Leases

12 Months Ended

Jan. 30, 2021

The Company currently leases all but two of its store locations with original, non-cancelable terms that in general range from three to ten years. Store leases typically contain provisions for three to four renewal options of five years each. The exercise of lease renewal options is at the sole discretion of the Company. Most store leases also provide for minimum annual rentals and for payment of variable lease costs. In addition, some store leases also have provisions for additional rent based on a percentage of sales (“percentage rent”) and others include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual guarantees or material restrictive covenants. The Company does not have any financing leases.

The Company leases ten distribution/warehouse facilities. All of these contain renewal provisions, except for the third-party warehouse in Shafter, California. The following table summarizes the location and expiration date of the Company’s leased warehouses:


Location			Lease Expiration Date
Leased Distribution/Warehouse Facilities
Moreno Valley, California1			2023
Moreno Valley, California1			2029
Shafter, California			2029
Shafter, California1			2021
Las Vegas, Nevada			2025
Carlisle, Pennsylvania			2022
Carlisle, Pennsylvania			2021
Fort Mill, South Carolina			2024
Fort Mill, South Carolina			2023
Rock Hill, South Carolina			2028

1 Operated by a third party.

The Company leases approximately 120,000 and 5,000 square feet of office space for its Los Angeles and Boston buying offices, respectively. The lease term for both of these facilities expire in 2022, and contain renewal provisions. In addition, the Company has a ground lease related to its New York buying office.

The following table presents net operating lease costs included in the Consolidated Statement of Earnings for fiscal 2020 and 2019:


($000)	2020		2019
Operating lease cost1	$	669,339	$	639,545
Variable lease costs2	172,036		174,438
Net lease cost3	$	841,375	$	813,983

1 Net of sublease income which was immaterial.
2 Includes property and rent taxes, insurance, common area maintenance, and percentage rent. Fiscal 2020 also includes rent abatements negotiated due to the COVID-19 pandemic.
3 Excludes short-term lease costs which were immaterial.

The maturity of operating lease liabilities, including the ground lease related to the New York buying office as of January 30, 2021, are as follows:


($000)	Operating Leases1
2021	$	634,496
2022	659,045
2023	575,018
2024	466,458
2025	361,659
Thereafter	1,551,616
Total lease payments	$	4,248,292
Less: interest	1,028,578
Present value of lease liabilities	$	3,219,714
Less: current operating lease liabilities	598,120
Non-current operating lease liabilities	$	2,621,594

1 Operating leases exclude $188.7 million of minimum lease payments for leases signed that have not yet commenced.

The weighted-average remaining lease term and the weighted-average discount rate for operating leases as of January 30, 2021 and February 1, 2020 are as follows:


	2020		2019
Weighted-average remaining lease term (years):
Including the long-term ground lease related to the New York buying office	10.4		10.7
Excluding the long-term ground lease related to the New York buying office	5.9		6.1

Weighted-average discount rate:
Including the long-term ground lease related to the New York buying office	3.4	%	3.5	%
Excluding the long-term ground lease related to the New York buying office	3.0	%	3.1	%

The following table presents cash paid for amounts included in the measurement of operating lease liabilities and operating lease assets obtained in exchange for new operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) for fiscal 2020 and 2019:


($000)	2020		2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	554,620	$	608,565
Operating lease assets obtained in exchange for new operating lease liabilities1	$	610,552	$	739,326

1 Includes new leases and remeasurements or modifications of existing leases.

Rent expense under ASC 840, including contingent rent and net of sublease income, was $569.8 million in fiscal 2018. Contingent rent and sublease income was not significant in fiscal 2018.