Note 17. Commitments and Contingencies

Litigation: We are a party to legal proceedings and claims which arise during the ordinary course of business. We review our legal proceedings and claims, regulatory reviews and inspections, and other legal matters on an ongoing basis and follow appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies when the incurrence of a loss is probable and can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. We do not record an accrual when the likelihood of loss being incurred is probable, but the amount cannot be reasonably estimated, or when the loss is believed to be only reasonably possible or remote, although disclosures will be made for material matters as required by ASC 450-20, Loss Contingencies. Our assessment of whether a loss is reasonably possible or probable is based on our assessment and consultation with legal counsel regarding the ultimate outcome of the matter following all appeals.

As of May 2, 2015 and April 26, 2014, we did not believe there was a reasonable possibility that any material loss for these various claims or legal actions, including reviews, inspections or other legal proceedings, if any, would be incurred. Accordingly, no accrual or disclosure of a potential range of loss has been made related to these matters. In the opinion of management, the ultimate liability of all unresolved legal proceedings is not expected to have a material effect on our financial position, liquidity or capital resources.

Guarantees: In connection with the sale of equipment to various customers, we have entered into contractual arrangements whereby we agreed to repurchase equipment at the end of the lease term at a fixed price. Our total obligations under these fixed price arrangements were $1,100 and $1,100 as of May 2, 2015 and April 26, 2014, respectively. In accordance with the provisions of ASC 460, Guarantees, there was no guarantee liability in accrued expenses that needed to be recognized in connection with these arrangements.

Warranties: We offer a standard parts coverage warranty for periods varying from one to five years for most of our products. We also offer additional types of warranties to include on-site labor, routine maintenance and event support. In addition, the terms of warranties on some installations can vary from one to 10 years. The specific terms and conditions of these warranties vary primarily depending on the type of the product sold. We estimate the costs which may be incurred under the warranty obligations and record a liability in the amount of such estimated costs at the time the revenue is recognized. Factors affecting our estimate of the cost of our warranty obligations include historical experience and expectations of future conditions. We continually assess the adequacy of our recorded warranty reserves and, to the extent we experience any changes in warranty claim activity or costs associated with servicing those claims, our warranty obligation is adjusted accordingly.

Changes in our warranty liability for the fiscal years ended May 2, 2015 and April 26, 2014 consisted of the following:



	May 2, 2015			April 26, 2014
Beginning accrued warranty costs	$	27,250		$	25,146
Warranties issued during the period	14,113			13,008
Settlements made during the period	(13,829		)	(13,796		)
Changes in accrued warranty costs for pre-existing warranties during the period, including expirations	(1,053		)	2,892
Ending accrued warranty costs	$	26,481		$	27,250

Performance guarantees: We have entered into standby letters of credit and surety bonds with financial institutions relating to the guarantee of our future performance on contracts, primarily construction type contracts. As of May 2, 2015, we had outstanding letters of credit and surety bonds in the amount of $13,615 and $42,720, respectively. Performance guarantees are issued to certain customers to guarantee the operation and installation of the equipment and our ability to complete a contract. These performance guarantees have various terms, which are generally one year.

Leases: We lease vehicles, office space and various equipment for various sales and service locations throughout the world, including manufacturing space in the United States and China. Some of these leases, including the lease for manufacturing facilities in Sioux Falls, South Dakota, include provisions for extensions or purchase. The lease for the facilities in Sioux Falls, South Dakota can be extended for an additional three years past its current term, which ends December 31, 2016, and it contains an option to purchase the property subject to the lease from January 1, 2015 to December 31, 2016 for $8,400, which approximates fair value. If the lease is extended, the purchase option increases to $8,600 for the year ending December 31, 2017 and $8,800 for the year ending December 31, 2018. Rental expense for operating leases was $2,714, $2,742 and $2,749 for the fiscal years ended May 2, 2015, April 26, 2014 and April 27, 2013, respectively.

Future minimum payments under noncancelable operating leases, excluding executory costs such as management and maintenance fees, with initial or remaining terms of one year or more consisted of the following at May 2, 2015:



Fiscal years ending	Amount
2016	$	2,490
2017	1,324
2018	325
2019	68
2020	38
Thereafter	—
	$	4,245

Purchase commitments: From time to time, we commit to purchase inventory, advertising, information technology maintenance and support services, and various other products and services over periods that extend beyond one year. As of May 2, 2015, we were obligated under the following conditional and unconditional purchase commitments, which included $700 in conditional purchase commitments:



Fiscal years ending	Amount
2016	$	1,973
2017	1,090
2018	295
2019	100
2020	—
Thereafter	—
	$	3,458

Other long-term obligations: We are obligated to pay the following payments for an acquisition and for other various obligations.



	May 2, 2015		April 26, 2014
Advertising	$	700	$	620
Deferred purchase price	1,476		2,375
Total Outstanding	2,176		2,995
Less: current liability	555		728
Other long-term obligations	$	1,621	$	2,267