. Leases

The Company leases equipment, land and various other properties under non-cancelable long-term leases, expiring at various dates. Certain leases contain options that would allow the Company to extend the lease or purchase the leased asset at the end of the base lease term. In addition, the Company enters into various non-cancelable royalty lease agreements under which future minimum payments are due.

Minimum payments due in future years under these agreements in effect at December 31, 2012 are as follows:



	Operating
	Leases		Royalties
	(In thousands)
2013	$	26,837	$	26,303
2014	25,109		35,954
2015	17,748		37,725
2016	9,708		33,833
2017	7,306		32,690
Thereafter	5,334		147,103
	$	92,042	$	313,608

Rental expense, including amounts related to these operating leases and other shorter-term arrangements, amounted to $41.2 million in 2012, $43.9 million in 2011 and $41.6 million in 2010.

Royalties are paid to lessors either as a fixed price per ton or as a percentage of the gross selling price of the mined coal. Royalties under the majority of the Company's significant leases are paid on the percentage of gross selling price basis. Royalty expense, including production royalties, was $302.0 million in 2012, $349.0 million in 2011 and $286.8 million in 2010.

As of December 31, 2012, certain of the Company's lease obligations were secured by outstanding surety bonds totaling $60.7 million.