NOTE 6. LEASES

We have entered into capital leases for certain property and transportation equipment. At January 28, 2017, total capital lease obligations were $3.5 million, of which $0.6 million was classified as a short-term liability and included in capital lease obligations and $2.9 million was classified as a long-term liability and included in capital lease obligations in our consolidated balance sheet. At January 30, 2016, total capital lease obligations were $3.6 million, of which $0.5 million was classified as a short-term liability and included in capital lease obligations and $3.1 million was classified as a long-term liability and included in capital lease obligations in our consolidated balance sheet. The cost basis of total assets under capital leases at January 28, 2017 and January 30, 2016 was $5.1 million and $4.8 million, respectively, with accumulated amortization at January 28, 2017 and January 30, 2016 of $2.1 million and $1.6 million, respectively. Amortization expense related to assets under capital leases was $0.6 million, $0.5 million and $0.5 million in Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively.

We lease the majority of our stores under operating leases. The leases typically provide for terms of five to ten years with options to extend at our discretion. Many of our leases contain scheduled increases in annual rent payments and the majority of our leases also require us to pay maintenance, insurance and real estate taxes. Additionally, many of the lease agreements contain tenant improvement allowances, rent holidays and/or rent escalation clauses (contingent rentals) based on net sales for the location. For purposes of recognizing incentives and minimum rental expenses on a straight-line basis over the terms of the leases, we use the date of initial possession to begin amortization, which is generally when we enter the space and begin to make improvements in preparation of our intended use.

Most of our store leases contain provisions that allow for early termination of the lease if certain pre-determined annual sales levels are not met. Generally, these provisions allow the lease to be terminated between the third and fifth year of the lease. Should the lease be terminated under these provisions, in some cases, the unamortized portion of any landlord allowances related to that property would be payable to the landlord.

We also lease certain office equipment and transportation equipment under operating leases having initial terms of more than one year.

During Fiscal 2017, we increased our lease commitments by a net of 34 stores, each having initial lease termination dates between March 2021 and April 2027. At January 28, 2017, the future minimum lease payments under capital leases and the present value of such payments, and the future minimum lease payments under our operating leases, excluding maintenance, insurance and real estate taxes, including the net 34 lease commitments added during Fiscal 2017, were as follows (in thousands):

	Capital		Operating		Total
Fiscal 2018	$	844	$	60,199	$	61,043
Fiscal 2019		838		52,748		53,586
Fiscal 2020		811		43,188		43,999
Fiscal 2021		642		33,593		34,235
Fiscal 2022		399		24,178		24,577
Thereafter		889		41,438		42,327
Total minimum lease payments		4,423		255,344		259,767
Less amount representing interest		971		-		971
Present value of total minimum lease payments	$	3,452	$	255,344	$	258,796

Rental expense for all operating leases consisted of the following (in thousands):

	Fiscal Year Ended
	January 28, 2017			January 30, 2016			January 31, 2015
Minimum rentals		$	54,910		$	52,538		$	49,323
Contingent rentals			4,744			4,434			4,647
		$	59,654		$	56,972		$	53,970