11. Guarantees, Commitments and Contingencies

Litigation

At October 1, 2016, the Company had a number of product liability and other cases pending. Management believes that, considering the Company’s insurance coverage and its intention to vigorously defend its positions, the ultimate resolution of these matters will not have a material adverse impact on the Company’s financial statements.

Environmental

The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous materials used in its manufacturing processes. Failure by the Company to comply with present and future regulations could subject it to future liabilities. In addition, such regulations could require the Company to acquire costly equipment or to incur other significant expenses to comply with environmental regulations. The Company is currently not involved in any material environmental proceedings and therefore management believes that the resolution of environmental matters will not have a material adverse effect on the Company’s financial statements.

Our environmental liability using a discount rate of 12%, included in current accrued expenses and other long-term liabilities on the Consolidated Balance Sheets, was $0.6 million and $0.5 million at October 1, 2016 and October 3, 2015, respectively. The estimated aggregate undiscounted amount that will be incurred over the next 11 years is $1.1 million. The estimated payments for each of the next five years are $0.1 million per year and the aggregate amount thereafter is $0.6 million. Future expenditures may exceed the amounts accrued and estimated.

Lease Commitments

The Company leases certain buildings, machinery and equipment under operating leases expiring at various dates. Total rent expense was $1.2 million, $1.5 million and $1.7 million for the fiscal years ended 2016, 2015 and 2014, respectively.

The following table sets forth future minimum lease payments under non-cancelable operating leases with original terms exceeding one year at October 1, 2016:



(in thousands of dollars)
Years Ended	Amount
2017	$	1,222
2018	552
2019	266
2020	8
Total operating lease commitments	$	2,048

The Company leases from third party vendors various office and plant equipment, including computers, copy machines, and sweepers, which qualify for capital lease treatment under the provisions of ASC 840. On the Consolidated Balance Sheets, amounts due under capital lease obligations are included in other liabilities, current and long-term, with the interest in the related assets recorded in property, plant and equipment, net. Depreciation of assets recorded under capital lease obligations is included in cost of goods sold or selling, general and administrative expenses, depending upon use of leased property, on the Consolidated Statements of Operations and Comprehensive Income (Loss). These leases have remaining lease terms ranging from 1 month to 6.3 years.

Leased property under capital leases at the dates indicated is presented in the following table:



(in thousands of dollars)	October 1, 2016			October 3, 2015
Leased property under capital leases	$	1,071		$	974
Accumulated amortization	(554		)	(328		)
Leased property under capital leases, net	$	517		$	646

The following table summarizes the Company’s future minimum lease payments under capital leases at October 1, 2016:



(in thousands of dollars)
Years Ended	Amount
2017	$	184
2018	178
2019	175
2020	18
2021	18
Thereafter	25
Total minimum lease payments	598
Amount of lease payments representing interest	(66		)
Present value of future minimum capital lease payments	$	532
Current obligations under capital leases	$	154
Long-term obligations under capital leases	378

Purchase Commitments

During the fiscal years ended 2016 and 2015, the Company entered into short-term and long-term pricing agreements with many of its major suppliers for the purchase of raw materials and parts such as steel, engines, axles and transmissions. As the quantities to be purchased by the Company vary subject to market demand of vehicles manufactured by the Company, under these agreements there are no minimum purchase commitments with the exception of propane fuel systems, engines, and tonnages of certain steel products that are repetitively consumed. At October 1, 2016, commitments for future production material totaled approximately $8.4 million. The amount of these commitments for the next five fiscal years is expected to be as follows:



(in thousands of dollars)
Years Ended	Amount
2017	$	6,230
2018	2,172
Total purchase commitments	$	8,402