Lease Commitments

12 Months Ended

Dec. 31, 2018

Certain noncancelable 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, vessels, 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 below:



	At December 31
	2018		2017
Upstream	$	719	$	678
Downstream	99		99
All Other	—		—
Total	818		777
Less: Accumulated amortization	617		515
Net capitalized leased assets	$	201	$	262

Rental expenses incurred for operating leases during 2018, 2017 and 2016 were as follows:



	Year ended December 31
	2018		2017		2016
Minimum rentals	$	820	$	726	$	943
Contingent rentals	1		1		2
Total	821		727		945
Less: Sublease rental income	5		6		7
Net rental expense	$	816	$	721	$	938

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, 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, 2018, 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	2019	$	540	$	30
	2020	492		22
	2021	378		17
	2022	242		16
	2023	166		16
	Thereafter	341		132
Total		$	2,159	$	233
Less: Amounts representing interest and executory costs				$	(88	)
Net present values				145
Less: Capital lease obligations included in short-term debt				(18		)
Long-term capital lease obligations				$	127
* Excluded from the table is an executed but not-yet-commenced capital lease with payments of $14, $15, $22, $21, $21, and $219 for 2019, 2020, 2021, 2022, 2023, and thereafter, respectively.