Lease Obligations

12 Months Ended

Mar. 31, 2016

We lease facilities and equipment almost solely under operating leases. At March 31, 2016, 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
2017	$	363
2018	309
2019	252
2020	209
2021	168
Thereafter	669
Total minimum lease payments ⁽¹⁾	$	1,970


(1)	Minimum lease payments have not been reduced by minimum sublease rentals of $45 million due under future noncancelable subleases.

Rental expense under operating leases was $433 million, $440 million and $298 million in 2016, 2015 and 2014. 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 fourteen years, while remaining terms for equipment leases range from one to eight 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 2016, 2015 and 2014.