LEASES

6 Months Ended

Jun. 29, 2019

LEASES

We have operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to early terminate the lease.

As of June 29, 2019, the Company's finance leases were not material to the consolidated balance sheets, consolidated statements of operations or statement of cash flows.

The following components of lease expense are included in Selling, general and administrative expenses on the Company's consolidated statements of operations for the second quarter and two quarters of fiscal 2019:



	Fiscal quarter ended		Two fiscal quarters ended
(dollars in thousands)	June 29, 2019		June 29, 2019
Operating lease cost	$	44,688	$	87,907
Variable lease cost ^(*)	14,753		31,201
Net lease cost	$	59,441	$	119,108


(*)	Includes short-term leases, which are immaterial.

As of June 29, 2019, the weighted-average remaining operating lease term was 6.2 years and the weighted-average discount rate for operating leases was 4.45%.

Cash paid for amounts included in the measurement of operating lease liabilities in the second quarter and two quarters of fiscal 2019 was $47.9 million and $95.2 million, respectively.

As of June 29, 2019, the maturities of lease liabilities were as follows:



(dollars in thousands)	Operating leases
Remainder of 2019	$	95,860
2020	182,166
2021	164,884
2022	142,413
2023	117,871
After 2023	268,026
Total lease payments	$	971,220
Less: Interest	(127,851		)
Present value of lease liabilities(*)	$	843,369


(*)	As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We used the incremental borrowing rate on December 30, 2018, for operating leases that commenced prior to that date.

As of June 29, 2019, the minimum rental commitments for additional operating lease contracts that have not yet commenced, primarily for retail stores, is $33.9 million. These operating leases will commence between fiscal year 2019 and fiscal year 2023 with lease terms of 5 years to 10 years.

As of December 29, 2018, the minimum annual rental commitments under current non-cancellable operating leases were as follows:



(dollars in thousands)	Operating leases
2019	$	163,963
2020	150,010
2021	134,203
2022	116,773
2023	102,487
Thereafter	235,731
Total	$	903,167