7. Leases

Con-way and its subsidiaries are obligated under non-cancelable leases for certain facilities, equipment and vehicles. Certain leases also contain provisions that allow Con-way to extend the leases for various renewal periods.

In 2010 and 2009, Con-way acquired tractors for Con-way Freight and Con-way Truckload under various capital-lease agreements with lease terms ranging from three to five years and extending into 2015. Under the agreements, Con-way guarantees the residual value of the tractors at the end of the lease term. The stated amounts of the residual-value guarantees have been included in the minimum lease payments below.

A portion of the capital-lease agreements relates to tractors that were previously owned by Con-way Truckload. Under sale-leaseback arrangements involving these tractors, Con-way received sale proceeds of $20.4 million in 2010 and $17.3 million in 2009.

In connection with the capital leases, Con-way reported $105.3 million and $105.6 million of revenue equipment and $31.9 million and $13.8 million of accumulated depreciation in the consolidated balance sheets at December 31, 2011 and 2010, respectively.

Future minimum lease payments with initial or remaining non-cancelable lease terms in excess of one year, at December 31, 2011, were as follows:


(Dollars in thousands)
	Capital Leases			Operating Leases
Year ending December 31:
2012	$	25,833		$	75,746
2013		22,891			53,192
2014		19,883			33,963
2015		11,683			19,505
2016		--			14,983
Thereafter (through 2026)		--			29,302
Total minimum lease payments		80,290		$	226,691
Amount representing interest		(4,912	)
Present value of minimum lease payments		75,378
Current maturities of obligations under capital leases		(23,476	)
Long-term obligations under capital leases	$	51,902

Future minimum lease payments in the table above are net of $6.4 million of sublease income expected to be received under non-cancelable subleases.

The remaining unamortized gain resulting from past sale-leaseback transactions, $13.0 million at December 31, 2011, is reported in other liabilities and deferred credits in the consolidated balance sheets and will be amortized as a reduction to lease expense through 2018 when the corresponding lease terms expire.

Rental expense for operating leases comprised the following:


(Dollars in thousands)	Years ended December 31,
	2011			2010			2009
Minimum rentals	$	118,810		$	118,838		$	103,925
Sublease rentals		(2,395	)		(1,526	)		(4,681	)
	$	116,415		$	117,312		$	99,244