Leases - Notes to the Financial Statements

3 Months Ended

May 04, 2019

Operating Lease Dislcosure Leasee [Text Block]

NOTE 12 – LEASES:

We determine whether an arrangement is a lease at inception. We have operating leases for stores, offices and equipment. Our leases have remaining lease terms of one year to 10 years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date of the lease in determining the present value of lease payments.

The components of lease cost are shown below (in thousands):

	Three Months Ended
		May 4, 2019

Operating lease cost (a)	$	9,732
Variable lease cost (b)	$	606
ASC 840 prepaid rent expense (c)	$	5,975

(a) Includes right-of-use asset amortization of ($2) million.
(b) Primarily related to monthly percentage rent for stores not presented on the balance sheet.
(c) Related to ASC 840 rent expense due to prepaid rent on the balance sheet as of February 3, 2019.

Supplemental cash flow information and non-cash activity related to our operating leases are as follows (in thousands):

Operating cash flow information:

	Three Months Ended
		May 4, 2019

Cash paid for amounts included in the measurement of lease liabilties	$	10,091
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	282

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

	May 4, 2019

Weighted-average remaining lease term	3.2 years
Weighted-average discount rate	4.65%

Maturities of lease liabilities by fiscal year for our operating leases are as follows (in thousands):

Fiscal Year

2019 (a)	$	51,673
2020		56,338
2021		41,823
2022		27,095
2023		18,438
Thereafter		17,614
Total lease payments		212,981
Less: Imputed interest		21,267
Present value of lease liabilities	$	191,714

(a) Excluding the 3 months ended May 4, 2019.

As of February 2, 2019, the minimum rental commitments under non-cancelable operating leases are (in thousands):


Fiscal Year

2019	$	69,601
2020		51,943
2021		35,196
2022		21,242
2023		12,986
Thereafter		2,643
Total minimum lease payments	$	193,611

A summary of rent expense for the fiscal years ended February 2, 2019 and February 3, 2018 was as follows (in thousands):

	Balance as of
		February 2, 2019		February 3, 2018

Rent Expense	$	69,872	$	70,971