Note 15:

Product Warranties, Operating Leases, and Other Commitments

Product warranties: Most of the Company’s products are covered under a warranty period ranging from one to five years. The Company records a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. In addition, the Company adjusts its warranty accruals if it becomes probable that expected claims will differ from initial estimates.

Changes in accrued warranty costs were as follows:

	Years ended March 31,
	2016			2015
Beginning balance	$	10.4		$	14.0
Warranties recorded at time of sale		5.7			5.8
Adjustments to pre-existing warranties		(1.1	)		1.5
Settlements		(6.7	)		(9.2	)
Effect of exchange rate changes		-			(1.7	)
Ending balance	$	8.3		$	10.4

Operating leases: The Company leases various facilities and equipment under operating leases. Rental expense for these leases totaled $11.9 million in fiscal 2016, and $11.5 million in both fiscal 2015 and 2014.

Future minimum rental commitments at March 31, 2016 under non-cancelable operating leases were as follows:

Fiscal Year
2017	$	8.1
2018		5.6
2019		4.8
2020		4.6
2021		4.1
2022 and beyond		26.3
Total	$	53.5

Indemnification agreements: From time to time, the Company provides indemnification agreements related to the sale or purchase of an entity or facility. These indemnification agreements cover customary representations and warranties typically provided in conjunction with such transactions, including income, sales, excise or other tax matters, environmental matters and other third-party claims. The indemnification periods provided generally range from less than one year to fifteen years. In addition, standard indemnification provisions reside in many commercial agreements to which the Company is a party and relate to responsibility in the event of potential third-party claims. The fair value of the Company’s outstanding indemnification obligations at March 31, 2016 is not material.

Commitments: At March 31, 2016, the Company had capital expenditure commitments of $20.5 million. Significant commitments include tooling and equipment expenditures for new and renewal programs with customers in the Americas and Europe segments. The Company utilizes inventory arrangements with certain vendors in the normal course of business under which the vendors maintain inventory stock at the Company’s facilities or at outside facilities. Title passes to the Company at the time goods are withdrawn for use in production. The Company has agreements with the vendors to use the material within a specific period of time. In some cases, the Company bears the risk of loss for the inventory because Modine is required to insure the inventory against damage and/or theft. This inventory is included within the Company’s consolidated balance sheets as raw materials inventory.