15. Leases

The Company leases most of its retail stores and certain distribution facilities under noncancellable operating and capital leases, most of which have initial lease terms ranging from 5 to 22 years. The Company also leases certain of its equipment and other assets under noncancellable operating leases with initial terms ranging from 3 to 10 years. In addition to minimum rental payments, certain store leases require additional payments based on sales volume, as well as reimbursements for taxes, maintenance and insurance. Most leases contain renewal options, certain of which involve rent increases. Total rental expense, net of sublease income of $7,310, $8,995, and $8,559, was $1,017,316, $973,347, and $964,484 in fiscal 2017, 2016, and 2015, respectively. These amounts include contingent rentals of $15,522, $17,755 and $18,919 in fiscal 2017, 2016, and 2015, respectively.

During fiscal 2017, the Company did not enter into any sale-leaseback transactions whereby the Company sold owned operating stores to independent third parties and concurrent with the sale, entered into an agreement to lease the store back from the purchasers.

During fiscal 2016, the Company sold 10 owned operating stores to independent third parties. Net proceeds from the sale were $36,732. Concurrent with these sales, the Company entered into agreements to lease the stores back from the purchasers over minimum lease terms of 20 years. Eight leases were accounted for as operating leases and the remaining two were accounted for as capital leases. The transactions resulted in a gain for certain stores of $670 which is deferred over the life of the leases. In addition, the transaction resulted in a loss for certain stores of $546 which is included in the loss on sale of assets, net for the fifty-two weeks ended February 27, 2016.

During fiscal 2015, the Company did not enter into any sale-leaseback transactions whereby the Company sold owned operating stores to independent third parties and concurrent with the sale, entered into an agreement to lease the store back from the purchasers.

The net book values of assets under capital leases and sale-leasebacks accounted for under the financing method at March 4, 2017 and February 27, 2016 are summarized as follows:

	2017			2016
Land	$	5,063		$	5,063
Buildings		135,434			136,416
Leasehold improvements		1,470			1,612
Equipment		31,219			33,919
Accumulated depreciation		(132,105	)		(128,168	)

	$	41,081		$	48,842

Following is a summary of lease finance obligations at March 4, 2017 and February 27, 2016:

	2017			2016
Obligations under financing leases	$	60,575		$	74,913
Sale-leaseback obligations		4,740			4,740
Less current obligation		(21,245	)		(26,758	)

Long-term lease finance obligations	$	44,070		$	52,895

Following are the minimum lease payments for all properties under a lease agreement that will have to be made in each of the years indicated based on non-cancelable leases in effect as of March 4, 2017:

Fiscal year	Lease Financing Obligations			Operating Leases
2018	$	26,184		$	1,050,834
2019		15,448			988,754
2020		10,668			868,907
2021		6,800			743,598
2022		5,037			640,073
Later years		25,743			3,054,697

Total minimum lease payments		89,880		$	7,346,863


Amount representing interest		(24,565	)

Present value of minimum lease payments	$	65,315