Occupancy Expense and Information Systems and Communications Expense
Occupancy expense and information systems and communications expense include expense for depreciation of buildings, leasehold improvements, computer hardware and software, equipment, and furniture and fixtures. Total depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $401 million, $407 million and $408 million, respectively.
We lease 1,025,000 square feet at One Lincoln Street, our headquarters building located in Boston, Massachusetts, and a related underground parking garage, under 20-year, non-cancelable capital leases expiring in September 2023. A portion of the lease payments is offset by subleases for approximately 129,000 square feet of the building. In addition, we lease approximately 362,000 square feet at 20 Churchill Place, an office building located in the U.K., under a 20-year capital lease expiring in December 2028. As of December 31, 2013 and 2012, an aggregate net book value of $646 million and $576 million, respectively, related to the above-described capital leases was recorded in premises and equipment, with the related liability recorded in long-term debt, in our consolidated statement of condition.
Capital lease asset amortization is recorded in occupancy expense in our consolidated statement of income over the respective lease term. Lease payments are recorded as a reduction of the liability, with a portion recorded as imputed interest expense. For the years ended December 31, 2013, 2012 and 2011, interest expense related to these capital lease obligations, reflected in net interest revenue, was $40 million, $42 million and $43 million, respectively. As of December 31, 2013 and 2012, accumulated amortization of capital lease assets was $369 million and $313 million, respectively.
We have entered into non-cancelable operating leases for premises and equipment. Nearly all of these leases include renewal options. Costs related to operating leases for office space are recorded in occupancy expense. Costs related to operating leases for equipment are recorded in information systems and communications expense.
Total rental expense, net of sublease revenue, amounted to $224 million, $227 million and $232 million for the years ended December 31, 2013, 2012 and 2011, respectively. Total rental expense was reduced by sublease revenue of $6 million for the year ended December 31, 2013, $4 million for the year ended December 31, 2012 and $5 million for the year ended December 31, 2011.
The following table presents a summary of future minimum lease payments under non-cancelable capital and operating leases as of December 31, 2013. Aggregate future minimum rental commitments have been reduced by aggregate sublease rental commitments of $59 million for capital leases and $14 million for operating leases.
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| | | | | | | | | | | |
(In millions) | Capital Leases | | Operating Leases | | Total |
2014 | $ | 99 |
| | $ | 208 |
| | $ | 307 |
|
2015 | 101 |
| | 161 |
| | 262 |
|
2016 | 84 |
| | 125 |
| | 209 |
|
2017 | 84 |
| | 108 |
| | 192 |
|
2018 | 85 |
| | 101 |
| | 186 |
|
Thereafter | 598 |
| | 220 |
| | 818 |
|
Total minimum lease payments | 1,051 |
| | $ | 923 |
| | $ | 1,974 |
|
Less amount representing interest payments | (322 | ) | | | | |
Present value of minimum lease payments | $ | 729 |
| | | | |
