Leases

3 Months Ended

May 30, 2020

Leases

Leases

12. Leases

The Company leases most of its retail stores and certain distribution facilities under noncancelable operating and finance 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 noncancelable 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 week periods ended May 30, 2020 and June 1, 2019:

	Thirteen Week Period Ended
	May 30, 2020		June 1, 2019
Operating lease cost	$	161,866	$	164,983
Financing lease cost:
Amortization of right-of-use asset		1,131		1,536
Interest on long-term finance lease liabilities		689		905
Total finance lease costs	$	1,820	$	2,441
Short-term lease costs		153		1
Variable lease costs		42,448		40,545
Less: sublease income		(4,132)		(5,751)
Net lease cost	$	202,155	$	202,219

Supplemental cash flow information related to leases for the thirteen week periods ended May 30, 2020 and June 1, 2019:

	Thirteen Week Period Ended
	May 30, 2020		June 1, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	170,370	$	176,237
Operating cash flows paid for interest portion of finance leases		689		905
Financing cash flows paid for principal portion of finance leases		1,243		3,490
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		107,913		77,384
Finance leases		—		—

Supplemental balance sheet information related to leases as of May 30, 2020 and February 29, 2020 (in thousands, except lease term and discount rate):

	May 30,			February 29,
	2020			2020
Operating leases:
Operating lease right-of-use asset	$	2,894,333		$	2,903,256
Short-term operating lease liabilities	$	490,202		$	490,161
Long-term operating lease liabilities		2,694,929			2,710,347
Total operating lease liabilities	$	3,185,131		$	3,200,508
Finance leases:
Property, plant and equipment, net	$	18,533		$	19,904
Current maturities of long-term debt and lease financing obligations	$	8,066		$	8,840
Lease financing obligations, less current maturities		18,590			19,326
Total finance lease liabilities	$	26,656		$	28,166
Weighted average remaining lease term
Operating leases		7.7			7.8
Finance leases		9.0			8.9
Weighted average discount rate
Operating leases		6.1	%		6.1	%
Finance leases		10.4	%		10.2	%

The following table summarizes the maturity of lease liabilities under finance and operating leases as of May 30, 2020:

	May 30, 2020
	Finance		Operating
Fiscal year	Leases		Leases (1)		Total
2021 (remaining thirty-nine weeks)	$	10,225	$	500,821	$	511,046
2022		4,078		625,642		629,720
2023		3,876		573,793		577,669
2024		3,597		512,399		515,996
2025		3,280		414,314		417,594
Thereafter		15,914		1,382,115		1,398,029
Total lease payments		40,970		4,009,084		4,050,054
Less: imputed interest		(14,314)		(823,953)		(838,267)
Total lease liabilities	$	26,656	$	3,185,131	$	3,211,787

(1) – Future operating lease payments have not been reduced by minimum sublease rentals of $44 million due in the future under noncancelable leases.

During the thirteen week periods ended May 30, 2020 and June 1, 2019, 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.