(7) Guarantees

ARE issues parent guarantees of commitments associated with the activities of its subsidiary companies. The guarantees generally result from subsidiary commodity purchase obligations, subsidiary operating lease commitments and subsidiary banking transactions. The nature of such items is to guarantee the performance of the subsidiary companies in meeting their respective underlying obligations. Except for operating lease commitments and letters of credit, all such underlying obligations are recorded on the books of the subsidiary companies and are included in the Consolidated Financial Statements included herein. Therefore, no such obligation is recorded again on the books of the parent. The parent would only be called upon to perform under the guarantee in the event of a payment default by the applicable subsidiary company. In satisfying such obligations, the parent would first look to the assets of the defaulting subsidiary company.

As of December 31, 2014, parental guaranteed obligations are approximately as follows (in thousands):

	2015		2016		2017		2018		Thereafter		Total
Commodity purchases	$	41,110		-		-		-		-	$	41,110
Letters of credit		15,300		-		-		-		-		15,300
	$	56,410	$	-	$	-	$	-	$	-	$	56,410

Presently, neither ARE nor any of its subsidiaries has any other types of guarantees outstanding that require liability recognition.