, as well as Rule 14a-9; and (7) granting such other and further relief as the Court may deem just and proper. We believe the lawsuit is without merit and intend to defend vigorously against these allegations, and, because it is still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations.

On February 27, 2018, a complaint was filed against DST and the members of its board of directors in the United States District Court for the District of Delaware under the caption Williams v. DST Systems, Inc., et al., (D. Del.). The complaint alleges that the preliminary proxy statement issued in connection with the Merger omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act. Specifically, the complaint alleges that the preliminary proxy statement does not disclose DST's unlevered free cash flows, the individual metrics that the financial advisor calculated for the Selected Publicly Traded Companies Analysis and Selected Precedent Transactions Analysis, and, with respect to the Discounted Cash Flow Analysis, the inputs and assumptions used in calculating the selection of the discount rates and terminal multiple range. The complaint seeks an order (1) declaring that the "Registration Statement" is materially misleading and contains omissions of fact in violation of Section 14(a); (2) enjoining DST from proceeding with the shareholder vote on the Merger or consummating the Merger, unless and until DST issues additional disclosures; (3) awarding damages; (4) awarding costs, including reasonable attorneys’ and expert fees and expenses; and (5) granting such other and further relief as the Court may deem just and proper. The defendants believe the lawsuit is without merit and intend to defend vigorously against these allegations, and, because it is still in its preliminary stages, we have not yet determined what effect this lawsuit will have, if any, on our financial position or results of operations.

We are involved in various other legal proceedings arising in the normal course of our business. At this time, we do not believe any material losses under these claims to be probable. While the ultimate outcome of these legal proceedings cannot be predicted with certainty, it is the opinion of management, after consultation with legal counsel, that the final outcome in such proceedings, in the aggregate, would not have a material adverse effect on our consolidated financial condition, results of operations and cash flows.