12. COMMITMENTS AND CONTINGENCIES

Leases

The Company is obligated under operating leases for a significant portion of its store properties. Certain leases provide for additional rental payments based on a percentage of sales in excess of a specified base (contingent rentals) and for payment by the Company of operating costs (taxes, maintenance and insurance), both of which vary by lease.

At January 30, 2016, future minimum lease payments for the noncancelable terms of operating leases, including lease renewals determined to be reasonably assured, and the present value of net minimum lease payments under capital leases are as follows:

Year	Capital Leases			Operating Leases
2016	$	14,480		$	89,754
2017		15,244			84,727
2018		14,762			79,598
2019		14,907			73,110
2020		15,055			66,593
2021 and thereafter		148,320			240,902

Total net minimum rentals(1)		222,768		$	634,684


Less: Amount representing interest		(90,682	)

Present value of net minimum lease payments, of which $5,394 is due within one year	$	132,086


(1)	Total net minimum rentals have not been reduced by minimum sublease rentals of $492 and $1,581 related to capital and operating leases, respectively, due in the future under noncancelable operating subleases.

Certain leases contain renewal options ranging from one to 50 years. Included in the minimum lease payments under operating leases are leased real estate, vehicles, postage meters, computer equipment and a related-party commitment with an entity associated with the Company's majority shareholder of $224 for each of years 2016 through 2021.

Rental expense, net of sublease income, consisted of the following:

	2015		2014		2013
Operating leases:
Buildings:
Rental expense	$	81,903	$	82,148	$	82,429
Contingent rentals		4,573		4,912		4,960
Fixtures and equipment		1,129		1,315		1,361

Totals	$	87,605	$	88,375	$	88,750

Rental expense includes amounts paid to an entity related to the Company's majority shareholder of $224 for each of 2015, 2014 and 2013.

Selling space has been licensed to certain other retailers ("leased departments") in many of the Company's facilities. Future minimum lease payments and rental expense disclosed above are reflected without a reduction for leased departments' license income.

On June 26, 2015, the Company entered into a sale-leaseback arrangement with an unrelated party. Under the arrangement, the Company sold six retail stores for $84,000 and leased them back for a period of 20 years with three optional 10-year renewal terms. The basic rent payable in connection with the lease is $6,888 per year, subject to annual adjustments for increases in the Consumer Price Index with a 2% minimum increase and a 4% maximum increase each year.

The leaseback has been accounted for as a capital lease, and the Company recorded a capital lease asset and obligation of $88,228 at the beginning of the lease term. The loss of $1,783 on this transaction was deferred and is being amortized to expense over the term of the lease.

Gain on Insurance Recovery

In November 2014, there was a fire at the Company's store located in North Riverside, Illinois. The merchandise in the store, which had a cost of $5,980, was damaged from the smoke and the Company filed an insurance claim to cover the inventory loss and property damage. The Company recognized a gain on insurance recovery related to the inventory loss of $1,356 and $10,779 in 2015 and 2014, respectively, which is shown separately in the accompanying consolidated statements of operations.

Contingencies

The Company is party to legal proceedings and claims that arise during the ordinary course of business. In the opinion of management, the ultimate outcome of any such litigation and claims will not have a material adverse effect on the Company's financial condition, results of operations or liquidity.