CAPITAL AND OPERATING LEASES

Lessee — The Company leases various assets under capital and operating leases, including coal railcars, office buildings, a warehouse, computers, vehicles and other equipment. The Company has also entered into various power purchase agreements which meet the criteria of capital and operating leases. The lease arrangements expire at various dates through 2032. Future minimum lease payments under non-cancelable leases at December 31, 2012 were:



	Capital Leases		Operating Leases
	(In millions)
2013	$	7	$	38
2014	5		31
2015	5		25
2016	3		21
2017	—		20
Thereafter	—		98
Total minimum lease payments	$	20	$	233
Less imputed interest	2
Present value of net minimum lease payments	18
Less current portion	6
Non-current portion	$	12

Rental expense for operating leases was $36 million in 2012, $40 million in 2011, and $32 million in 2010. Contingent rental payments of $27 million were incurred in 2012 related to power purchase agreements. The contingent payments are based upon delivery of energy and renewable energy credits, which are dependent upon future production.

Lessor — The Company leases a portion of its pipeline system to the Vector Pipeline through a capital lease contract that expires in 2020, with renewal options extending for five years. The Company owns a 40% interest in the Vector Pipeline. In addition, the Company has an energy services agreement, a portion of which is accounted for as a capital lease. The agreement expires in 2019, with a three or five year renewal option. The components of the net investment in the capital leases at December 31, 2012, were as follows:



	(In millions)
2013	$	12
2014	12
2015	12
2016	12
2017	12
Thereafter	31
Total minimum future lease receipts	91
Residual value of leased pipeline	40
Less unearned income	(48		)
Net investment in capital lease	83
Less current portion	(4		)
	$	79