LONG-TERM LEASES

12 Months Ended

Feb. 03, 2018

Leases [Abstract]

LONG-TERM LEASES

NOTE 7 — LONG-TERM LEASES

The Company leases certain of its store locations under noncancelable operating leases that require monthly rental payments primarily at fixed rates (although a number of the leases provide for additional rent based upon sales) expiring at various dates through fiscal 2029. None of our operating leases contain residual value guarantees. Many of these leases contain renewal options and require the Company to pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased properties. In addition, the Company leases various equipment under noncancelable operating leases. Total rent expense under operating leases was $54.9 million, $58.9 million and $58.6 million, for 2017, 2016 and 2015, respectively. Total contingent rentals included in operating leases above was $0.5 million for 2017, $0.6 million for 2016 and $0.7 million for 2015.

Future minimum rental payments under all operating leases as of February 3, 2018 are as follows:

(in thousands)	Operating Leases
2018	$	40,974
2019		33,466
2020		28,255
2021		23,979
2022		18,305
Thereafter		34,036
Total minimum lease payments	$	179,015

The gross amount of property and equipment under capital leases was $5.1 million at both February 3, 2018 and January 28, 2017. Accumulated amortization on property and equipment under capital leases was $5.1 million at both February 3, 2018 and January 28, 2017. There was no amortization expense on assets under capital lease for 2017 and 2016.

Related Party Transactions

Atlantic Retail Investors, LLC, which is partially owned by Michael J. Hayes, a former director and officer of the Company, owns the land and buildings occupied by three Fred’s stores. Richard H. Sain, former Senior Vice President of Retail Pharmacy Business Development, owns the land and building occupied by one of Fred’s Xpress Pharmacy locations. The terms and conditions regarding the leases on these locations were consistent in all material respects with other stores leases of the Company with unrelated landlords. The total rental payments for related party leases were $375.9 thousand for the year ended February 3, 2018 and $378.4 and $400.0 thousand for the years ended January 28, 2017 and January 30, 2016, respectively.