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COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain aircraft, facilities, and equipment used in its operations. The related lease agreements, which include both non-cancelable and month-to-month terms, generally provide for fixed monthly rentals and, for certain real estate leases, renewal options. The Company generally pays all insurance, taxes, and maintenance expenses associated with these aircraft leases and some of these leases contain renewal and purchase options at fair market values. Rental expense incurred under these leases consisted of the following:


	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2014		2013		2012
	(Thousands of dollars)
Aircraft	$	44,908	$	41,803	$	36,240
Other		7,790		7,657		8,081

Total	$	52,698	$	49,460	$	44,321

Included in the above rental expense is $0.5 million in 2014, $0.6 million in 2013, and $0.3 million in 2012 paid to GE Air, Inc. and Gonsoulin Enterprises, Inc. for the lease of aircraft and real estate. Each of GE Air, Inc. and Gonsoulin Enterprises, Inc. is owned by our Chairman, CEO and majority voting shareholder.

The following table presents the remaining aggregate lease commitments under operating leases having initial non-cancelable terms in excess of one year. The table includes renewal periods on the principal operating facility lease.


	Aircraft		Other		Total
	(Thousands of dollars)
2015	$	45,379	$	3,980	$	49,359
2016		42,885		3,163		46,048
2017		40,595		2,352		42,947
2018		36,914		1,759		38,673
2019		30,262		1,198		31,460
Thereafter		106,035		2,149		108,184

	$	302,070	$	14,601	$	316,671

In 2014, we purchased five heavy aircraft off lease pursuant to purchase options in the lease contracts for an aggregate purchase price of $89.3 million using proceeds from the sale of short-term investments. We also purchased two medium aircraft off lease pursuant to purchase options in the lease contracts for an aggregate purchase price of $14.9 million, and purchased one fixed wing aircraft off lease for an aggregate purchase price of $3.5 million. As of December 31, 2014, we had options to purchase aircraft under lease becoming exercisable in 2015 through 2019 for the following aggregate purchase prices: $17.7 million in 2015, $67.8 million in 2016, $55.7 million in 2017, $127.0 million in 2018, and $150.4 million in 2019. Subject to market conditions, we intend to exercise these options as they become exercisable.

On January 2, 2015, we purchased one heavy aircraft off lease pursuant to purchase options in the lease contract for an aggregate purchase price of $17.7 million.

Guarantees

In the normal course of business with customers, vendors, and others, we provide guarantees, performance, and payment bonds pursuant to certain agreements. The aggregate amount of these guarantees and bonds at December 31, 2014 was $1.1 million and are scheduled to expire between March 2015 and November 2015.

Purchase Commitments

In 2013, we executed a contract to purchase six new heavy aircraft for our Oil and Gas segment. We took delivery of these aircraft throughout 2014. In 2014, we exercised an option to purchase six additional heavy aircraft for delivery in 2015 and 2016.

Total aircraft deposits of $8.3 million were included in Other Assets as of December 31, 2014. This amount represents deposits for aircraft purchase contracts.

Environmental Matters

We have recorded an aggregate estimated probable liability of $0.2 million as of December 31, 2014 for environmental response costs. We have conducted environmental surveys of our former Lafayette facility located at the Lafayette Regional Airport, which we vacated in 2001, and have determined that limited soil and groundwater contamination exists at two parcels of land at the former facility. We submitted an assessment report for both sites in 2003, updated it in 2006, and received approvals of our remediation plan from the Louisiana Department of Environmental Quality (“LDEQ”) and Louisiana Department of Natural Resources in 2010 and 2011, respectively. Since such time, we have installed groundwater monitoring wells at these sites and furnished periodic reports on contamination levels to the LDEQ. Pursuant to our agreement with the LDEQ, we are currently providing samples twice a year for both sites and plan to remove underground storage tanks under one of the sites later this year. Based upon our working relationships and agreements with the LDEQ and the results of our ongoing site monitoring, we believe, based on current circumstances, that our ultimate remediation costs for these sites will not be material to our consolidated financial position, results of operations, or cash flows.

Legal Matters

The Company is named as a defendant in various legal actions that have arisen in the ordinary course of business and have not been finally adjudicated. In the opinion of management, the amount of the liability with respect to these actions will not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.