7.	LEASES:

Capital Leases

The Company leases certain equipment used in the manufacturing process. The future minimum payments under the Company's capital leases are as follows (in thousands):


2012	$	4,454
2013		4,095
2014		4,019
2015		2,663
Thereafter		3,413

Total minimum lease payments		18,644
Amount representing interest		(2,939	)

Present value of minimum lease payments with average interest rates of 7.80%		15,705
Current portion of capital lease obligation		(3,358	)

Capital lease obligation, less current portion	$	12,347

We had a total of $15.7 million in capital lease obligations outstanding at December 31, 2011. The weighted average interest rate on all of our capital leases is 7.80%. Our capital leases are for certain equipment used in the manufacturing process. Of the total capital lease balance, $7.7 million of our capital leases outstanding as of December 31, 2011 consists of a Financing Arrangement entered into as of September 2009 to finance our Bossier City, Louisiana facility under which certain equipment used in the manufacturing process at the facility is leased. As part of the Financing Arrangement, a $10 million escrow account was provided for the Company by a local government entity through a financial institution and funds are released upon qualifying purchase requisitions. As we purchase equipment for the facility, we enter into a sale-leaseback transaction with the governmental entity as part of the Financing Arrangement. As of December 31, 2011, $0.9 million was held in the escrow account, which is included in Other Assets, as a result of proceeds from the Financing Arrangement. The Financing Arrangement requires us to meet certain loan covenants, measured at the end of each fiscal quarter. These loan covenants follow the covenants required by our Credit Agreement. The company was not in compliance with its financial covenants as of December 31, 2011 and was granted waivers by the lessors. See Note 17, "Subsequent Events", for additional information on the waivers.

Operating Leases

The Company has entered into various equipment leases with terms of ten years or less. Total rental expense for 2011, 2010, and 2009 was $3.3 million, $3.2 million, and $2.0 million, respectively. Certain of the Company's operating lease agreements include renewals and/or purchase options set to expire at various dates. Future minimum payments as of December 31, 2011 for operating leases with initial or remaining terms in excess of one year are (in thousands):


2012	$	2,070
2013		1,498
2014		1,099
2015		827
Thereafter		1,272

	$	6,766