NOTE 10—LEASES

We lease most of our Retail stores and certain distribution centers, office facilities and equipment from third parties. Many of these leases include renewal options and, in certain instances, also include options to purchase. Future minimum lease payments to be made by us for noncancellable operating leases and capital leases as of February 24, 2018 consist of the following:



	Lease Obligations
Fiscal Year	Operating Leases		Capital Leases
2019	$	77	$	41
2020	79		38
2021	62		34
2022	46		30
2023	34		23
Thereafter	123		84
Total future minimum obligations	$	421	250
Less interest			(75		)
Present value of net future minimum obligations			175
Less current capital lease obligations			(26		)
Long-term capital lease obligations			$	149

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:



	2018			2017			2016
Minimum rent	$	103		$	86		$	87
Contingent rent	3			4			4
Rent expense⁽¹⁾	106			90			91
Less subtenant rentals	(29		)	(27		)	(27		)
Total net rent expense	$	77		$	63		$	64

(1)

Rent expense as presented here includes $13, $12 and $11, respectively, of operating lease rent expense related to stores within discontinued operations for which we expect to assign the lease of the stores that are held for sale within discontinued operations, but for which GAAP requires the historical expense to be included within continuing operations, as we expect to remain primarily obligated under these leases.

We lease certain property to third parties under operating, capital and direct financing leases. Under the direct financing leases, we lease buildings to Wholesale customers with terms ranging from one to three years.

Future minimum lease and subtenant rentals to be received under noncancellable operating and deferred financing income leases, under which we are the lessor, as of February 24, 2018, consist of the following:



	Lease Receipts
Fiscal Year	Operating Leases		Direct Financing Leases
2019	$	20	$	1
2020	19		—
2021	15		—
2022	13		—
2023	8		—
Thereafter	23		—
Total minimum lease receipts	$	98	$	1

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



	2018			2017
Property, plant and equipment	$	4		$	4
Less accumulated depreciation	(3		)	(3		)
Property, plant and equipment, net	$	1		$	1