Lease Obligations

12 Months Ended

Mar. 31, 2015

We lease facilities and equipment almost solely under operating leases. At March 31, 2015, 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
2016	$	316
2017	271
2018	219
2019	170
2020	140
Thereafter	650
Total minimum lease payments ⁽¹⁾	$	1,766


(1)	Minimum lease payments have not been reduced by minimum sublease rentals of $46 million due under future noncancelable subleases.

Rental expense under operating leases was $440 million, $298 million and $232 million in 2015, 2014 and 2013. 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 twelve 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 2015, 2014 and 2013.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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