PROPERTY AND EQUIPMENT AND LEASES:

Property and Equipment

Major classifications of property and equipment as of December 31, 2015 and 2014 were as follows (dollars in thousands):



	2015
	Gross Book Value		Accumulated Depreciation			Net Book Value
Property:
Land and land improvements	$	648,498	$	—		$	648,498
Buildings and leasehold improvements	238,272		(32,624		)	205,648
Bridges/tunnels/culverts	662,287		(85,040		)	577,247
Track property	2,508,100		(403,778		)	2,104,322
Total property	4,057,157		(521,442		)	3,535,715
Equipment:
Computer equipment	18,633		(11,709		)	6,924
Locomotives and railcars	653,077		(173,214		)	479,863
Vehicles and mobile equipment	65,241		(34,656		)	30,585
Signals and crossing equipment	69,315		(30,754		)	38,561
Track equipment	28,440		(11,628		)	16,812
Other equipment	73,405		(13,846		)	59,559
Total equipment	908,111		(275,807		)	632,304
Construction-in-process	47,044		—			47,044
Total property and equipment	$	5,012,312	$	(797,249	)	$	4,215,063



	2014
	Gross Book Value		Accumulated Depreciation			Net Book Value
Property:
Land and land improvements	$	582,383	$	—		$	582,383
Buildings and leasehold improvements	126,860		(22,719		)	104,141
Bridges/tunnels/culverts	636,605		(60,771		)	575,834
Track property	2,350,647		(357,969		)	1,992,678
Total property	3,696,495		(441,459		)	3,255,036
Equipment:
Computer equipment	13,997		(8,352		)	5,645
Locomotives and railcars	531,948		(145,073		)	386,875
Vehicles and mobile equipment	54,419		(31,209		)	23,210
Signals and crossing equipment	65,581		(22,408		)	43,173
Track equipment	27,073		(9,019		)	18,054
Other equipment	29,532		(16,017		)	13,515
Total equipment	722,550		(232,078		)	490,472
Construction-in-process	42,974		—			42,974
Total property and equipment	$	4,462,019	$	(673,537	)	$	3,788,482

Construction-in-process consisted primarily of costs associated with equipment purchases and track and equipment upgrades. Major classifications of construction-in-process as of December 31, 2015 and 2014 were as follows (dollars in thousands):



	2015		2014
Property:
Buildings and leasehold improvements	$	2,097	$	1,312
Bridges/tunnels/culverts	39		4,082
Track property	24,962		24,078
Equipment:
Locomotives and railcars	12,875		11,170
Other equipment	7,071		2,332
Total construction-in-process	$	47,044	$	42,974

Track property upgrades typically involve the substantial replacement of rail, ties and/or other track material. Locomotive upgrades generally consist of major mechanical enhancements to the Company's existing locomotive fleet. Upgrades to the Company's railcars typically include rebuilding of car body structures and/or converting to an alternative type of railcar.

Depreciation expense for the years ended December 31, 2015, 2014 and 2013 totaled $159.1 million, $135.0 million and $119.2 million, respectively.

The Company's credit agreement is collateralized by a substantial portion of the Company's real and personal property assets of its domestic subsidiaries that have guaranteed the United States obligations under the credit agreement and a substantial portion of the personal property assets of its foreign subsidiaries that have guaranteed the foreign obligations under the credit agreement. See Note 8, Long-Term Debt, for more information on the Company's credit agreements.

Leases

The Company enters into operating leases for railcars, locomotives and other equipment as well as real property. The Company also enters into agreements with other railroads and other third parties to operate over certain sections of their track and pays a per car fee to use the track or makes an annual lease payment. The costs associated with operating leases are expensed as incurred and are not included in the property and equipment table above.

The number of railcars and locomotives leased by the Company as of December 31, 2015 and 2014 was as follows:

The Company's operating lease expense for equipment and real property leases and expense for the use of other railroad and other third parties' track for the years ended December 31, 2015, 2014 and 2013 was as follows (dollars in thousands):



	2015		2014		2013
Equipment	$	82,853	$	29,462	$	32,050
Real property	$	11,715	$	8,361	$	8,062
Trackage rights	$	78,140	$	53,783	$	50,911

The Company is a party to several lease agreements with Class I carriers and other third parties to operate over various rail lines in North America, with varied expirations. Certain of these lease agreements have annual lease payments, which are included in the operating lease section of the schedule of future minimum lease payments shown below as well as the trackage rights expense in the table above. Revenues from railroads that the Company leases from Class I carriers and other third parties collectively accounted for approximately 7.4% of the Company's 2015 total operating revenues. Leases from Class I railroads and other third parties that are subject to expiration in each of the next 10 years represent less than 2% of the Company's annual revenues in the year of expiration based on the Company's operating revenues for the year ended December 31, 2015.

The following is a summary of future minimum lease payments under capital leases and operating leases as of December 31, 2015 (dollars in thousands):



	Capital		Operating		Total
2016	$	24,841	$	112,230	$	137,071
2017	18,935		93,761		112,696
2018	10,398		81,471		91,869
2019	9,827		64,122		73,949
2020	16,672		50,601		67,273
Thereafter	43,738		304,819		348,557
Total minimum payments	$	124,411	$	707,004	$	831,415

December 31,

Locomotives