Lease Commitments

12 Months Ended

Dec. 31, 2014

Lease Commitments

Note 10 – Lease Commitments

At December 31, 2014, Northern Trust was obligated under a number of non-cancelable operating leases for buildings and equipment. Certain leases contain rent escalation clauses based on market indices or increases in real estate taxes and other operating expenses and renewal option clauses calling for increased rentals. There are no restrictions imposed by any lease agreement regarding the payment of dividends, debt financing or Northern Trust entering into further lease agreements. Minimum annual lease commitments as of December 31, 2014, for all non-cancelable operating leases with a term of one year or more are as follows:

TABLE 67: MINIMUM LEASE PAYMENTS

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2015	$	90.7
2016		86.0
2017		80.2
2018		70.5
2019		61.8
Later Years		291.4
Total Minimum Lease Payments		680.6
Less: Sublease Rentals		(24.0	)
Net Minimum Lease Payments	$	656.6

Operating lease rental expense, net of rental income, is recorded in occupancy expense and amounted to $73.2 million in 2014, $76.2 million in 2013, and $77.9 million in 2012.

One of the buildings and related land utilized for Chicago operations has been leased under an agreement that qualifies as a capital lease. The original long-term financing for the property was provided by Northern Trust. In the event of sale or refinancing, Northern Trust would anticipate receiving full repayment of any outstanding loans plus 42% of any proceeds in excess of the original project costs. The following table reflects the future minimum lease payments required under capital leases, net of any payments received on the long-term financing, and the present value of net capital lease obligations at December 31, 2014.

TABLE 68: PRESENT VALUE UNDER CAPITAL LEASE OBLIGATIONS

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS, NET
2015	$	8.3
2016		8.0
2017		8.2
2018		8.4
2019		8.7
Later Years		(1.7	)
Total Minimum Lease Payments, net		39.9
Less: Amount Representing Interest		(8.1	)
Net Present Value under Capital Lease Obligations	$	31.8