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LEASES
 6 Months Ended
Feb. 01, 2020
Leases [Abstract]  
LEASES NOTE 11—LEASES

The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease assets and liabilities are as follows (in thousands):
Lease Type
 
Balance Sheet Location
 
February 1, 2020
Operating lease assets
 
Operating lease assets
 
$
1,061,946

Finance lease assets
 
Property and equipment, net
 
56,242

Total lease assets
 
 
 
$
1,118,188

 
 
 
 
 
Operating liabilities
 
Current portion of operating lease liabilities
 
$
131,315

Finance liabilities
 
Current portion of long-term debt and finance lease liabilities
 
13,373

Operating liabilities
 
Long-term operating lease liabilities
 
967,933

Finance liabilities
 
Long-term finance lease liabilities
 
56,799

Total lease liabilities
 
 
 
$
1,169,420



The Company's lease cost under ASC 842 for the 13-week and 26-week periods ended February 1, 2020 is as follows:
(in thousands)
 
Statement of Operations Location
 
13-Week Period Ended
 
26-Week Period Ended
 
February 1, 2020
 
February 1, 2020
Operating lease cost
 
Operating expenses(2)
 
$
66,263

 
$
133,404

Short-term lease cost
 
Operating expenses
 
1,475

 
11,989

Variable lease cost
 
Operating expenses(2)
 
43,951

 
78,907

Sublease income
 
Operating expenses(2)
 
(12,258
)
 
(23,198
)
Sublease income
 
Net sales
 
(5,912
)
 
(10,747
)
Net operating lease cost(1)
 
 
 
93,519

 
190,355

Amortization of leased assets
 
Operating expenses
 
3,693

 
8,396

Interest on lease liabilities
 
Interest expense, net
 
1,899

 
4,017

Finance lease cost
 
 
 
$
5,592

 
12,413

Total net lease cost
 
 
 
$
99,111

 
$
202,768

(1)
Rent expense as presented here includes $11.9 million and $24.4 million in the second quarter and year-to-date of fiscal 2020, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations.
(2)
Includes certain lease expense or income that is recorded within Restructuring, acquisition and integration related expenses for surplus, non-operating properties for which the Company is restructuring its obligations and which are not separately material.

The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases have not been reduced for future minimum lease and subtenant rentals (“Lease Receipts”) under certain operating subleases, including lease assignments for stores sold to third parties, which they operate. As of February 1, 2020, these lease obligations and lease receipts consisted of the following (in thousands):
Maturity of Lease Liabilities and Lease Receipts
Lease Liabilities
 
Lease Receipts
 
Net Lease Obligations
Fiscal Year
Operating Leases(1)
 
Finance Leases(2)
 
Operating Leases
 
Finance Leases
 
Operating Leases
 
Finance Leases
Remaining fiscal 2020
$
129,751

 
$
11,346

 
$
(30,660
)
 
$
(40
)
 
$
99,091

 
$
11,306

2021
221,930

 
17,241

 
(52,039
)
 


 
169,891

 
17,241

2022
211,515

 
16,185

 
(46,847
)
 


 
164,668

 
16,185

2023
184,300

 
15,292

 
(36,032
)
 


 
148,268

 
15,292

2024
157,651

 
14,228

 
(27,894
)
 


 
129,757

 
14,228

Thereafter
1,078,576

 
15,530

 
(62,525
)
 


 
1,016,051

 
15,530

Total undiscounted lease liabilities and receipts
$
1,983,723

 
$
89,822

 
$
(255,997
)
 
$
(40
)
 
$
1,727,726

 
$
89,782

Less interest (3)
(884,475
)
 
(19,650
)
 
 
 
 
 
 
 
 
Present value of lease liabilities
1,099,248

 
70,172

 
 
 
 
 
 
 
 
Less current lease liabilities
(131,315
)
 
(13,373
)
 
 
 
 
 
 
 
 
Long-term lease liabilities
$
967,933

 
$
56,799

 
 
 
 
 
 
 
 
(1)
Operating lease payments include $14.5 million related to extension options that are reasonably certain of being exercised and exclude $10.8 million of legally binding minimum lease payments for leases signed but not yet commenced.
(2)
Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.0 million of legally binding minimum lease payments for leases signed but not yet commenced.
(3)
Calculated using the interest rate for each lease.

As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands):

 
 
Lease Obligations
 
Lease Receipts
 
Net Lease Obligations
Fiscal Year
 
Operating Leases
 
Capital Leases
 
Operating Leases
 
Capital Leases
 
Operating Leases
 
Capital Leases
2020
 
$
223,612

 
$
41,550

 
$
(55,922
)
 
$
(319
)
 
$
167,690

 
$
41,231

2021
 
190,845

 
32,804

 
(41,425
)
 
—

 
149,420

 
32,804

2022
 
179,326

 
29,869

 
(35,998
)
 
—

 
143,328

 
29,869

2023
 
154,812

 
26,699

 
(25,591
)
 
—

 
129,221

 
26,699

2024
 
135,795

 
23,095

 
(18,183
)
 
—

 
117,612

 
23,095

Thereafter
 
1,063,674

 
46,999

 
(59,186
)
 
—

 
1,004,488

 
46,999

Total future minimum obligations (receipts)
 
$
1,948,064

 
$
201,016

 
$
(236,305
)
 
$
(319
)
 
$
1,711,759

 
$
200,697

Less interest
 
 
 
(68,138
)
 
 
 
 
 
 
 
 
Present value of capital lease obligations
 
 
 
132,878

 
 
 
 
 
 
 
 
Less current capital lease obligations
 
 
 
(24,670
)
 
 
 
 
 
 
 
 
Long-term capital lease obligations
 
 
 
$
108,208

 
 
 
 
 
 
 
 


The following tables provide other information required by ASC 842:
Lease Term and Discount Rate
 
February 1, 2020
Weighted-average remaining lease term (years)
 
 
Operating leases
 
10.9 years

Finance leases
 
5.2 years

Weighted-average discount rate
 
 
Operating leases
 
10.7
%
Finance leases
 
9.9
%

Other Information
 
26-Week Period Ended
(in thousands)
 
February 1, 2020
Cash paid for amounts included in the measurement of lease liabilities
 
 
Operating cash flows from operating leases
 
110,221

Operating cash flows from finance leases
 
3,568

Financing cash flows from finance leases
 
6,135

Leased assets obtained in exchange for new finance lease liabilities
 
—

Leased assets obtained in exchange for new operating lease liabilities
 
121,455