19. COMMITMENTS AND CONTINGENCIES

Commitments—The ARLP Partnership leases buildings and equipment under operating lease agreements that provide for the payment of both minimum and contingent rentals. The ARLP Partnership also has a noncancelable lease with SGP (Note 18) and a noncancelable lease for equipment under a capital lease obligation. Future minimum lease payments are as follows (in thousands):

			Other Operating Leases
Year Ending December 31,	Capital Lease		Affiliate		Others			Total

2014	$	2,178	$	240	$		1,897	$	2,137
2015	2,142		-		1,552			1,552
2016	2,100		-		1,552			1,552
2017	1,504		-		1,552			1,552
2018	1,461		-		1,057			1,057
Thereafter	14,453		-		-			-
Total future minimum lease payments	$	23,838	$	240	$	7,610		$	7,850
Less: amount representing interest	(5,415)
Present value of future minimum lease payments	18,423
Less: current portion	(1,288)
Long-term capital lease obligation	$	17,135

Rental expense (including rental expense incurred under operating lease agreements) was $5.1 million for the years ended December 31, 2013 and 2012 and $5.3 million for the year ended December 31, 2011.

Contractual Commitments—In connection with planned capital projects, the ARLP Partnership had contractual commitments of approximately $66.2 million at December 31, 2013. As of December 31, 2013, the ARLP Partnership had no commitments to purchase, from external production sources, coal in 2014.

On September 22, 2011, the ARLP Partnership entered into a series of transactions with White Oak and related entities to support development of a longwall mining operation currently under construction. The ARLP Partnership’s initial investment funding to White Oak at the Transaction date was $69.5 million and the ARLP Partnership has funded to White Oak $216.7 million between the Transaction Date and December 31, 2013. The ARLP Partnership has committed to fund total expenditures for the project of approximately $300.5 million to $425.5 million from the Transaction Date through the next year which includes the funding made to White Oak through December 31, 2013 discussed above. On the Transaction Date, the ARLP Partnership also entered into a coal handling and services agreement, pursuant to which it constructed and is operating a preparation plant and other surface facilities. The ARLP Partnership plans to utilize existing cash balances, future cash flows from operations, borrowings under revolving credit facilities and cash provided from the issuance of debt or equity to fund the commitments to the White Oak project. For more information on the White Oak transactions, please read Note 12.

General Litigation—We are not engaged in any material litigation. The ARLP Partnership is involved in various lawsuits, claims and regulatory proceedings incidental to its business. The ARLP Partnership records an accrual for a potential loss related to these matters when, in management’s opinion, such loss is probable and reasonably estimable. Based on known facts and circumstances, the ARLP Partnership believes the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on its financial condition, results of operations or liquidity. However, if the results of these matters were different from management’s current opinion and in amounts greater than the ARLP Partnership’s accruals, then they could have a material adverse effect.

Other—Effective October 1, 2013, the ARLP Partnership renewed its annual property and casualty insurance program. The aggregate maximum limit in the commercial property program is $100.0 million per occurrence excluding a $1.5 million deductible for property damage, a 90 or 120-day waiting period for underground business interruption depending on the mining complex and a $10.0 million overall aggregate deductible. The ARLP Partnership may experience significant insurance claims in the future that could have a material adverse effect on its business, financial condition, results of operations and ability to purchase property insurance in the future.