Leases

6 Months Ended

Aug. 01, 2020

LEASES

We lease our stores, fulfillment center and other facilities under operating lease arrangements with unrelated parties and related parties owned by the 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 renewal options. We pay variable amounts for certain lease and non-lease components as well as for contingent rent 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 lease 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 condensed consolidated statements of operations.

Lease income and lease expense consisted of the following for the three and six months ended August 1, 2020 and August 3, 2019:


	Three months ended						Six months ended
(in thousands)	August 1, 2020		August 3, 2019		August 1, 2020		August 3, 2019
Operating lease income	$	3,034	$	2,236	$	6,197	$	4,448
Operating lease expense:
Lease expense to unrelated parties	$	51,162	$	52,707	$	104,390	$	106,061
Lease expense to related parties	2,270		2,371		4,657		4,713
Variable lease expense to unrelated parties	18,667		12,981		31,653		26,003
Variable lease expense to related parties	302		348		669		650
Total operating lease expense	$	72,401	$	68,407	$	141,369	$	137,427

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


(in thousands)	Unrelated Parties		Related Parties		Total
Remainder of fiscal 2020	$	133,406	$	4,624	$	138,030
Fiscal 2021	251,414		8,697		260,111
Fiscal 2022	196,176		7,418		203,594
Fiscal 2023	155,781		4,573		160,354
Fiscal 2024	115,788		4,139		119,927
Future fiscal years thereafter	236,332		11,353		247,685
	1,088,897		40,804		1,129,701
Less discounting impact on operating leases	(104,751)		(4,430)		(109,181)
Total operating lease liabilities	984,146		36,374		1,020,520
Less current operating lease liabilities	(233,834)		(7,860)		(241,694)
Non-current operating lease liabilities	$	750,312	$	28,514	$	778,826