NOTE 8—LEASES

The Company leases most of its retail stores and certain distribution centers, office facilities and equipment from third parties. Many of these leases include renewal options and, to a limited extent, include options to purchase. Future minimum lease payments to be made by the Company for noncancellable operating leases and capital leases as of February 27, 2016 consist of the following:



	Lease Obligations
Fiscal Year	Operating Leases		Capital Leases
2017	$	141	$	42
2018	126		42
2019	105		39
2020	85		36
2021	62		31
Thereafter	167		122
Total future minimum obligations	$	686	312
Less interest			(85		)
Present value of net future minimum obligations			227
Less current capital lease obligations			(24		)
Long-term capital lease obligations			$	203

Total future minimum obligations have not been reduced for future minimum subtenant rentals under certain operating subleases.

Rent expense, other operating lease expense and subtenant rentals all under operating leases consisted of the following:



	2016			2015			2014
Minimum rent	$	156		$	148		$	143
Contingent rent	5			6			5
Rent expense	161			154			148
Less subtenant rentals	(29		)	(29		)	(27		)
Total net rent expense	$	132		$	125		$	121

The Company leases certain property to third parties under operating, capital and direct financing leases. Under the direct financing leases, the Company leases buildings to independent retail customers with terms ranging from one to five years.

Future minimum lease and subtenant rentals to be received under noncancellable operating and deferred financing income leases, under which the Company is the lessor, as of February 27, 2016, consist of the following:



	Lease Receipts
Fiscal Year	Operating Leases		Direct Financing Leases
2017	$	21	$	1
2018	18		1
2019	12		—
2020	7		—
2021	3		—
Thereafter	11		—
Total minimum lease receipts	$	72	2
Less interest			—
Net investment in direct financing leases			2
Less current portion			(1		)
Long-term portion			$	1

The carrying value of owned property leased to third parties under operating leases was as follows:



	2016			2015
Property, plant and equipment	$	4		$	4
Less accumulated depreciation	(3		)	(3		)
Property, plant and equipment, net	$	1		$	1