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Occupancy Expense and Information Systems and Communications Expense
 12 Months Ended
Dec. 31, 2016
Occupancy Expense and Information Systems and Communications Expense [Abstract]  
Occupancy Expense and Information Systems and Communications Expense
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 in 2016, 2015 and 2014 was $472 million, $443 million and $417 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, 2016 and 2015, an aggregate net book value of $194 million and $231 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.
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. In 2016, 2015 and 2014, interest expense related to these capital lease obligations, reflected in net interest revenue, was $22 million, $32 million and $38 million, respectively. As of December 31, 2016 and 2015, accumulated amortization of capital lease assets was $365 million and $334 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 in 2016, 2015 and 2014 amounted to $194 million, $190 million and $204 million, respectively. Total rental expense was reduced by sublease revenue of $4 million in both 2016 and 2015, and $6 million in 2014.
The following table presents a summary of future minimum lease payments under non-cancelable capital and operating leases as of December 31, 2016. Aggregate future minimum rental commitments have been reduced by aggregate sublease rental commitments of $43 million for capital leases and $16 million for operating leases.
(In millions)
Capital
Leases
 
Operating
Leases
 
Total
2017
$
57

 
$
205

 
$
262

2018
53

 
185

 
238

2019
46

 
138

 
184

2020
45

 
123

 
168

2021
45

 
118

 
163

Thereafter
79

 
380

 
459

Total minimum lease payments
325

 
$
1,149

 
$
1,474

Less amount representing interest payments
(76
)
 
 
 
 
Present value of minimum lease payments
$
249

 
 
 
 
Expenses
The following table presents the components of other expenses for the periods indicated:
 
Years Ended December 31,
(In millions)
2016
 
2015
 
2014
Insurance
$
93

 
$
126

 
$
80

Regulatory fees and assessments
82

 
115

 
74

Litigation
50

 
422

 
173

Securities processing
42

 
79

 
68

Other
317

 
276

 
356

Total other expenses
$
584

 
$
1,018

 
$
751


Acquisition Costs
We recorded acquisition costs of $69 million, $20 million and $58 million in 2016, 2015 and 2014, respectively. Costs incurred in 2016 include approximately $53 million related to our acquisition of GEAM on July 1, 2016. For further information on the GEAM acquisition, refer to Note 1.
Restructuring Charges
In the year ended December 31, 2016, we recorded restructuring charges of $142 million related to State Street Beacon.
The following table presents aggregate restructuring activity for the periods indicated.
(In millions)
Employee
Related Costs
 
Real Estate
Consolidation
 
Asset and Other Write-offs
 
Total
Balance at December 31, 2013
$
52

 
$
47

 
$
7

 
$
106

Accruals for Business Operations and IT
32

 
22

 
21

 
75

Payments and other adjustments
(45
)
 
(46
)
 
(21
)
 
(112
)
Balance at December 31, 2014
$
39

 
$
23

 
$
7

 
$
69

Accruals for Business Operations and IT
(5
)
 
(3
)
 
13

 
5

Payments and other adjustments
(25
)
 
(9
)
 
(17
)
 
(51
)
Balance at December 31, 2015
$
9

 
$
11

 
$
3

 
$
23

Accruals for Business Operations and IT
(2
)
 
—

 
—

 
(2
)
Accruals for State Street Beacon
94

 
18

 
30

 
142

Payments and other adjustments
(64
)
 
(12
)
 
(31
)
 
(107
)
Balance at December 31, 2016
$
37

 
$
17

 
$
2

 
$
56