The Company leases all of its retail locations, a manufacturing facility, and certain office locations, distribution centers and equipment. At contract inception, leases are evaluated and classified as either operating or finance leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

During the first quarter of 2019, the Company adopted ASC Topic 842, Leases (“ASC 842”), using the modified retrospective transition method. Prior period financial information in the consolidated financial statements has not been adjusted and is presented in compliance with ASC 840. The Company elected the package of practical expedients and the expedient to account for lease and non-lease components as a single component for the entire population of operating lease assets. The Company did not elect the hindsight practical expedient to reevaluate the lease term of existing contracts.

Lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The majority of the Company’s leases do not provide an implicit rate and therefore, the Company uses an incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred.

The Company regularly analyzes the results of all of its stores and assesses the viability of underperforming stores to determine whether events or circumstances exist that indicate the stores should be closed or whether the carrying amount of their long-lived assets may not be recoverable. After allowing for an appropriate start-up period, unusual nonrecurring events or favorable trends, property and equipment at stores and the lease right-of-use assets indicated as impaired are written down to fair value as calculated using a discounted cash flow method. The fair value of the lease right-of-use assets is determined utilizing projected cash flows for each store location, discounted using a risk-adjusted discount rate, subject to a market floor based on current market lease rates. The Company recorded asset impairment charges, primarily related to underperforming retail stores, of $56.3 million, $5.9 million and $3.7 million during 2020, 2019 and 2018, respectively. The impairment charges recorded in 2020, including $31.4 million associated with operating lease right-of-use assets and $24.9 million associated with property and equipment, primarily reflect the impact of the COVID-19 pandemic on the Company’s retail operations and estimates of remaining cash flows for each store, as well as the decision to close all but a few of the Company’s Naturalizer retail stores. Refer to Note 5 and Note 15 to the consolidated financial statements for further discussion on these impairment charges.

As a result of the temporary store closures during the first half of 2020 associated with the COVID-19 pandemic, the Company negotiated with landlords to modify payment terms for certain leases. Deferred payments for these leases are reflected in lease obligations on the consolidated balance sheets. As further discussed in Note 1 to the consolidated financial statements, under relief provided by the FASB, entities may make a policy election to account for the lease concessions related to COVID-19 as if the enforceable rights existed under the original contract, accounting for them as variable rent rather than lease modifications. The Company has made a policy election to account for lease concessions related to COVID-19 as variable rent. Accordingly, in 2020 the Company recorded $5.4 million in lease concessions as a reduction of rent expense within selling and administrative expenses in the consolidated statements of earnings (loss). Rent deferrals for leases that were extended in connection with the rent concession will continue to be recognized consistent with the original lease agreement.

The weighted-average lease term and discount rate as of January 30, 2021 and February 1, 2020 were as follows:

During 2020, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $88.5 million on the consolidated balance sheets. As of January 30, 2021, the Company has entered into lease commitments for six retail locations for which the leases have not yet commenced. The Company anticipates that the leases for five of the new retail locations will begin in the next fiscal year and one will begin in fiscal year 2022. Upon commencement, right-of-use assets and lease liabilities of approximately $4.5 million and $0.5 million will be recorded on the consolidated balance sheets, in 2021 and 2022, respectively.

(1)	Net of lease concessions recognized of $5.4 million.

The aggregate future annual lease obligations at January 30, 2021 were as follows:


($ thousands)
2021	$	176,902
2022		137,151
2023		108,201
2024		86,114
2025		66,566
Thereafter		201,925
Total minimum operating lease payments	$	776,859
Less imputed interest		(104,857)
Present value of lease obligations	$	672,002

Supplemental cash flow information related to leases is as follows:


($ thousands)	2020		2019
Cash paid for lease liabilities	$	145,552	$	196,033
Cash received from sublease income		96		269

As previously reported in accordance with the guidance in ASC 840, a summary of rent expense for operating leases for 2018 is as follows:


($ thousands)	2018
Minimum rent	$	171,410
Contingent rent		671
Sublease income		(428)
Total	$	171,653