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COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain aircraft, facilities, and equipment used in its operations. The related lease agreements, which include both non-cancelable and month-to-month terms, generally provide for fixed monthly rentals and, for certain real estate leases, renewal options. The Company generally pays all insurance, taxes, and maintenance expenses associated with these aircraft leases and some of these leases contain renewal and purchase options at fair market values. Rental expense incurred under these leases consisted of the following:


	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2015		2014		2013
	(Thousands of dollars)
Aircraft	$	45,360	$	44,908	$	41,803
Other		8,358		7,790		7,657

Total	$	53,718	$	52,698	$	49,460

Included in the above rental expense is $-0- million in 2015, $0.5 million in 2014, and $0.6 million in 2013 paid to GE Air, Inc. and Gonsoulin Enterprises, Inc. for the lease of aircraft and real estate. Each of GE Air, Inc. and Gonsoulin Enterprises, Inc. is owned by our Chairman, CEO and majority voting shareholder.

The following table presents the remaining aggregate lease commitments under operating leases having initial non-cancelable terms in excess of one year. The table includes renewal periods on the principal operating facility lease.


	Aircraft		Other		Total
	(Thousands of dollars)
2016	$	44,988	$	5,305	$	50,293
2017		42,699		3,193		45,892
2018		39,018		2,552		41,570
2019		32,365		1,983		34,348
2020		28,526		1,413		29,939
Thereafter		89,604		745		90,349

	$	277,200	$	15,191	$	292,391

Purchase Options

In 2015, we purchased one heavy aircraft pursuant to a purchase option in the lease contract for an aggregate purchase price of $17.7 million using proceeds from the sale of short-term investments. As of December 31, 2015, we had options to purchase aircraft under lease becoming exercisable in 2016 through 2020 for the following aggregate purchase prices: $67.8 million in 2016, $55.7 million in 2017, $127.0 million in 2018, $150.4 million in 2019, and $22.7 million in 2020. Whether we exercise these options will depend upon several factors, including market conditions and our available cash at the respective exercise dates.

Guarantees

In the normal course of business with customers, vendors, and others, we provide guarantees, performance, and payment bonds pursuant to certain agreements. The aggregate amount of these guarantees and bonds at December 31, 2015 was $1.1 million.

Purchase Commitments

In 2014, we exercised an option to purchase six additional heavy aircraft for delivery in 2015 and 2016. In 2015, we executed an amendment to terminate the order of four of the heavy aircraft for delivery in 2016. We took delivery of one aircraft in 2015 and expect to take delivery of the final aircraft in the second quarter of 2016.

Total aircraft deposits of $3.6 million were included in Other Assets as of December 31, 2015. This amount represents deposits for aircraft purchase contracts and deposits on future lease buyout options. In the event the buyout options are not exercised, the deposits will be applied as lease payments.

Environmental Matters

We have recorded an aggregate estimated probable liability of $0.2 million as of December 31, 2015 for environmental response costs. We have conducted environmental surveys of our former Lafayette facility located at the Lafayette Regional Airport, which we vacated in 2001, and have determined that limited soil and groundwater contamination exists at two parcels of land at the former facility. We submitted an assessment report for both sites in 2003, updated it in 2006, and received approvals of our remediation plan from the Louisiana Department of Environmental Quality (“LDEQ”) and Louisiana Department of Natural Resources in 2010 and 2011, respectively. Since such time, we have installed groundwater monitoring wells at these sites and furnished periodic reports on contamination levels to the LDEQ. Pursuant to our agreement with the LDEQ, we were providing samples twice a year for both sites and plan to remove underground storage tanks under one of the sites later this year. In response to our request, LDEQ has approved annual sampling from 2015 to 2019, followed by reevaluation of the sampling frequency. Based upon our working relationships and agreements with the LDEQ and the results of our ongoing site monitoring, we believe, based on current circumstances, that our ultimate remediation costs for these sites will not be material to our consolidated financial position, results of operations, or cash flows.

Legal Matters

From time to time, we are involved in various legal actions incidental to our business, including actions relating to employee claims, actions relating to medical malpractice claims, various tax issues, grievance hearings before labor regulatory agencies, and miscellaneous third party tort actions. The outcome of these proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows.