Note 9

Leases

A substantial portion of our store and warehouse properties are operated in leased facilities. SpartanNash also leases small ancillary warehouse facilities, tractor and trailer fleet and certain other equipment. Most of the property leases contain renewal options of varying terms. Terms of certain leases contain provisions requiring payment of percentage rent based on sales and payment of executory costs such as property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premises. Terms of certain leases of transportation equipment contain provisions requiring payment of percentage rent based upon miles driven. Portions of certain property are subleased to others. Operating leases often contain renewal options. In those locations in which it makes economic sense to continue to operate, management expects that, in the normal course of business, leases that expire will be renewed or replaced by other leases.

Rental expense, net of sublease income, under operating leases consisted of the following:

(In thousands)	January 3, 2015			December 28, 2013			March 30, 2013
Minimum rentals	$	56,848		$	28,978		$	31,993
Contingent rental payments		563			541			672
Sublease rental income		(5,027	)		(2,157	)		(1,928	)
	$	52,384		$	27,362		$	30,737

Total future lease commitments of SpartanNash under operating and capital leases in effect at January 3, 2015 are as follows:

	Operating Leases
(In thousands) Fiscal Year	Used in Operations		Subleased to Others		Total		Capital Leases
2015	$	43,041	$	3,978	$	47,019	$	13,282
2016		35,497		3,164		38,661		10,762
2017		28,253		2,531		30,784		10,426
2018		23,206		2,057		25,263		10,115
2019		14,548		1,692		16,240		9,154
Thereafter		62,356		9,696		72,052		42,191
Total	$	206,901	$	23,118	$	230,019		95,930
Interest								(31,510	)
Present value of minimum lease obligations								64,420
Current maturities								8,656
Long-term capitalized lease obligations							$	55,764

Assets held under capital leases consisted of the following:

(In thousands)	January 3, 2015		December 28, 2013
Buildings and improvements	$	72,747	$	75,920
Equipment		5,695		3,272
		78,442		79,192
Less accumulated amortization and depreciation		29,842		25,157
Net assets under capitalized leases	$	48,600	$	54,035

Amortization expense for property under capital leases was $4.4 million, $2.8 million and $3.8 million in fiscal year ended January 3, 2015, the 39 week period ended December 28, 2013 and fiscal year ended March 30, 2013, respectively.

Certain retail store facilities are leased to others. Of the stores leased to others, several are owned and others were obtained through leasing arrangements and are accounted for as operating leases. A majority of the leases provide for minimum and contingent rentals based upon stipulated sales volumes and contain renewal options. Certain of the leases contain escalation clauses.

Owned assets, included in property and equipment, which are leased to others are as follows:

(In thousands)	January 3, 2015		December 28, 2013
Land and improvements	$	3,327	$	3,770
Buildings		10,786		10,252
		14,113		14,022
Less accumulated amortization and depreciation		5,187		4,710
Net property	$	8,926	$	9,312

Future minimum rentals to be received under lease obligations in effect at January 3, 2015 are as follows:

(In thousands) Fiscal Year	Owned Property		Leased Property		Total
2015	$	3,975	$	4,715	$	8,690
2016		3,362		3,513		6,875
2017		2,340		2,981		5,321
2018		1,230		2,416		3,646
2019		984		1,965		2,949
Thereafter		2,204		10,194		12,398
Total	$	14,095	$	25,784	$	39,879