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Properties and Leases
12 Months Ended
Jan. 30, 2016
Property Plant and Equipment and Leases of Lessee [Abstract]  
Properties and Leases
Properties and Leases
 
 
January 30,
2016
 
January 31,
2015
 
(millions)
Land
$
1,629

 
$
1,664

Buildings on owned land
4,690

 
5,049

Buildings on leased land and leasehold improvements
1,672

 
1,819

Fixtures and equipment
4,910

 
4,828

Leased properties under capitalized leases
34

 
34

 
12,935

 
13,394

Less accumulated depreciation and amortization
5,319

 
5,594

 
$
7,616

 
$
7,800



In connection with various shopping center agreements, the Company is obligated to operate certain stores within the centers for periods of up to twenty years. Some of these agreements require that the stores be operated under a particular name.
The Company leases a portion of the real estate and personal property used in its operations. Most leases require the Company to pay real estate taxes, maintenance and other executory costs; some also require additional payments based on percentages of sales and some contain purchase options. Certain of the Company’s real estate leases have terms that extend for significant numbers of years and provide for rental rates that increase or decrease over time. In addition, certain of these leases contain covenants that restrict the ability of the tenant (typically a subsidiary of the Company) to take specified actions (including the payment of dividends or other amounts on account of its capital stock) unless the tenant satisfies certain financial tests.
Minimum rental commitments (excluding executory costs) at January 30, 2016, for noncancellable leases are:
 
 
Capitalized
Leases
 
Operating
Leases
 
Total
 
(millions)
Fiscal year
 
 
 
 
 
2016
$
3

 
$
306

 
$
309

2017
3

 
298

 
301

2018
3

 
281

 
284

2019
3

 
262

 
265

2020
3

 
232

 
235

After 2020
40

 
2,496

 
2,536

Total minimum lease payments
55

 
$
3,875

 
$
3,930

Less amount representing interest
25

 
 
 
 
Present value of net minimum capitalized lease payments
$
30

 
 
 
 


Capitalized leases are included in the Consolidated Balance Sheets as property and equipment while the related obligation is included in short-term ($1 million) and long-term ($29 million) debt. Amortization of assets subject to capitalized leases is included in depreciation and amortization expense. Total minimum lease payments shown above have not been reduced by minimum sublease rentals of $7 million on operating leases.
The Company is a guarantor with respect to certain lease obligations associated with The May Department Stores Company and previously disposed subsidiaries or businesses. The leases, one of which includes potential extensions to 2070, have future minimum lease payments aggregating $301 million and are offset by payments from existing tenants and subtenants. In addition, the Company is liable for other expenses related to the above leases, such as property taxes and common area maintenance, which are also payable by existing tenants and subtenants. Potential liabilities related to these guarantees are subject to certain defenses by the Company. The Company believes that the risk of significant loss from the guarantees of these lease obligations is remote.
Rental expense consists of:
 
 
2015
 
2014
 
2013
 
(millions)
Real estate (excluding executory costs)
 
 
 
 
 
Capitalized leases –
 
 
 
 
 
Contingent rentals
$

 
$

 
$

Operating leases –
 
 
 
 
 
Minimum rentals
288

 
265

 
256

Contingent rentals
19

 
22

 
22

 
307

 
287

 
278

Less income from subleases –
 
 
 
 
 
Operating leases
(6
)
 
(8
)
 
(10
)
 
$
301

 
$
279

 
$
268

Personal property – Operating leases
$
12

 
$
12

 
$
11



Included as a reduction to the expense above is deferred rent amortization of $8 million, $7 million and $8 million for 2015, 2014 and 2013, respectively, related to contributions received from landlords.