Occupancy Expense and Information Systems and Communications Expense

Occupancy expense and information systems and communications expense include depreciation of buildings, leasehold improvements, computer hardware and software, equipment, and furniture and fixtures. Total depreciation expense for 2015, 2014 and 2013 was $443 million, $417 million and $401 million, respectively.

We lease 1,025,000 square feet at One Lincoln Street, our headquarters building located in Boston, Massachusetts, and a related underground parking garage, under 20-year, non-cancelable capital leases expiring in September 2023. A portion of the lease payments is offset by subleases for approximately 127,000 square feet of the building. As of December 31, 2015 and 2014, an aggregate net book value of $231 million and $624 million, respectively, related to the above-described capital leases was recorded in premises and equipment, with the related liability recorded in long-term debt, in our consolidated statement of condition.

During 2015, we entered into amended lease agreements for our Channel Center property located in Boston, MA and our Churchill Place property located in the U.K. As a result of such amendments, these properties no longer qualify as capital leases and are classified and accounted for as operating leases.

Capital lease asset amortization is recorded in occupancy expense on a straight-line basis in our consolidated statement of income over the respective lease term. Lease payments are recorded as a reduction of the liability, with a portion recorded as imputed interest expense. For the years ended December 31, 2015, 2014 and 2013, interest expense related to these capital lease obligations, reflected in net interest revenue, was $32 million, $38 million and $40 million, respectively. As of December 31, 2015 and 2014, accumulated amortization of capital lease assets was $334 million and $426 million, respectively.

We have entered into non-cancelable operating leases for premises and equipment. Nearly all of these leases include renewal options. Costs related to operating leases for office space are recorded in occupancy expense. Costs related to operating leases for equipment are recorded in information systems and communications expense. Both are recorded on a straight-line basis.

Total rental expense net of sublease revenue for the years ended December 31, 2015, 2014 and 2013 amounted to $190 million, $204 million and $224 million, respectively. Total rental expense was reduced by sublease revenue of $4 million in 2015, and $6 million in both 2014 and 2013.

The following table presents a summary of future minimum lease payments under non-cancelable capital and operating leases as of December 31, 2015. Aggregate future minimum rental commitments have been reduced by aggregate sublease rental commitments of $48 million for capital leases and $20 million for operating leases.



(In millions)	Capital Leases			Operating Leases		Total
2016	$	58		$	198	$	256
2017	57			199		256
2018	53			163		216
2019	46			128		174
2020	45			114		159
Thereafter	125			498		623
Total minimum lease payments	384			$	1,300	$	1,684
Less amount representing interest payments	(98		)
Present value of minimum lease payments	$	286