Commitments and Contingencies

Operating Leases

The Company occupies certain facilities and operates certain equipment and vehicles under non‑cancelable lease arrangements. Lease agreements may contain lease escalation clauses and purchase and renewal options. The Company recognizes scheduled lease escalation clauses over the course of the applicable lease term on a straight-line basis in the Consolidated Statements of Operations.

Total rent expense was $4,777 and $4,091 for the three months ended June 30, 2017 and 2018, respectively, and $13,608 and $13,843 for the nine months ended June 30, 2017 and 2018, respectively.

Future minimum aggregate rental payments under non-cancelable operating leases are as follows:



	Operating Leases
Fiscal Year
Remainder of 2018	$	2,985
2019	10,746
2020	9,368
2021	7,410
2022	4,998
Thereafter	10,948
Total	$	46,455

Capital Leases

The gross and net carrying values of the equipment under capital leases were $43,727 and $30,302, respectively, as of September 30, 2017 and were $50,005 and $30,077, respectively, as of June 30, 2018 and are recorded in Property, plant and equipment, net.

The following is a schedule showing the future minimum lease payments under capital leases by years and the present value of the minimum lease payments as of June 30, 2018.



	Capital Leases
Fiscal Year
Remainder of 2018	$	3,461
2019	10,492
2020	8,633
2021	5,563
2022	3,563
Thereafter	2,342
Total	34,054
Less amount representing interest (at rates ranging from 2.15% to 3.65%)	2,565
Present value of net minimum capital lease payments	31,489
Less current installments of obligations under capital leases	11,885
Obligations under capital leases, excluding current installments	$	19,604

The current installments of obligations under capital leases are included in Accrued expenses and other liabilities. Obligations under capital leases, excluding current installments, are included in Other non-current liabilities.

The Company is a lessor to multiple parties. The Company purchases equipment through internal funding or bank debt equal to the fair market value of the equipment. The equipment is then leased to customers for periods ranging from five to twenty years. As of June 30, 2018, future minimum lease payments receivable under operating leases are as follows:



	Operating Leases
Fiscal year
Remainder of 2018	$	1,372
2019	6,107
2020	7,257
2021	5,547
2022	5,395
Thereafter	63,356
Future minimum lease payments	$	89,034

Guarantees

From time to time, the Company is required to provide letters of credit, bank guarantees, or surety bonds in support of its commitments and as part of the terms and conditions on water treatment projects. In addition, the Company is required to provide letters of credit or surety bonds to the Department of Environmental Protection or equivalent in some states in order to maintain its licenses to handle toxic substances at certain of its water treatment facilities.

These financial instruments typically expire after all Company commitments have been met, a period typically ranging from twelve months to ten years, or more in some circumstances. The letters of credit, bank guarantees, or surety bonds are arranged through major banks or insurance companies. In the case of surety bonds, the Company generally indemnifies the issuer for all costs incurred if a claim is made against the bond.

As of September 30, 2017 and June 30, 2018, the Company had letters of credit totaling $17,274 and $13,244, respectively, and surety bonds totaling $87,849 and $100,487, respectively, outstanding under the Company’s credit arrangements. The longest maturity date of the letters of credit and surety bonds in effect as of June 30, 2018 was March 26, 2029. Additionally, as of September 30, 2017 and June 30, 2018, the Company had letters of credit totaling $901 and $867, respectively, and surety bonds totaling $12,970 and $5,545, respectively, outstanding under the Company’s prior arrangement with Siemens.

Litigation

From time to time, the Company is subject to various claims, charges and litigation matters that arise in the ordinary course of business. The Company believes these actions are a normal incident of the nature and kind of business in which the Company is engaged. While it is not feasible to predict the outcome of these matters with certainty, the Company does not believe that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or prospects.