8. Commitments

(a) The Company’s lease commitments consist of rent and equipment under operating leases. The Company accounts for any incentives provided over the term of the lease. Total minimum annual rental payments to be made by the Company as at June 30, 2011 for each of the years ended December 31, are as follows:


	Operating Leases		Capital Leases
2011 (six months remaining)	$	2,760	$	12
2012		5,380		23
2013		2,089		21
2014		899		—
2015		510		—
Thereafter		1,812		—

	$	13,450	$	56

Rent expense was $1.0 million and $2.2 million for three and six months ended June 30, 2011, respectively (2010 — $1.2 million and $2.3 million, respectively) net of sublease rental of $nil and less than $0.1 million, respectively (2010 — $0.1 million and $0.2 million, respectively).

Recorded in the accrued liabilities balance as at June 30, 2011 is $3.8 million (December 31, 2010 — $4.2 million) related to accrued rent and lease inducements being recognized as an offset to rent expense over the term of the lease.

Purchase obligations under long-term supplier contracts as at June 30, 2011 were $18.8 million (December 31, 2010 — $13.6 million).

(b) As at June 30, 2011, the Company has letters of credit and advance payment guarantees secured by the Credit Facility of $nil (December 31, 2010 — $nil) outstanding. As at June 30, 2011, the Company also has letters of credit and advance payment guarantees outstanding of $1.2 million as compared to $2.4 million as at December 31, 2010, under the Bank of Montreal Facility.

(c) The Company compensates its sales force with both fixed and variable compensation. Commissions on the sale or lease of the Company’s theater systems are payable in graduated amounts from the time of collection of the customer’s first payment to the Company up to the collection of the customer’s last initial payment. At June 30, 2011, $1.3 million (December 31, 2010 —$1.5 million) of commissions have been accrued and will be payable in future periods.