(1)	Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the consolidated statements of income based on our accounting policy. Refer to Note 3—Significant Accounting Policies.

(2)	Included in interest expense—net on the consolidated statements of income.

(3)

Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $19 million, $28 million and $13 million in fiscal 2022, fiscal 2021 and fiscal 2020, respectively, as well as charges associated with common area maintenance of $9.3 million, $8.8 million and $7.1 million in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in any period presented.

(4)	Included in selling, general and administrative expenses on the consolidated statements of income.

Lease right-of-use assets and lease liabilities consist of the following:


		JANUARY 28,		JANUARY 29,
		2023		2022

		(in thousands)
	Balance Sheet Classification
Assets
Operating leases	Operating lease right-of-use assets	$	527,246	$	551,045
Finance leases^(1)(2)(3)	Property and equipment—net		1,078,979		784,327
Total lease right-of-use assets		$	1,606,225	$	1,335,372
Liabilities
Current⁽⁴⁾
Operating leases	Operating lease liabilities	$	80,384	$	73,834
Finance leases	Other current liabilities		17,007		15,511
Total lease liabilities—current			97,391		89,345
Non-current
Operating leases	Non-current operating lease liabilities		505,809		540,513
Finance leases	Non-current finance lease liabilities		653,050		560,550
Total lease liabilities—non-current			1,158,859		1,101,063
Total lease liabilities		$	1,256,250	$	1,190,408

(1)	Includes capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.

(2)	Recorded net of accumulated amortization of $224 million and $174 million as of January 28, 2023 and January 29, 2022, respectively.

(3)	Includes $39 million and $41 million as of January 28, 2023 and January 29, 2022, respectively, related to an RH Design Gallery lease with a landlord that is an affiliate of the managing member of the Aspen LLCs (refer to Note 8—Variable Interest Entities).

(4)	Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.

The maturities of lease liabilities were as follows as of January 28, 2023:


	OPERATING		FINANCE
FISCAL YEAR	LEASES		LEASES		TOTAL

	(in thousands)
2023	$	102,197	$	49,590	$	151,787
2024		94,407		49,950		144,357
2025		90,470		51,365		141,835
2026		87,087		52,132		139,219
2027		81,751		53,273		135,024
Thereafter		241,717		963,327		1,205,044
Total lease payments⁽¹⁾⁽²⁾		697,629		1,219,637		1,917,266
Less—imputed interest⁽³⁾		(111,436)		(549,580)		(661,016)
Present value of lease liabilities	$	586,193	$	670,057	$	1,256,250

(1)

Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $663 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of January 28, 2023, of which $28 million, $38 million, $42 million, $42 million and $40 million will be paid in fiscal 2023, fiscal 2024, fiscal 2025, fiscal 2026 and fiscal 2027, respectively, and $473 million will be paid subsequent to fiscal 2027.

(2)	Excludes an immaterial amount of future commitments under short-term lease agreements as of January 28, 2023.

(3)	Calculated using the discount rate for each lease at lease commencement.

Supplemental information related to leases consists of the following:


	YEAR ENDED
	JANUARY 28,		JANUARY 29,
	2023		2022
Weighted-average remaining lease term (years)
Operating leases		8.3		9.1
Finance leases		21.9		20.0
Weighted-average discount rate
Operating leases		4.08%		3.94%
Finance leases		5.32%		4.96%

Other information related to leases consists of the following:


	YEAR ENDED
	JANUARY 28,		JANUARY 29,		JANUARY 30,
	2023		2022		2021

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(101,513)	$	(102,097)	$	(75,794)
Operating cash flows from finance leases		(32,090)		(26,775)		(20,839)
Financing cash flows from finance leases—net⁽¹⁾		(10,146)		(14,158)		(12,498)
Total cash outflows from leases	$	(143,749)	$	(143,030)	$	(109,131)
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash)
Operating leases	$	49,702	$	172,393	$	113,828
Finance leases		109,015		89,617		57,873

(1)	Represents the principal portion of finance lease payments offset by tenant allowances received subsequent to lease commencement of $4.7 million in fiscal 2022. No such tenant allowances were received in fiscal 2021 or fiscal 2020.

Build-to-Suit Asset

During fiscal 2021, we opened the Dallas Design Gallery. During the construction period of this Design Gallery, we were the “deemed owner” for accounting purposes and classified the construction costs as build-to-suit asset within property and equipment—net on our consolidated balance sheets. Upon construction completion and lease commencement, we performed a sale-leaseback analysis and determined that we cannot derecognize the build-to-suit asset. Therefore, the asset remains classified as a build-to-suit asset within property and equipment—net and is depreciated over the term of the useful life of the asset.

Sale-Leaseback Transaction

During fiscal 2020, we executed a sale-leaseback transaction for the Minneapolis Design Gallery for sales proceeds of $26 million, which qualified for sale-leaseback accounting in accordance with ASC 842. Concurrently with the sale, we entered into an operating leaseback arrangement with an initial lease term of 20 years and a renewal option for an additional 10 years. We recognized a loss related to the execution of the sale transaction of $9.4 million in fiscal 2020, which was recorded in selling, general and administrative expenses on the consolidated statements of income.