LEASES

In February 2016, the FASB issued ASU 2016-02, Leases, which replaced the existing guidance in ASC 840, Leases. This update is now ASC 842, Leases. This guidance will be effective for the Company in First Quarter 2019. ASC 842, Leases requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases and recognize a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense.

The Company leases stores, office space and warehouses under various leasing arrangements. There are 27 total leases that will be included in the implementation of ASC 842, Leases. All leases are classified as operating leases and certain leases include renewal options.

Lands' End is the lessor in one contract that is recognized under ASC 842, Leases. This contract is classified as an operating lease.

Total rental expense under operating leases was $19.7 million, $27.2 million and $30.6 million for Fiscal 2018, Fiscal 2017 and Fiscal 2016, respectively.

Total future commitments under these operating leases as of February 1, 2019 are as follows for the fiscal years ending (in thousands):



2019	$	10,389
2020	5,698
2021	4,226
2022	3,172
2023	2,174
Thereafter	6,415
Total minimum payments required⁽¹⁾	$	32,074

(1) Minimum payments have not been reduced by minimum sublease rentals of $4.2 million due in the future under noncancelable subleases.