Leasing Arrangements

12 Months Ended

Dec. 31, 2016

The Company leases certain office and warehouse facilities, retail stores and machinery and equipment under noncancellable capital and operating leases that expire at various dates through 2031. Many leases include renewal and/or fair value purchase options.

Future minimum capital and operating lease payments at December 31, 2016 are:



	Capital Leases		Operating Leases
2017	$	1,732	$	28,930
2018	1,591		23,213
2019	1,952		17,949
2020	1,105		15,250
2021	1,084		10,372
Subsequent to 2021	1,806		26,275
Total minimum lease payments	9,270		$	121,989
Amounts representing interest	604
Present value of net minimum lease payments	8,666
Current maturities	1,542
Long-term capital lease obligation	$	7,124

Rental expense for all operating leases was $33.3 million, $35.8 million and $39.8 million in 2016, 2015 and 2014, respectively. The Company also recognized $0.7 million, $0.8 million and $0.7 million in 2016, 2015 and 2014, respectively, for rental income on subleases of equipment and buildings under operating leases in which it was the lessee.

KC accrued $1.2 million in early lease termination penalties within "Selling, general, and administrative expenses" for the year ended December 31, 2014. These penalties arose as a result of early exit provisions in certain operating lease contracts permitting KC to exit these sites in the first half of 2015 rather than upon lease expiration in outlying years.

Assets recorded under capital leases are included in property, plant and equipment and consist of the following:



	December 31
	2016		2015
Plant and equipment	$	4,807	$	4,807
Less accumulated depreciation	3,129		2,529
	$	1,678	$	2,278

Depreciation of plant and equipment under capital leases is included in depreciation expense in each of the years ended December 31, 2016, 2015 and 2014.