The Company’s leases primarily consist of stores, distribution facilities and office space under operating and finance leases that will expire principally during the next 30 years. The leases typically include renewal options at five-year intervals and escalation clauses. Lease renewals are only included in the lease liability to the extent that they are reasonably assured of being exercised. The Company’s leases typically provide for contingent rentals based on a percentage of gross sales. Contingent rentals are not included in the lease liability, and they are recognized as variable lease cost when incurred.

The following is a schedule of the Company’s future lease payments:


	(in thousands)
Fiscal Year	Operating Leases			Finance Leases
2024 (remainder)	$	100,447		$	869
2025		665,226			3,526
2026		625,286			3,640
2027		583,996			3,640
2028		535,944			3,447
Thereafter		1,954,979			20,787
Total future minimum lease payments		4,465,878			35,909
Amount representing interest		(939,922	)		(10,404	)
Total lease liabilities		3,525,956			25,505
Less: current portion of lease liabilities		(401,840	)		(2,168	)
Total long term lease liabilities	$	3,124,116		$	23,337

Weighted average discount rate	6.0%			5.5%
Weighted average remaining lease term (years)	7.8			12.2

The above schedule excludes approximately $525.1 million for 49 stores and one distribution center that the Company has committed to open or relocate but has not yet taken possession of the space. The discount rates used in valuing the Company’s leases are not readily determinable, and are based on the Company’s incremental borrowing rate on a fully collateralized basis.

The Company has entered into a lease agreement for a new distribution center in Ellabell, GA, which is expected to commence in Spring 2025. The Company does not have control of the asset during construction, but it is involved in the design and construction of the related asset. Additionally, the lease agreement has a purchase option, which can be exercised beginning after the earlier of (a) substantial completion of construction or (b) the date the Company commences business operations in the premises.

The following is a schedule of net lease costs for the periods indicated:


	(in thousands)
	Three Months Ended						Nine Months Ended
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
Finance lease cost:
Amortization of finance lease asset (a)	$	566		$	877		$	2,007		$	2,630
Interest on lease liabilities (b)		351			454			1,096			1,425
Operating lease cost (c)		158,211			147,270			466,239			427,072
Variable lease cost (c)		63,652			58,915			186,204			168,864
Total lease cost		222,780			207,516			655,546			599,991
Impairment (gain) on sale and leaseback transaction (d)		—			—			8,210			(1,958	)
Less all rental income (e)		(1,261	)		(1,383	)		(3,974	)		(4,224	)
Total net rent expense (f)	$	221,519		$	206,133		$	659,782		$	593,809

(a)

Included in the line item “Depreciation and amortization” in the Company’s Condensed Consolidated Statements of Income.

(b)

Included in the line item “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

(c)

Includes real estate taxes, common area maintenance, insurance and percentage rent. Included in the line item “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

(d)

Impairment included in the line item "Impairment charges - long-lived assets" and gain included in line item “Other income - net” in the Company’s Condensed Consolidated Statements of Income.

(e)

Included in the line item “Other revenue” in the Company’s Condensed Consolidated Statements of Income.

(f)

Excludes an immaterial amount of short-term lease cost.

Supplemental cash flow disclosures related to leases are as follows:


	(in thousands)
	Nine Months Ended
	November 2, 2024		October 28, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Cash payments arising from operating lease liabilities (a)	$	471,192	$	431,200
Cash payments for the principal portion of finance lease liabilities (b)	$	2,041	$	2,975
Cash payments for the interest portion of finance lease liabilities (a)	$	1,096	$	1,425
Supplemental non-cash information:
Operating lease liabilities arising from obtaining right-of-use assets	$	531,539	$	494,327

(a)

Included within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

(b)

Included within financing activities in the Company’s Condensed Consolidated Statements of Cash Flows.