Leases

9 Months Ended

Nov. 30, 2019

Leases

Leases

12. Leases

The Company leases most of its retail stores and certain distribution facilities under noncancellable operating and capital leases, most of which have initial lease terms ranging from 5 to 22 years. The Company also leases certain of its equipment and other assets under noncancellable operating leases with initial terms ranging from 3 to 10 years. In addition to minimum rental payments, certain store leases require additional payments based on sales volume, as well as reimbursements for taxes, maintenance and insurance. Most leases contain renewal options, certain of which involve rent increases.

The following table is a summary of the Company’s components of net lease cost for the thirteen and thirty-nine week periods ended November 30, 2019:

	Thirteen Week Period		Thirty-Nine Week Period
	Ended November 30, 2019		Ended November 30, 2019
Operating lease cost	$	163,035	$	492,020
Financing lease cost:
Amortization of right-of-use asset		1,419		4,463
Interest on long-term finance lease liabilities		775		2,536
Total finance lease costs	$	2,194	$	6,999
Short-term lease costs		445		561
Variable lease costs		42,723		126,037
Less: sublease income		(5,195)		(16,353)
Net lease cost	$	203,202	$	609,264

Supplemental cash flow information related to leases for the thirty-nine week period ended November 30, 2019:

	Thirty-Nine Week Period
	Ended November 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	469,207
Operating cash flows paid for interest portion of finance leases		2,536
Financing cash flows paid for principal portion of finance leases		4,939
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		265,612
Finance leases		—

Supplemental balance sheet information related to leases as of November 30, 2019 (in thousands, except lease term and discount rate):

	November 30,
	2019
Operating leases:
Operating lease right-of-use asset	$	2,935,104
Short-term operating lease liabilities	$	493,699
Long-term operating lease liabilities		2,732,339
Total operating lease liabilities	$	3,226,038
Finance leases:
Property, plant and equipment, net	$	20,843
Current maturities of long-term debt and lease financing obligations	$	9,486
Lease financing obligations, less current maturities		20,607
Total finance lease liabilities	$	30,093
Weighted average remaining lease term
Operating leases		7.9
Finance leases		8.8
Weighted average discount rate
Operating leases		5.9	%
Finance leases		10.1	%

The following table summarizes the maturity of lease liabilities under finance and operating leases as of November 30, 2019:

	November 30, 2019
	Finance		Operating
Fiscal year	Leases		Leases (1)		Total
2020 (remaining thirteen weeks)	$	6,340	$	172,032	$	178,372
2021		10,082		654,569		664,651
2022		4,191		594,498		598,689
2023		3,897		538,707		542,604
2024		3,655		475,406		479,061
Thereafter		17,765		1,644,650		1,662,415
Total lease payments		45,930		4,079,862		4,125,792
Less: imputed interest		(15,837)		(853,824)		(869,661)
Total lease liabilities	$	30,093	$	3,226,038	$	3,256,131

(1) – Future operating lease payments have not been reduced by minimum sublease rentals of $50 million due in the future under noncancelable leases.

Following are the minimum lease payments for all properties under a lease agreement that will have to be made in each of the years indicated based on noncancelable leases in effect as of March 2, 2019:

	Lease
	Financing		Operating
Fiscal year	Obligations		Leases
2020	$	19,300	$	687,412
2021		4,811		610,874
2022		4,588		545,863
2023		4,383		490,864
2024		4,042		431,714
Later years		20,470		1,541,408
Total minimum lease payments		57,594	$	4,308,135
Amount representing interest		(17,418)
Present value of minimum lease payments	$	40,176

During the thirteen and thirty-nine week periods ended November 30, 2019 and December 1, 2018, the Company did not enter into any sale-leaseback transactions whereby the Company sold owned operating stores to independent third parties and concurrent with the sale, entered into an agreement to lease the store back from the purchasers.