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, 2016 are as follows:



	Operating
	Leases		Royalties
	(In thousands)
2017	$	14,653	$	3,994
2018	14,485		6,021
2019	5,321		6,105
2020	2,260		7,147
2021	1,985		7,809
Thereafter	10,317		46,499
	$	49,021	$	77,575

Obligations for the future minimum payments under capital leases for equipment totaling $0.0 million and $40.0. million at December 31, 2016 and 2015, respectively, are included in other long term debt obligations in Note 13, “Debt and Financing Arrangements”.

Rental expense, including amounts related to these operating leases and other shorter-term arrangements, amounted to $5.0 million for the period October 2 through December 31, 2016, $19.4 million for the period January 1 through October 1, 2016, $28.4 million in 2015 and $42.1 million in 2014.

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 $45.3 million for the period October 2 through December 31, 2016, $116.4 million for the period January 1 through October 1, 2016, $227.7 million in 2015 and $242.5 million in 2014.

As of December 31, 2016, certain of the Company’s lease obligations were secured by outstanding surety bonds totaling $32.6 million.