NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases on our balance sheet consists primarily of lease contracts for vehicles with retail customers, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned.

The net investment in operating leases at December 31 was as follows (in millions):



	2014			2013
Automotive Sector
Vehicles, net of depreciation	$	1,699		$	1,384
Financial Services Sector
Vehicles and other equipment, at cost (a)	24,952			21,738
Accumulated depreciation	(3,396		)	(3,115		)
Allowance for credit losses	(38		)	(23		)
Total Financial Services sector	21,518			18,600
Total Company	$	23,217		$	19,984

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(a)

Includes Ford Credit’s operating lease assets of $9.6 billion and $8.1 billion at December 31, 2014 and 2013, respectively, for which the related cash flows have been used to secure certain lease securitization transactions. Cash flows associated with the net investment in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.

NOTE 6. NET INVESTMENT IN OPERATING LEASES (Continued)

Financial Services Sector

Operating lease depreciation expense (which includes gains and losses on disposal of assets) for the years ended December 31 was as follows (in millions):



	2014		2013		2012
Operating lease depreciation expense	$	3,098	$	2,411	$	1,795

Included in Financial Services revenues are rents on operating leases. The amounts contractually due for minimum rentals on operating leases at December 31, 2014 were as follows (in millions):



	2015		2016		2017		2018		Thereafter		Total
Minimum rentals on operating leases	$	2,174	$	2,186	$	1,348	$	188	$	4	$	5,900