8.	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):


2014	$	2,697
2015		2,697
2016		2,145
2017		1,315
2018		—
Thereafter		—

Total minimum lease payments		8,854
Amount representing interest		(958	)

Present value of minimum lease payments with average interest rates of 7.04%		7,895
Current portion of capital lease obligation		2,216

Capital lease obligation, less current portion	$	5,679

We had a total of $7.9 million in capital lease obligations outstanding at December 31, 2013. The weighted average interest rate on all of the Company’s capital leases is 7.04%. The Company’s capital leases are for certain equipment used in the manufacturing process. Of the total capital lease balance, $5.4 million of the Company’s capital leases outstanding as of December 31, 2013 consists of a Financing Arrangement entered into as of September 2009 to finance certain equipment used in the manufacturing process at the Company’s Bossier City, Louisiana facility. As part of the Financing Arrangement, an escrow account was provided for the Company by a local government entity through a financial institution and funds were released for qualifying purchase requisitions. As qualifying equipment was purchased for the facility, the Company entered into a sale-leaseback transaction with the governmental entity as part of the Financing Arrangement. The Financing Arrangement requires the Company to meet certain loan covenants, measured at the end of each fiscal quarter. These loan covenants follow the covenants required by the Company’s Credit Agreement.

Operating Leases

The Company has entered into various equipment and property leases with terms of ten years or less. Total rental expense for 2013, 2012, and 2011 was $3.1 million, $3.2 million, and $3.3 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, 2013 for operating leases with initial or remaining terms in excess of one year are (in thousands):


2014	$	2,733
2015		2,501
2016		2,225
2017		1,846
2018		688
Thereafter		753

	$	10,746