Lease Obligations
We lease facilities and equipment almost solely under operating leases. At March 31, 2013, future minimum lease payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year for years ending March 31 are:
|
| | | |
(In millions) | Noncancelable Operating Leases |
2014 | $ | 213 |
|
2015 | 165 |
|
2016 | 118 |
|
2017 | 90 |
|
2018 | 63 |
|
Thereafter | 202 |
|
Total minimum lease payments (1) | $ | 851 |
|
| |
(1) | Minimum lease payments have not been reduced by minimum sublease rentals of $33 million due under future noncancelable subleases. |
Rental expense under operating leases was $242 million, $240 million and $157 million in 2013, 2012 and 2011. We recognize rent expense on a straight-line basis over the term of the lease, taking into account, when applicable, lessor incentives for tenant improvements, periods where no rent payment is required and escalations in rent payments over the term of the lease. Deferred rent is recognized for the difference between the rent expense recognized on a straight-line basis and the payments made per the terms of the lease. Remaining terms for facilities leases generally range from one to seven years, while remaining terms for equipment leases range from one to five years. Most real property leases contain renewal options (generally for five-year increments) and provisions requiring us to pay property taxes and operating expenses in excess of base period amounts. Sublease rental income was not material for 2013, 2012 and 2011.
