Leases

12 Months Ended

Dec. 31, 2014

17. Leases

We lease certain locomotives, freight cars, and other property. The Consolidated Statements of Financial Position as of December 31, 2014 and 2013 included $2,454 million, net of $1,210 million of accumulated depreciation, and $2,486 million, net of $1,092 million of accumulated depreciation, respectively, for properties held under capital leases. A charge to income resulting from the depreciation for assets held under capital leases is included within depreciation expense in our Consolidated Statements of Income. Future minimum lease payments for operating and capital leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2014, were as follows:

Millions	Operating Leases		Capital Leases
2015	$	508	$	253
2016		484		249
2017		429		246
2018		356		224
2019		323		210
Later years		1,625		745
Total minimum lease payments	$	3,725	$	1,927
Amount representing interest		N/A		(407)
Present value of minimum lease payments		N/A	$	1,520

Approximately 95% of capital lease payments relate to locomotives. Rent expense for operating leases with terms exceeding one month was $593 million in 2014, $618 million in 2013, and $631 million in 2012. When cash rental payments are not made on a straight-line basis, we recognize variable rental expense on a straight-line basis over the lease term. Contingent rentals and sub-rentals are not significant.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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