|6 Months Ended|
Aug. 01, 2020
The Company leases certain property and equipment, such as transmission and production equipment, satellite transponder and office equipment. The Company also leases office space used by its Emerging segment's Float Left and retail space used by its Emerging segment retailer, J.W. Hulme. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on accompanying condensed consolidated balance sheets.
Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities and right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Some of the Company's leases include options to extend the term, which is only included in the lease liability and right-of-use assets calculation when it is reasonably certain the Company will exercise that option. As of August 1, 2020, the lease liability and right-of-use assets did not include any lease extension options.
The Company has lease agreements with lease and non-lease components, and has elected to account for these as a single lease component. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The components of lease expense were as follows:
(a) Includes variable costs of finance leases.
For the three-month periods ended August 1, 2020 and August 3, 2019, finance lease costs included amortization of right-of-use assets of $25,000 and $21,000 and interest on lease liabilities of $1,000 and $2,000. For the six-month periods ended August 1, 2020 and August 3, 2019, finance lease costs included amortization of right-of-use assets of $50,000 and $24,000 and interest on lease liabilities of $3,000 and $3,000.
Supplemental cash flow information related to leases were as follows:
The weighted average remaining lease term and weighted average discount rates related to leases were as follows:
Supplemental balance sheet information related to leases is as follows:
Future maturities of lease liabilities as of August 1, 2020 are as follows:
As of August 1, 2020, the Company had no operating and finance leases that had not yet commenced. Subsequent to August 1, 2020, the Company amended its satellite transponder operating lease agreement which was expiring on October 31, 2020. The amended operating lease agreement extended the lease agreement an additional five years for total cash payments of $3.6 million.
The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.
Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef