Lease Accounting Lease Accounting (Tables)

6 Months Ended

Aug. 03, 2019

As of August 3, 2019, the components of leases and lease costs are as follows (in thousands):



	Balance Sheet Location	Aug 3, 2019
Assets
Operating	Operating lease right-of-use assets	$	900,062
Finance	Property and equipment, net	17,402
Total lease assets		$	917,464

Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	213,912
Finance	Current portion of borrowings and finance lease obligations	2,465
Noncurrent:
Operating	Long-term operating lease liabilities	747,791
Finance	Long-term debt and finance lease obligations, net	15,618
Total lease liabilities		$	979,786

Lease cost

Other supplemental information as of August 3, 2019 is as follows (dollars in thousands):



Lease Term and Discount Rate	Aug 3, 2019
Weighted-average remaining lease term (years)
Operating leases	6.0 years
Finance leases	6.8 years
Weighted-average discount rate
Operating leases	3.6%
Finance leases	7.1%



Supplemental Cash Flow Information	Six Months Ended Aug 3, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	124,687
New operating ROU assets obtained in exchange for lease liabilities	$	99,951



	Income Statement Location	Three Months Ended Aug 3, 2019		Six Months Ended Aug 3, 2019
Operating lease costs¹	Cost of product sales	$	58,749	$	117,565
Operating lease costs¹	Selling, general and administrative expenses	5,720		10,984
Finance lease costs
Amortization of leased assets²	Cost of product sales	44		87
Amortization of leased assets²	Selling, general and administrative expenses	637		1,180
Interest on lease liabilities	Interest expense	286		573
Variable lease costs¹	Cost of product sales	25,083		49,908
Variable lease costs¹	Selling, general and administrative expenses	628		1,455
Short-term lease costs¹	Selling, general and administrative expenses	183		395
Total lease costs		$	91,330	$	182,147

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Notes:

Rental expense for all property and equipment operating leases during the three and six months ended August 4, 2018 aggregated $70.6 million and $142.8 million, respectively, including percentage rent of $15.5 million and $31.9 million, respectively. During the three and six months ended August 4, 2018, the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $16.4 million and $31.3 million, respectively, related to its operating leases.

Amortization of leased assets related to finance leases are included in depreciation expense in the Company’s condensed consolidated statements of income.

Operating lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2020¹	$	131,202	$	1,825	$	133,027
2021	201,770		3,342		205,112
2022	189,492		3,646		193,138
2023	158,132		3,255		161,387
2024	132,342		3,092		135,434
After 2024	255,194		7,577		262,771
Total lease payments	1,068,132		22,737		1,090,869
Less: Interest	106,429		4,654		111,083
Present value of lease liabilities	$	961,703	$	18,083	$	979,786

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Notes:

Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019.

Finance lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of August 3, 2019 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2020¹	$	131,202	$	1,825	$	133,027
2021	201,770		3,342		205,112
2022	189,492		3,646		193,138
2023	158,132		3,255		161,387
2024	132,342		3,092		135,434
After 2024	255,194		7,577		262,771
Total lease payments	1,068,132		22,737		1,090,869
Less: Interest	106,429		4,654		111,083
Present value of lease liabilities	$	961,703	$	18,083	$	979,786

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Notes:

Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the six months ended August 3, 2019.