COMMITMENTS AND CONTINGENT LIABILITIES Legal Matters From time to time, we are party to certain legal or administrative proceedings that arise in the ordinary course and are incidental to our business. For example, during periods when we are expanding our operations through the development of new pipelines or the construction of new plants, we may become involved in disputes with landowners that are in close proximity to our activities. While we are involved currently in several such proceedings and disputes, our management believes that none of such proceedings or disputes will have a material adverse effect on our results of operations, cash flows or financial condition. However, future events or circumstances, currently unknown to management, will determine whether the resolution of any litigation or claims ultimately will have a material effect on our results of operations, cash flows or financial condition in any future reporting periods. For a discussion about the Chapter 11 Cases, see Note 14. TPL . Effective as of December 31, 2018, we settled our arbitration with TPL SouthTex Processing Company, LP (TPL), an indirect subsidiary of Targa Resources Corp. (Targa), against FL Rich Gas Services, LP, an indirect subsidiary of the Partnership (FL Rich), related to the operation of T2 Cogen. T2 Cogen, owns a cogeneration facility in South Texas. FL Rich now owns 100% of T2 Cogen and is no longer a joint venture with TPL. TPL received one of the cogeneration units as part of the settlement agreement. See Note 12. Woodsboro . Our General Partner has been named as a defendant in a lawsuit filed on April 29, 2016 in Duval County, Texas styled Victor Henneke, Jr., et al. v. Southcross Energy Partners GP, LLC, et al., Cause No. DC-16-139, 229th Judicial District, Duval County, Texas (the Henneke Case). The Henneke Case involves claims by two employees of a third-party contractor for personal injury and wrongful death resulting from the alleged negligence of the Partnership related to a pipeline construction project located at our Woodsboro processing facility in 2016. No trial date has been set for the contractual liability claims in the case. On April 25, 2018, a judgment was entered against Southcross in the amount of approximately $7.7 million which have been appealed to the Texas Court of Appeals. We believe we have adequate insurance coverage to cover this matter and have recorded a $7.7 million liability and receivable from our insurance carrier. In April 2018 the plaintiffs filed two new lawsuits against Southcross CCNG Transmission Ltd. that allege the same or similar causes of actions for which we previously received a judgement in Duval County. The cases are styled as Ivy Gonzalez on behalf of M.R. Gonzalez and M.N. Gonzalez Minor Children vs. Southcross CCNG Transmission Ltd.; Gene Henneke as independent administrator of the estate of Dennis Henneke; Galbreath Contracting, Inc. and Severo Sepulveda, Jr. Cause no. DE-18-82 and Amy Gonzalez as co-personal representative of the estate of Jesus Gonzalez, Jr. under the Texas Survival Act and for and on behalf of wrongful death beneficiaries M.R. Gonzalez and M.N. Gonzalez Minor Children and Amy Gonzalez and Jesus Gonzalez, Sr. vs. Southcross CCNG Transmission Ltd.; Gene Henneke as independent administrator of the estate of Dennis Henneke; Galbreath Contracting, Inc. and Severo Sepulveda, Jr. Cause no. DE-18-83. We intend to defend vigorously these pending matters and believe we have adequate insurance coverage with respect to these matters. Regulatory Compliance In the ordinary course of our business, we are subject to various laws and regulations. In the opinion of our management, compliance with current laws and regulations will not have a material effect on our results of operations, cash flows or financial condition. Leases Capital Leases We have vehicle leases that are classified as capital leases. The termination dates of the lease agreements vary from 2019 to 2022. We recorded amortization expense related to the capital leases of $0.6 million and $0.6 million for the years ended December 31, 2018 and 2017 , respectively. Capital leases entered into during the years ended December 31, 2018 and 2017 were $1.6 million and $0.5 million . The capital lease obligation amounts included in the balance sheets were as follows (in thousands): December 31, 2018 December 31, 2017 Other current liabilities $ 646 $ 410 Other non-current liabilities 1,054 410 Total $ 1,700 $ 820 Operating Leases We maintain operating leases in the ordinary course of our business activities. These leases include those for office and other operating facilities and equipment. The termination dates of the lease agreements vary from 2019 to 2025. Expenses associated with operating leases, recorded in operations and maintenance expenses and general and administrative expenses in our statements of operations, were $5.6 million and $5.8 million for the years ended December 31, 2018 and 2017 , respectively. A rental reimbursement included in our lease agreement associated with the office space we leased in June 2015 of $1.8 million , net of amortization, has been recorded as a deferred liability in our consolidated balance sheets as of December 31, 2018. This amount will continue to be amortized against the lease payments over the length of the lease term. Future Minimum Lease Payments Future minimum annual rental commitments under our capital and operating leases at December 31, 2018 were as follows (in thousands): Years Ending December 31, Capital Leases Operating Leases 2019 $ 646 $ 2,912 2020 523 1,148 2021 414 922 2022 117 941 2023  953 Thereafter  1,956 Total future payments 1,700 $ 8,832 Less: Imputed interest $ (53 ) Future lease payments $ 1,647