The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases. The store leases typically have initial terms of 5 years to 10 years, with options that usually permit renewal for additional five-year periods. The initial term of the lease for the corporate headquarter was for 20 years, with the opportunity to extend for six additional successive periods of five years, beginning in fiscal 2026. The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years. The Company is generally obligated for the cost of property taxes, insurance and common area maintenance fees relating to its leases, which are considered variable lease costs and are expensed as incurred.

Due to the COVID-19 pandemic and all stores having to close temporarily, the Company held rent payments for the period of April through June 2020. During the second quarter of fiscal 2020, the Company received concessions with the majority of its landlords in the form of rent deferrals, abatements and, to a lesser extent, lease extensions. For the remainder of the leases, the outstanding lease payments were paid and the leases remain in good standing. ASC 842 requires the assessment of any lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied. Lease modification accounting requires the recalculation of the ROU asset, lease liability and lease expense over the respective lease term. In April 2020, the FASB issued guidance allowing entities to make a policy election to account for lease concessions related to the COVID-19 pandemic as though enforceable rights and obligations for those concessions existed. The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. The Company has opted not to elect this practical expedient and instead account for these rent concessions as lease modifications in accordance with ASC 842. As of October 31, 2020, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications, the majority of which were recorded in the second quarter of fiscal 2020.

The following table is a summary of the Company’s components of net lease cost for the third quarter and nine months ended October 31, 2020 and November 2, 2019:

	For the three months ended				For the nine months ended
	October 31, 2020		November 2, 2019		October 31, 2020		November 2, 2019
(in thousands)
Operating lease cost	$	11,824	$	13,500	$	35,756	$	39,968
Variable lease costs⁽¹⁾		3,690		4,201		10,759		12,200
Total lease costs	$	15,514	$	17,701	$	46,515	$	52,168

Supplemental cash flow and balance sheet information related to leases for the nine months ended October 31, 2020 and November 2, 2019 is as follows:


(dollars in thousands)	For the nine months ended
Cash paid for amounts included in the measurement of lease liabilities:	October 31, 2020			November 2, 2019
Operating cash flows for operating leases⁽¹⁾	$	33,233		$	43,633
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	645		$	3,245
Net decrease in right-of-use assets due to lease modifications associated with rent concessions and lease exits	$	(2,283	)	-

Weighted average remaining lease term	4.7 yrs.			5.5 yrs.
Weighted average discount rate	6.46%			7.12%

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the Consolidated Balance Sheet as of October 31, 2020:

(in thousands)
2020 (remaining)	$	13,026
2021		57,523
2022		49,322
2023		40,749
2024		30,517
Thereafter		37,403
Total minimum lease payments	$	228,540
Less: amount of lease payments representing interest		32,018
Present value of future minimum lease payments	$	196,522
Less: current obligations under leases		45,616
Long-term lease obligations	$	150,906