NOTE 15 — Commitments and Contingencies

The Company leases retail store space, certain distribution and warehouse facilities, office space, equipment and other non-real estate assets under operating leases expiring from 1 to 17 years after May 31, 2018. Rent expense, excluding executory costs, was $820 million, $731 million and $661 million for the years ended May 31, 2018, 2017 and 2016, respectively. Amounts of minimum future annual commitments under non-cancelable operating and capital leases are as follows (in millions):



	2019		2020		2021		2022		2023		Thereafter		Total
Operating leases	$	589	$	523	$	472	$	412	$	361	$	1,608	$	3,965
Capital leases and other financing obligations⁽¹⁾	$	44	$	37	$	40	$	38	$	36	$	229	$	424


(1)	Capital leases and other financing obligations include payments related to build-to-suit lease arrangements.

As of May 31, 2018 and 2017, the Company had letters of credit outstanding totaling $165 million and $152 million, respectively. These letters of credit were generally issued for the purchase of inventory and guarantees of the Company’s performance under certain self-insurance and other programs.

In connection with various contracts and agreements, the Company provides routine indemnification relating to the enforceability of intellectual property rights, coverage for legal issues that arise and other items where the Company is acting as the guarantor. Currently, the Company has several such agreements in place. However, based on the Company’s historical experience and the estimated probability of future loss, the Company has determined the fair value of such indemnification is not material to the Company’s financial position or results of operations.

In the ordinary course of its business, the Company is involved in various legal proceedings involving contractual and employment relationships, product liability claims, trademark rights and a variety of other matters. While the Company cannot predict the outcome of its pending legal matters with certainty, the Company does not believe any currently identified claim, proceeding or litigation, either individually or in aggregate, will have a material impact on the Company’s results of operations, financial position or cash flows.