Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
Chunk: 35

Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 35
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 COMMITMENTS AND CONTINGENCIESThe Company leases certain facilities under various operating leases.  Most of the lease agreements provide the Company with the option of renewing its lease at the end of the lease term, at the fair rental value.  In most cases, management expects that in the normal course of business, facility leases will be renewed or replaced by other leases.  Minimum payments under these leases, exclusive of property taxes and insurance, are as follows: 

        (in thousands)

        Year Ended December 31,

        2025
         
        $
        5,231

        2026

        2,621

        2027

        1,710

        2028

        1,164

        2029

        474

        Thereafter

        894

        $
        12,094

       Facility rent expense was $9.0 million in 2024, $10.8 million in 2023 and $7.0 million in 2022.The Company is involved in various lawsuits and routine claims arising out of the normal course of its business. The Company maintains insurance coverage for its operations and employees with appropriate aggregate, per occurrence and deductible limits as the Company reasonably determines necessary or prudent with current operations and historical experience.  The major policies include coverage for property, general liability, auto, directors and officers, health, and workers’ compensation insurances.  The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information.  Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control.  In the opinion of management, there was not at least a reasonable possibility that the ultimate amount of liability not covered by insurance, if any, under any pending litigation and claims, individually or in the aggregate, will have a material adverse effect on the financial position or operating results of the Company.The Company’s health plans are self-funded high deductible plans with annual stop-loss insurance of $225,000 per claim.  Beginning in 2019, the Company’s workers compensation insurance is underwritten by an insurance company with no stop-loss value and $350,000 for prior claim years.