Lease Commitments

12 Months Ended

Dec. 31, 2017

Certain noncancellable leases are classified as capital leases, and the leased assets are included as part of “Properties, plant and equipment, at cost” on the Consolidated Balance Sheet. Such leasing arrangements involve crude oil production and processing equipment, service stations, bareboat charters, office buildings, and other facilities. Other leases are classified as operating leases and are not capitalized. The payments on operating leases are recorded as expense. Details of the capitalized leased assets are as follows:



	At December 31
	2017		2016
Upstream	$	678	$	676
Downstream	99		99
All Other	—		—
Total	777		775
Less: Accumulated amortization	515		383
Net capitalized leased assets	$	262	$	392

Rental expenses incurred for operating leases during 2017, 2016 and 2015 were as follows:



	Year ended December 31
	2017		2016		2015
Minimum rentals	$	726	$	943	$	1,041
Contingent rentals	1		2		2
Total	727		945		1,043
Less: Sublease rental income	6		7		9
Net rental expense	$	721	$	938	$	1,034

Contingent rentals are based on factors other than the passage of time, principally sales volumes at leased service stations. Certain leases include escalation clauses for adjusting rentals to reflect changes in price indices, renewal options ranging up to 25 years, and options to purchase the leased property during or at the end of the initial or renewal lease period for the fair market value or other specified amount at that time.

At December 31, 2017, the estimated future minimum lease payments (net of noncancelable sublease rentals) under operating and capital leases, which at inception had a noncancelable term of more than one year, were as follows:



		At December 31
		Operating Leases		Capital Leases
Year	2018	$	693	$	26
	2019	628		22
	2020	474		13
	2021	339		12
	2022	223		11
	Thereafter	538		142
Total		$	2,895	$	226
Less: Amounts representing interest and executory costs				$	(117	)
Net present values				109
Less: Capital lease obligations included in short-term debt				(15		)
Long-term capital lease obligations				$	94