Lease Obligations |
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Lease Obligations | 12. Lease Obligations Net rental expense amounted to approximately $169 million, $218 million and $206 million in the years ended December 31, 2015, 2014 and 2013, respectively. The company's lease obligations relate primarily to office facilities, equipment used in connection with long-term construction contracts and other personal property. Net rental expense in 2015 was lower compared to 2014, primarily due to a decrease in rental equipment and facilities required to support project execution activities in the mining and metals business line of the Industrial & Infrastructure segment as well as the Oil & Gas and Government segments. Net rental expense in 2014 was higher compared to 2013, primarily due to an increase in rental equipment required to support project execution activities in the Oil & Gas segment. The company's obligations for minimum rentals under non-cancelable operating leases are as follows:
In November 2015, the company sold two office buildings located in California and subsequently entered into a twelve year lease with the purchaser. The resulting gain on the sale of the property was approximately $58 million, of which $7 million was recognized during the fourth quarter of 2015 and included in corporate general and administrative expense in the Consolidated Statement of Earnings. The remaining gain of approximately $51 million was deferred and will be amortized over the life of the lease on a straight-line basis.
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