Certain noncancelable leases are classified as capital leases, and the leased assets are included as part of "Properties, plant and equipment, at cost." Such leasing arrangements involve tanker charters, crude oil production and processing equipment, service stations, office buildings and other facilities.
Other leases are classified as operating leases and are not capitalized. The payments on such leases are recorded as expense. Details of the capitalized leased assets are as follows:
|
At December 31 |
|
2007 |
2006* |
| * 2006 conformed to 2007 presentation. |
|
| Upstream |
$482 |
$461 |
| Downstream |
$551 |
$550 |
| Chemical and all other |
171 |
2 |
| Total |
1,204 |
1,013 |
| Less: Accumulated amortization |
628 |
548 |
| Net capitalized leased assets |
$576 |
$465 |
Rental expenses incurred for operating leases during 2007, 2006 and 2005 were as follows:
|
Year ended December 31 |
|
2007 |
2006 |
2005 |
| Minimum rentals |
$2,419 |
$2,326 |
$2,102 |
| Contingent rentals |
6 |
6 |
6 |
| Total |
2,425 |
2,332 |
2,108 |
| Less: Sublease rental income |
30 |
33 |
43 |
| Net rental expense |
$2,395 |
$2,299 |
$2,065 |
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, 2007, 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: |
|
|
| 2008 |
$513 |
$103 |
| 2009 |
478 |
106 |
| 2010 |
430 |
83 |
| 2011 |
347 |
85 |
| 2012 |
293 |
91 |
| Thereafter |
1,106 |
347 |
| Total |
$3,167 |
$815 |
| Less: Amounts representing interest and executory costs |
|
(315) |
Net present values |
|
500 |
| Less: Capital lease obligations included in short-term debt |
|
(94) |
| Long-term capital lease obligations |
|
$406 |