The Company leases certain store real estate, warehouses, distribution centers, office space and equipment. While the Company’s current strategy emphasizes ownership of store real estate, the Company operates in leased facilities in approximately half of its store locations. Lease terms generally range from 10 to 20 years with options to renew for varying terms at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years.

The following table provides supplemental balance sheet classification information related to leases:

(1)

Finance lease assets are recorded net of accumulated amortization of $285 and $345 as of August 17, 2019 and February 2, 2019.

The following table provides the components of lease cost:


		Second Quarter Ended		Two Quarters Ended
Lease Cost	Classification	August 17, 2019		August 17, 2019
Operating lease cost⁽¹⁾	Rent Expense	$	228	$	539
Sublease income	Rent Expense		(28)		(65)
Finance lease cost
Amortization of leased assets	Depreciation and Amortization		13		28
Interest on lease liabilities	Interest Expense		11		25

Net lease cost		$	224	$	527

(1)

Includes short-term leases and variable lease costs, which are immaterial.

Maturities of operating and finance lease liabilities are listed below. Amounts in the table include options to extend lease terms that are reasonably certain of being exercised.


	Operating		Finance
	Leases		Leases		Total
Remainder of 2019	$	451	$	41	$	492
2020		932		90		1,022
2021		861		89		950
2022		734		86		820
2023		663		85		748
Thereafter		6,824		895		7,719

Total lease payments		10,465		1,286	$	11,751

Less amount representing interest		3,327		408

Present value of lease liabilities⁽¹⁾	$	7,138	$	878

(1)

Includes the current portion of $675 for operating leases and $48 for finance leases.

Total future minimum rentals under non-cancellable subleases at August 17, 2019 were $276.

The following table provides the weighted-average lease term and discount rate for operating and finance leases:



	August 17, 2019
Weighted-average remaining lease term (years)
Operating leases	16.2
Finance leases	15.5
Weighted-average discount rate
Operating leases	4.3	%
Finance leases	4.3	%

The following table provides supplemental cash flow information related to leases:


	Two Quarters Ended
	August 17, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	476
Operating cash flows from finance leases	$	25
Financing cash flows from finance leases	$	21
Leased assets obtained in exchange for new operating lease liabilities	$	473
Leased assets obtained in exchange for new finance lease liabilities	$	101
Net gain recognized from sale and leaseback transactions⁽¹⁾	$	51

(1)

During the first quarter of 2019, the Company entered into sale leaseback transactions related to eight properties, which resulted in total proceeds of $102.

The Company adopted new lease accounting guidance in the first quarter of 2019 as discussed in Note 1 and Note 5, and as required, the following disclosure is provided for periods prior to adoption. Minimum annual rentals and payments under capital leases and lease-financed transactions for the five years subsequent to February 2, 2019 and in the aggregate are listed below. Amounts in the table below only include payments through the noncancelable lease term.


					Lease-
	Capital		Operating		Financed
	Leases		Leases		Transactions
2019	$	103	$	948	$	5
2020		89		880		6
2021		86		773		5
2022		82		649		5
2023		81		556		5
Thereafter		766		3,197		17

Total		1,207	$	7,003	$	43

Less estimated executory costs included in capital leases		—

Net minimum lease payments under capital leases		1,207
Less amount representing interest		372

Present value of net minimum lease payments under capital leases	$	835