Lease Commitments

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Lease Commitments

Lease Commitments

At December 31, 2017, 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, 2017, for all non-cancelable operating leases with a term of one year or more are as follows:

TABLE 71: MINIMUM LEASE PAYMENTS

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2018	$	95.9
2019	96.0
2020	92.2
2021	76.5
2022	66.7
Later Years	360.5
Total Minimum Lease Payments	787.8
Less: Sublease Rentals	(21.2		)
Net Minimum Lease Payments	$	766.6

Operating lease rental expense, net of rental income, is recorded in occupancy expense and amounted to $76.7 million in 2017, $76.1 million in 2016, and $71.6 million in 2015.

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, 2017.

TABLE 72: PRESENT VALUE UNDER CAPITAL LEASE OBLIGATIONS

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS, NET
2018	$	8.4
2019	8.7
2020	(1.7		)
2021	—
2022	—
Later Years	—
Total Minimum Lease Payments, net	15.4
Less: Amount Representing Interest	(1.0		)
Net Present Value under Capital Lease Obligations	$	14.4