We lease our office space and all of our retail store locations, transportation equipment and other equipment under various noncancelable operating leases. The leases have varying terms and expire at various dates through 2037. The store leases in the United States, Puerto Rico and Canada typically have initial terms of approximately 10 years. The store leases in the U.K. and the ROI typically have initial terms of between 10 and 15 years. Our lease portfolio includes leases with fixed base rental payments, rental payments based on a percentage of retail sales over contractual amounts and others with predetermined fixed escalations of the minimum rentals based on a defined consumer price index or percentage. Generally, most of the leases require us to pay taxes, insurance, maintenance costs and contingent rentals based on sales. We evaluate renewal options and break options at lease inception and on an ongoing basis, and include renewal options and break options that we are reasonably certain to exercise in our expected lease terms for calculations of our right-of-use assets and liabilities. Approximately 3% of our leases contain renewal options. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

On February 10, 2020, we announced plans for our new corporate headquarters in Nashville, Tennessee. We entered into a lease agreement, which was subsequently amended, for approximately 182,000 square feet of office space which replaced our previous corporate headquarters office lease. The term of the lease is 15 years, with two options to extend for an additional period of five years each. We moved to the new corporate headquarters beginning in April 2022.

Under ASC 842, for store, office and equipment leases beginning in Fiscal 2020 and later, we have elected to not separate fixed lease components and non-lease components. Accordingly, we include fixed rental payments, common area maintenance costs, promotional advertising costs and other fixed costs in our measurement of lease liabilities.

Our leases do not provide an implicit rate, so the incremental borrowing rate, based on the information available at commencement or modification date, is used in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, we used the incremental borrowing rate that corresponded to the initial lease term as of the date of adoption.

Net lease costs are included within selling and administrative expenses on the Consolidated Statements of Operations. The table below presents the components of lease cost for operating leases for the years ended January 28, 2023, January 29, 2022 and January 30, 2021.


(In thousands)	Fiscal 2023			Fiscal 2022			Fiscal 2021
Operating lease cost	$	166,617		$	174,127		$	160,973
Variable lease cost		16,966			21,540			9,562
Less: Sublease income		(314	)		(246	)		(165	)
Net Lease Cost	$	183,269		$	195,421		$	170,370

The following table reconciles the maturities of undiscounted cash flows to our operating lease liabilities recorded on the Consolidated Balance Sheets at January 28, 2023:


Fiscal Years	(In thousands)
2024	$	156,304
2025		128,634
2026		105,033
2027		77,331
2028		44,781
Thereafter		103,100
Total undiscounted future minimum lease payments		615,183
Less: Amounts representing interest		(79,611	)
Total Present Value of Operating Lease Liabilities	$	535,572

Our weighted-average remaining lease term and weighted-average discount rate for operating leases as of January 28, 2023 and January 29, 2022 are:


	January 28, 2023	January 29, 2022
Weighted-average remaining lease term (years)	5.5 years	5.8 years
Weighted-average discount rate	5.1%	5.0%

As of January 28, 2023, we have additional operating leases that have not yet commenced with estimated right of use liabilities of $12.1 million. These leases will commence in Fiscal 2024 with lease terms of 1 to 10 years.

Beginning in March 2020, as a result of the onset of the COVID-19 pandemic, we suspended rent payments under the leases for our temporarily closed stores and initiated discussions with landlords to obtain lease concessions. We considered the FASB’s guidance regarding lease concessions as a result of the effects of the COVID-19 pandemic and elected to account for lease concessions related to the effects of the COVID-19 pandemic received in Fiscal 2022 and Fiscal 2021 consistent with how those concessions would be accounted for under Topic 842 and Topic 840 as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Also, in accordance with the FASB’s guidance, we applied this election for concessions related to the effects of the COVID-19 pandemic that did not result in a substantial increase in our obligations or in the rights of the landlord. We continued to recognize contractual rent expense while lease concessions were under negotiation with the respective landlord. The rent concessions were recognized in the period when the amendment was executed. COVID-19 related lease concessions decreased our contractual rent expense by approximately $17 million and $34 million during Fiscal 2022 and Fiscal 2021, respectively. As of January 29, 2022, we had an accrued liability for unpaid rent related to the closed stores of $2.1 million.