12.

Leases

Sale-leaseback Transactions

Denton Facility

On June 2, 2016, the Company entered into an agreement to sell its manufacturing facility in Denton, Texas for gross proceeds of $5.0 million, less costs associated with the transaction of $0.3 million, or net proceeds of $4.7 million. As a part of the transaction, the Company entered into a lease for the property from the purchaser for a period of 13 years.

Prior to the consummation of the above transaction, the Company entered into a sublease agreement with a supplier of the Company at this facility for a period of five years. Due to the Company’s continuing involvement through the sublease agreement, the Company has accounted for the sale-leaseback as a financing liability. Payments made by the Company are allocated between interest expense and a reduction to the sale-leaseback financing liability. The weighted-average effective interest rate of the sale-leaseback financing liability was 2.22%.

As of December 31, 2016, future payments on the sale-leaseback financing liability are as follows (in thousands):

Fiscal Years	Payments
2017		399
2018		407
2019		415
2020		423
2021		431
Thereafter		3,480
Total payments		5,555
Less amount representing interest		(729	)
Total sale-leaseback financing liability		4,826
Less current portion of sale-leaseback financing liability included in accounts payable and accrued expenses		(294	)
Long-term portion of sale-leaseback financing liability included in other liabilities	$	4,532

As of December 31, 2016 and 2015, the net carrying value of the Denton facility assets that are included in property, plant, and equipment on our Consolidated Balance Sheets amounted to $12.3 million and $13.1 million, respectively. The useful life of these assets was modified to the remainder of the lease’s duration.

Telford Facility

On June 2, 2016, the Company entered into an agreement to sell its manufacturing facility in Telford, Pennsylvania for gross proceeds of $6.0 million, less costs associated with the transaction of $0.4 million, or net proceeds of $5.6 million. As a part of the transaction, the Company entered into a lease for the property from the purchaser for a period of 13 years.

The Company recorded a deferred gain on the sale of this facility in the amount of $2.4 million recorded in the Consolidated Balance Sheets as an offset to property, plant, and equipment, which will be recognized over the 13-year lease term. As a result of this transaction, the Company initially recorded a capital lease obligation of $5.7 million for the facilities leased. The weighted-average effective interest rate of the capital lease was 3.43%.

Indianapolis Facility

On August 16, 2016, the Company entered into an agreement to sell its manufacturing facility in Indianapolis, Indiana for gross proceeds of $3.3 million, less costs associated with the transaction of $0.1 million, or net proceeds of $3.2 million. As a part of the transaction, the Company entered into a lease for the property from the purchaser for a period of 13 years.

The Company recorded a deferred gain on the sale of this facility in the amount of $2.0 million recorded in the Consolidated Balance Sheets as an offset to property, plant, and equipment, which will be recognized over the 13-year lease term. As a result of this transaction, the Company initially recorded a capital lease obligation of $3.0 million for the facilities leased. The weighted-average effective interest rate of the capital lease was 3.25%.

The future minimum payments for the Indianapolis and Telford capital leases that the Company entered into as of December 31, 2016, are as follows (in thousands):

Fiscal Years	Payments
2017	$	744
2018		759
2019		774
2020		790
2021		805
Thereafter		6,577
Total payments		10,449
Less amount representing interest		(1,978	)
Present value of future minimum lease payments		8,471
Less current portion of capital lease obligation included in accounts payable and accrued expenses		(470	)
Long-term portion of capital lease obligation included in other liabilities	$	8,001

Prior to the execution of these transactions, the Company did not have any assets held under capital leases. Capital lease assets included in the Consolidated Balance Sheets as part of property, plant, and equipment as of December 31, 2016, are as follows (in thousands):

	December 31, 2016			Depreciable Life (Years)

Building and improvements, net of deferred gain	$	4,385			13
Less: Accumulated depreciation		(197	)
Total	$	4,188

Rent

We lease certain facilities on a year-to-year basis. We also have future annual minimum rental commitments under noncancellable operating leases as follows:

(Table only in thousands) December 31,	Commitment
2017	$	3,753
2018		3,072
2019		1,982
2020		1,456
2021		1,236
2022 and thereafter		3,976
	$	15,475

Total rent expense under all operating leases for 2016, 2015 and 2014 was $4.5 million, $4.0 million and $2.9 million, respectively.