Leases

For information regarding the future impacts as a result of the Company's adoption of ASC 842, Leases, in the first quarter of 2019, refer to Note 2, "New Accounting Pronouncements."

Operating Leases

The Company is committed to noncancelable leases with remaining terms generally from one to ten years. A substantial portion of the Company’s leases consist of store leases generally with an initial term of ten years. Annual store rent consists of a fixed minimum amount and/or contingent rent based on a percentage of sales exceeding a stipulated amount. Store lease terms generally require additional payments covering certain operating costs such as common area maintenance, utilities, insurance and taxes. These additional payments are excluded from the table below.

The following table provides rent expense for 2018, 2017 and 2016:



	2018			2017			2016
	(in millions)
Store Rent:
Fixed Minimum	$	663		$	642		$	607
Contingent	72			67			71
Total Store Rent	735			709			678
Office, Equipment and Other	98			94			87
Gross Rent Expense	833			803			765
Sublease Rental Income	(2		)	(2		)	(2		)
Total Rent Expense	$	831		$	801		$	763

The following table provides the Company’s minimum rent commitments under noncancelable operating leases in the next five fiscal years and the remaining years thereafter:



Fiscal Year (in millions) (a)
2019	$	698
2020	676
2021	630
2022	562
2023	504
Thereafter	$	1,738

________________


(a)	Excludes additional payments covering taxes, common area costs and certain other expenses generally required by store lease terms.

Capital Leases

The Company leases certain fulfillment equipment under capital leases that expire at various dates through 2023. The Company recorded $26 million of capital lease assets, net of accumulated amortization, in Property and Equipment, Net on the February 2, 2019 Consolidated Balance Sheet. Additionally, the Company recorded capital lease liabilities of $8 million and $19 million in Accrued Expenses and Other and Other Long-term Liabilities, respectively, on the February 2, 2019 Consolidated Balance Sheet.

Asset Retirement Obligations

The Company has asset retirement obligations related to certain company-owned international stores that contractually obligate the Company to remove leasehold improvements at the end of a lease. The Company’s liability for asset retirement obligations totaled $18 million as of February 2, 2019 and $9 million as of February 3, 2018. These liabilities are included in Other Long-term Liabilities on the Consolidated Balance Sheets.