Leases

Leases—Lessee. We lease land, office buildings and terminal equipment at various locations to conduct our business operations. We have also entered into contracts to lease pipeline capacity, primarily to accommodate the additional barrels from our Longhorn crude oil pipeline. Several of the agreements provide for negotiated renewal options and cancellation penalties, some of which include the requirement to remove our pipeline from the property for non-performance. Management expects that we will generally renew our expiring leases. Leases are evaluated at inception or at any subsequent material modification and, depending on the lease terms, are classified as either capital or operating leases, as appropriate under ASC 840, Leases. We recognize rent expense on a straight-line basis over the life of the lease. Total rent expense was $12.0 million, $21.0 million and $25.7 million for the years ended December 31, 2013, 2014 and 2015, respectively. Future minimum annual rentals under non-cancellable operating leases with initial or remaining terms greater than one year as of December 31, 2015, were as follows (in millions):



2016	$	26.5
2017	27.5
2018	21.7
2019	11.7
2020	9.4
Thereafter	81.1
Total	$	177.9

Leases—Lessor. We have entered into capacity and storage leases with our customers with remaining terms from one to approximately 20 years that are accounted for as operating-type leases. All of the agreements provide for negotiated extensions. Future minimum payments receivable under these arrangements as of December 31, 2015, were as follows (in millions):



2016	$	233.1
2017	202.0
2018	153.7
2019	118.2
2020	94.8
Thereafter	232.0
Total	$	1,033.8

Direct Financing Lease. We entered into a long-term throughput and deficiency agreement with a customer on a 40-mile pipeline we constructed in Texas and New Mexico, which contains minimum volume/payment commitments. This agreement is being accounted for as a direct financing lease. The net investment under direct financing leasing arrangements as of December 31, 2014 and 2015 was as follows (in millions):



	December 31, 2014		December 31, 2015
Total minimum lease payments receivable	$	37.9	$	30.7
Less: Unearned income	7.0		5.8
Recorded net investment in direct financing lease	$	30.9	$	24.9

The net investment in direct financing leases was classified in the consolidated balance sheets as follows (in millions):



	December 31, 2014		December 31, 2015
Current accounts receivable	$	6.1	$	6.4
Non-current accounts receivable	24.8		18.5
Total	$	30.9	$	24.9

Future minimum payments receivable under this direct financing lease for the next five years are: 2016 – $7.4 million; 2017 – $4.1 million; 2018 – $1.7 million; 2019 – $1.7 million; and 2020 – $1.7 million.