IDow Chemical Company provided the following footnote in its \(200710-\mathrm{K}\) report relating to operating leases.

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a. Dow describes all of its leases as "operating." What is the significance of this designation?

b. How might we treat these operating leases in our analysis of the company?

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Leased Property The Company routinely leases premises for use as sales and adminis- trative offices, warehouses and tanks for product storage, motor vehicles, railcars, com- puters, office machines, and equipment under operating leases. In addition, the Company leases a gas turbine and aircraft in the United States, and ethylene plants in Canada and The Netherlands. At the termination of the leases, the Company has the option to purchase these plants and certain other leased equipment and buildings based on a fair market value determination. Rental expenses under operating leases, net of sublease rental income, were $445 million in 2007, $441 million in 2006 and $451 million in 2005. Future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year are as follows: Minimum Operating Lease Commitments (in millions) December 31, 2007 2008.. 2009 2010. 2011 2012 2013 and thereafter Total $ 231 200 171 117 93 441 $1,253