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Commitments and Contingencies | 12 Months Ended
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Sep. 30, 2016
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies | G. Commitments and Contingencies Long-Term Debt See Note F herein for a discussion of our long-term debt. Leases We lease certain offices, facilities and equipment under operating leases expiring at various dates through 2023. At September 30, 2016, the minimum annual rental commitments under leases having terms in excess of one year were as follows (in thousands):
Years Ending September 30, |  | Operating Leases |
2017 | $ | 2,495 |
2018 |  | 1,491 |
2019 |  | 1,167 |
2020 |  | 1,470 |
2021 |  | 1,370 |
Thereafter |  | 2,485 |
Total lease commitments | $ | 10,478 |
Lease expense for all operating leases was $3.5 million, $4.0 million and $3.9 million for Fiscal 2016, 2015 and 2014, respectively. In Fiscal 2015, we exited one of our previously occupied leased facilities in Acheson, Alberta, Canada. The lease does not expire until October 2019; however, we have sublet that facility through the remaining term of the lease. In Fiscal 2014, we also exited one of our previously occupied leased facilities in Edmonton, Alberta, Canada. This lease does not expire until July 2023; however, we have sublet that facility through July 2019. Letters of Credit and Bonds Certain customers require us to post bank letter of credit guarantees or surety bonds. These guarantees and surety bonds assure that we will perform under the terms of our contract. In the event of default, the counterparty may demand payment from the bank under a letter of credit or performance by the surety under a bond. To date, there have been no significant expenses related to either letters of credit or surety bonds for the periods reported. We were contingently liable for secured and unsecured letters of credit of $26.8 million as of September 30, 2016. We also had performance and maintenance bonds totaling $233.6 million that were outstanding, with additional bonding capacity of $516.4 million available, at September 30, 2016. We have a $9.1 million facility agreement (Facility Agreement) between Powell (UK) Limited and a large international bank. This Facility Agreement provides Powell (UK) Limited the ability to enter into bank guarantees as well as forward exchange contracts and currency options. At September 30, 2016, we had outstanding guarantees totaling $4.1 million under this Facility Agreement and amounts available under this Facility Agreement were $5.0 million. This facility expired in November 2016. The Facility Agreement provides for financial covenants and customary events of default, and carries cross-default provisions with our U.S. Revolver. If an event of default (as defined in the Facility Agreement) occurs and is continuing, per the terms and subject to the conditions set forth therein, obligations outstanding under the Facility Agreement may be accelerated and may become or be declared immediately due and payable. As of September 30, 2016, we were in compliance with all of the financial covenants of the Facility Agreement. Litigation We are involved in various legal proceedings, claims and other disputes arising from our commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. Although we can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity. Liquidated Damages Certain of our customer contracts have schedule and performance obligation clauses that, if we fail to meet them, could require us to pay liquidated damages. Each individual contract defines the conditions under which the customer may make a claim against us. As of September 30, 2016, our exposure to possible liquidated damages is $2.5 million, of which approximately $1.5 million is probable. Based on our actual or projected failure to meet these various contractual commitments, $1.5 million has been recorded as a reduction to revenue. We will attempt to obtain change orders, contract extensions or accelerate project completion which may resolve the potential for any unaccrued liquidated damage. Should we fail to achieve relief on some or all of these contractual obligations, we could be required to pay additional liquidated damages, which could negatively impact our future operating results.

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