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.

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 February 3, 2024, January 28, 2023 and January 29, 2022.


(In thousands)	Fiscal 2024			Fiscal 2023			Fiscal 2022
Operating lease cost	$	164,355		$	166,617		$	174,127
Variable lease cost		14,582			16,966			21,540
Less: Sublease income		(173	)		(314	)		(246	)
Net Lease Cost	$	178,764		$	183,269		$	195,421

The following table reconciles the maturities of undiscounted cash flows to our operating lease liabilities recorded on the Consolidated Balance Sheets at February 3, 2024:


Fiscal Years	(In thousands)
2025	$	152,087
2026		125,851
2027		94,128
2028		57,240
2029		35,180
Thereafter		102,440
Total undiscounted future minimum lease payments		566,926
Less: Amounts representing interest		(78,663	)
Total Present Value of Operating Lease Liabilities	$	488,263

Our weighted-average remaining lease term and weighted-average discount rate for operating leases as of February 3, 2024 and January 28, 2023 are:


	February 3, 2024	January 28, 2023
Weighted-average remaining lease term (years)	5.5 years	5.5 years
Weighted-average discount rate	5.3%	5.1%

As of February 3, 2024, we have additional operating leases that have not yet commenced with estimated right of use liabilities of $10.5 million. These leases will commence in Fiscal 2025 with lease terms of 1 to 10 years.

COVID-19 related lease concessions decreased our contractual rent expense by approximately $17 million during Fiscal 2022.