Leases

12 Months Ended

Feb. 01, 2020

We lease our stores, fulfillment center and other facilities under operating lease arrangements with unrelated parties and related parties owned by Schottenstein Affiliates. The majority of our real estate leases provide for renewal options, which are typically not included in the lease term used for measuring the lease assets and lease liabilities as it is not reasonably certain we will exercise options. We pay variable amounts for certain lease and non-lease components as well as for contingent rentals based on sales for certain leases where the sales are in excess of specified levels and for leases that have certain contingent triggering events that are in effect. We also lease equipment under operating leases.

We receive operating sublease income from unrelated third parties for leasing portions or all of certain properties. Operating sublease income and operating expenses for these properties are included in operating expenses in our consolidated statements of operations.

Lease income and lease expense consisted of the following for fiscal 2019 (after the adoption of ASU 2016-02) and fiscal 2018 and 2017 (prior to the adoption of ASU 2016-02):



	Fiscal
(in thousands)	2019		2018		2017
Operating lease income	$	9,601	$	4,659	$	4,491
Operating lease expense:
Lease expense to unrelated parties	$	213,156	$	204,873	$	178,353
Lease expense to related parties	9,486		9,220		9,150
Variable lease expense to unrelated parties	53,239		23,822		27,804
Variable lease expense to related parties	1,283		—		—
	$	277,164	$	237,915	$	215,307



	Fiscal 2019
Other operating lease information:
Weighted-average remaining lease term	6.0 years
Weighted-average discount rate	3.9	%

As of February 1, 2020, our future fixed minimum lease payments are as follows:



(in thousands)	Unrelated Parties			Related Parties			Total
Fiscal 2020	$	214,533		$	8,574		$	223,107
Fiscal 2021	222,936			8,697			231,633
Fiscal 2022	189,534			7,418			196,952
Fiscal 2023	150,003			4,573			154,576
Fiscal 2024	111,490			4,139			115,629
Future fiscal years thereafter	232,644			11,353			243,997
	1,121,140			44,754			1,165,894
Less discounting impact on operating leases	(127,431		)	(5,184		)	(132,615		)
Total operating lease liabilities	993,709			39,570			1,033,279
Less current operating lease liabilities	(179,548		)	(7,147		)	(186,695		)
Non-current operating lease liabilities	$	814,161		$	32,423		$	846,584

As of February 1, 2020, we have entered into lease commitments for eleven new store locations and one store relocation where the leases have not yet commenced, and therefore the lease liabilities have not yet been recorded. We expect the lease commencement to begin in the next fiscal quarter for these locations and we will record additional operating lease liabilities of approximately $20.1 million.

As of February 2, 2019, future minimum lease payment requirements, excluding contingent rental payments, maintenance, insurance, real estate taxes, and the amortization of deferred rent and construction and tenant allowances, consisted of the following, as determined prior to the adoption of ASU 2016-02:



(in thousands)	Unrelated Parties		Related Parties		Total
Fiscal 2019	$	233,237	$	9,425	$	242,662
Fiscal 2020	227,001		9,364		236,365
Fiscal 2021	204,803		8,697		213,500
Fiscal 2022	170,030		6,518		176,548
Fiscal 2023	131,594		1,874		133,468
Future fiscal years thereafter	298,437		5,596		304,033
	$	1,265,102	$	41,474	$	1,306,576