|12 Months Ended|
Jan. 30, 2021
We lease our retail store locations, distribution centers, office facilities and certain equipment under non-cancelable operating leases. Substantially all store leases have initial lease terms of approximately 10 years, the majority of which provide for one or more five-year . The exercise of lease renewal options is at the Company’s sole discretion. We include the lease renewal option periods in the calculation of our operating lease assets and liabilities when it is reasonably certain that we will renew the lease.
Our operating lease assets represent our right to use an underlying asset for the lease term and our operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The commencement date is the earlier of the date when we become legally obligated for the rent payments or the date when we take possession of the building for construction purposes. In addition, operating lease assets are net of lease incentives received. As our leases do not contain an implicit rate of return, we use our estimated incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. For operating leases that commenced prior to the adoption date of the new lease accounting standard, we used the incremental borrowing rate as of the adoption date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. In fiscal 2020, we began negotiating certain rent concessions with our landlords, which consists primarily of rent abatements, to mitigate the economic effects of the COVID-19 pandemic. As of January 30, 2021, we received approximately $25 million primarily related to rent abatements that are included in our straight-line rent calculation.
We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Our short-term non-real estate leases, which have a non-cancelable lease term of less than one year, are not included in the operating lease assets or liabilities. Short-term lease expense is recognized on a straight-line basis over the lease term.
The components of lease costs are as follows (in thousands):
Additional information related to our operating leases is as follows (in thousands, except weighted-average data):
Maturities of our lease liabilities are as follows as of January 30, 2021 (in thousands):
Lease payments exclude $16.6 million related to 5 leases that have been signed as of January 30, 2021 but have not yet commenced.
Rent Commitments Under Previous Lease Accounting Standard
Future minimum annual rental commitments for all non-cancelable operating leases as of February 2, 2019 are as follows (in thousands):
Rent expense applicable to non-cancelable operating leases was $423.8 million in fiscal 2018.
The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef