LEASES

3 Months Ended

Mar. 28, 2020

LEASES

We have operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company's leases generally have initial terms ranging from 1 year to 10 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 March 28, 2020, the Company's finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statements 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 first quarter of fiscal 2020 and 2019:



	Fiscal quarter ended
(dollars in thousands)	March 28, 2020		March 30, 2019
Operating lease cost	$	46,423	$	43,219
Variable lease cost ^(*)	16,285		16,448
Net lease cost	$	62,708	$	59,667


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

Supplemental balance sheet information related to leases was as follows:



	Fiscal quarter ended
	March 28, 2020	March 30, 2019
Weighted average remaining operating lease term (years)	5.9	6.3
Weighted average discount rate for operating leases	4.29%	4.48%

Supplemental cash flow information related to leases was as follows:



	Fiscal quarter ended
(dollars in thousands)	March 28, 2020		March 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	50,177	$	47,264
Non-cash transactions to recognize operating assets and liabilities for new operating leases	$	25,867	$	18,004

As of March 28, 2020, the maturities of lease liabilities were as follows:



(dollars in thousands)	Operating leases
Remainder of 2020	$	145,928
2021	180,686
2022	155,957
2023	129,375
2024	104,674
After 2024	202,811
Total lease payments	$	919,431
Less: Interest	(110,756		)
Present value of lease liabilities^(*)	$	808,675


(*)	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 March 28, 2020, the minimum rental commitments for additional operating lease contracts that have not yet commenced, primarily for retail stores, are $17.4 million. These operating leases will commence between fiscal year 2020 and fiscal year 2023 with lease terms of 6 years to 10 years.