Leases

Lessee

We lease office buildings, equipment and pipeline capacity (primarily to facilitate movements on our Longhorn pipeline and Little Rock pipeline extension) and have entered into storage contracts to conduct our business operations. We have also entered into land leases and right-of-way contracts, several of which have cancellation penalties that include the requirement to remove our pipeline from the property for non-performance. Several of our agreements provide for negotiated renewal options, and 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 $25.7 million, $30.2 million and $34.8 million for the years ended December 31, 2015, 2016 and 2017, respectively. Future minimum annual rentals under non-cancellable operating leases and storage contracts with initial or remaining terms greater than one year as of December 31, 2017, were as follows (in millions):



2018	$	34.5
2019	30.9
2020	27.5
2021	27.1
2022	26.5
Thereafter	116.0
Total	$	262.5

Lessor

We have entered into capacity leases and storage contracts 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, 2017, were as follows (in millions):



2018	$	262.9
2019	246.6
2020	178.5
2021	119.6
2022	82.9
Thereafter	168.4
Total	$	1,058.9

During 2017, we recognized contingent rental income from our condensate splitter in Corpus Christi, Texas in the amount of $24.9 million.

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, 2016 and 2017 was as follows (in millions):



	December 31, 2016		December 31, 2017
Total minimum lease payments receivable	$	23.3	$	19.2
Less: Unearned income	4.8		4.1
Recorded net investment in direct financing lease	$	18.5	$	15.1

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



	December 31, 2016		December 31, 2017
Other accounts receivable	$	3.4	$	1.1
Long-term receivables	15.1		14.0
Total	$	18.5	$	15.1

Future minimum payments receivable under this direct financing lease for the next five years are $1.7 million each year.