Lease Obligations

12 Months Ended

Mar. 31, 2017

We lease facilities and equipment almost solely under operating leases. At March 31, 2017, 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
2018	$	477
2019	414
2020	315
2021	264
2022	231
Thereafter	932
Total minimum lease payments ⁽¹⁾	$	2,633


(1)	Amount includes future minimum lease payments for the sale-leaseback transaction of $45 million. Minimum lease payments have not been reduced by minimum sublease rentals of $51 million due under future noncancelable subleases.

Rental expense under operating leases was $474 million, $433 million and $440 million in 2017, 2016 and 2015. 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 2017, 2016 and 2015.