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, 2018 are as follows:



	Operating
	Leases		Royalties
	(In thousands)
2019	$	3,681	$	3,669
2020	2,260		8,096
2021	1,985		8,296
2022	2,024		8,086
2023	2,044		7,749
Thereafter	6,248		84,913
	$	18,242	$	120,809

The Company has no obligations for future minimum payments under capital leases for equipment at December 31, 2018 and 2017.

Rental expense, including amounts related to these operating leases and other shorter-term arrangements, amounted to $12.4 million in 2018, $19.2 million in 2017, $5.0 million for the period October 2 through December 31, 2016 and $19.4 million for the period January 1 through October 1, 2016.

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 $166.1 million in 2018, $167.4 million in 2017, $45.3 million for the period October 2 through December 31, 2016 and $116.4 million for the period January 1 through October 1, 2016.

As of December 31, 2018, certain of the Company’s lease obligations were secured by outstanding surety bonds totaling $30.4 million.