12.  OTHER COMMITMENTS AND CONTINGENCIES

 

Litigation.  We are subject to claims, charges, litigation, and other proceedings in the ordinary course of our business, including those arising from or related to contractual matters, intellectual property, personal injury, environmental matters, product liability, product recalls, construction defects, insurance coverage, personnel and employment disputes, antitrust, and other matters, including class actions.  We believe we have adequate defenses in these matters and that the likelihood the outcome of these matters would have a material adverse effect on us is remote.  However, there is no assurance that we will prevail in these matters, and we could in the future incur judgments, enter into settlements of claims, or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations.

 

Other Matters.  We enter into contracts, which include customary indemnifications that are standard for the industries in which we operate. Such indemnifications include customer claims against builders for issues relating to our products and workmanship. In conjunction with divestitures and other transactions, we occasionally provide customary indemnifications relating to various items including: the enforceability of trademarks; legal and environmental issues; and asset valuations. We evaluate the probability that amounts may be incurred and appropriately record an estimated liability when deemed probable.

We occasionally use performance bonds to ensure completion of our work on certain larger customer contracts that can span multiple accounting periods. As of December 31, 2015 and 2014, we had performance bonds outstanding, totaling $19.5 million and $14.1 million, respectively. Performance bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed. In addition, at December 31, 2015 and 2014, respectively, we had $10.0 million and $5.4 million of other types of bonds outstanding, principally license and insurance related.

We lease company vehicles and warehouse facilities, some under non-cancellable operating leases.  We lease certain operating facilities from certain related parties, primarily former owners (and in certain cases, current management personnel) of companies acquired.  Such leases approximate market value and are comprised of less than 40 of our leases.  Rental expense is recorded in our Consolidated Statements of Operations and includes expense to such related parties.  Our rental expense was as follows, in thousands:

 

 

 

Future minimum lease payments at December 31, 2015 were as follows, in thousands:

 

 

A corporate leased asset used by Masco was terminated and an accrual was established in 2014 for the difference between estimated proceeds and the contractual value.  The corporate leased asset was disposed of on April 1, 2015, for the expected proceeds, and we received reimbursement from Masco.