Lease Commitments

12 Months Ended

Dec. 31, 2016

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
	2016		2015
Upstream	$	676	$	800
Downstream	99		98
All Other	—		—
Total	775		898
Less: Accumulated amortization	383		448
Net capitalized leased assets	$	392	$	450

Rental expenses incurred for operating leases during 2016, 2015 and 2014 were as follows:



	Year ended December 31
	2016		2015		2014
Minimum rentals	$	943	$	1,041	$	1,080
Contingent rentals	2		2		1
Total	945		1,043		1,081
Less: Sublease rental income	7		9		14
Net rental expense	$	938	$	1,034	$	1,067

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, 2016, 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	2017	$	615	$	22
	2018	554		20
	2019	387		21
	2020	298		12
	2021	235		12
	Thereafter	392		145
Total		$	2,481	$	232
Less: Amounts representing interest and executory costs				$	(125	)
Net present values				107
Less: Capital lease obligations included in short-term debt				(14		)
Long-term capital lease obligations				$	93