Note 10 – Leases

A substantial portion of the Company’s retail stores and warehouse properties are operated in leased facilities. The Company also leases small ancillary warehouse facilities, the majority of the tractors and trailers within its 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. Certain properties or portions thereof 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)	2017			2016			2015
Minimum rentals	$	55,159		$	57,478		$	57,625
Contingent rent (reductions) increases		(237	)		314			267
Sublease rental income		(3,407	)		(4,830	)		(5,311	)
Total	$	51,515		$	52,962		$	52,581

The Company’s total future lease commitments under operating and capital leases in effect at December 30, 2017 are as follows:

	Operating Leases
	Used in		Subleased				Capital
(In thousands)	Operations		to Others		Total		Leases
2018	$	52,613	$	1,265	$	53,878	$	9,198
2019		41,489		1,039		42,528		8,756
2020		33,951		817		34,768		6,593
2021		26,719		694		27,413		4,577
2022		19,779		468		20,247		4,233
Thereafter		67,317		504		67,821		28,862
Total	$	241,868	$	4,787	$	246,655		62,219
	Interest							(19,315	)
	Present value of minimum lease obligations							42,904
	Current maturities							6,168
	Long-term capital lease obligations						$	36,736

Assets held under capital leases consisted of the following:

	December 30,		December 31,
(In thousands)	2017		2016
Building and improvements	$	60,398	$	61,831
Equipment		3,727		3,403
Assets under capital leases		64,125		65,234
Less accumulated amortization and depreciation		29,518		25,163
Net assets under capital leases	$	34,607	$	40,071

Amortization expense for property under capital leases was $4.4 million, $5.2 million and $3.6 million in 2017, 2016 and 2015, respectively.

Certain retail store facilities, either owned or obtained through leasing arrangements, are leased to others. 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:

	December 30,		December 31,
(In thousands)	2017		2016
Land and improvements	$	6,515	$	3,860
Buildings		24,236		13,948
Long-term debt and capital lease obligations		30,751		17,808
Less accumulated amortization and depreciation		8,123		7,625
Net property	$	22,628	$	10,183

Future minimum rentals to be received under lease obligations in effect at December 30, 2017 are as follows:

(In thousands)	2018		2019		2020		2021		2022		Thereafter		Total
Owned property	$	4,194	$	4,044	$	3,635	$	3,359	$	2,973	$	16,768	$	34,973
Leased property		2,708		2,268		2,022		1,545		896		3,731		13,170
Total	$	6,902	$	6,312	$	5,657	$	4,904	$	3,869	$	20,499	$	48,143