Annual report pursuant to Section 13 and 15(d)

Leases

v3.20.1
Leases
12 Months Ended
Feb. 01, 2020
Leases [Abstract]  
Leases Leases
 
We conduct a major part of our operations from leased premises (building or land) that include retail stores, store distribution centers, warehouses, offices and other facilities. Almost all leases include renewal options where we can extend the lease term from one to 50 years or more. We also lease equipment under finance leases for terms of primarily three to five years, and we rent or sublease certain real estate to third parties. Our lease contracts do not contain any purchase options or residual value guarantees.

Leases
($ in millions)
 
Classification
 
2019
Assets
 
 
 
 
Operating lease assets
 
Operating lease assets
 
$
998

Total lease assets
 
 
 
$
998

Liabilities
 
 
 
 
Current
 
 
 
 
Operating
 
Current operating lease liabilities
 
$
67

Finance
 
Current portion of finance leases and note payable
 
1

Noncurrent
 
 
 
 
Operating
 
Noncurrent operating lease liabilities
 
1,108

Finance
 
Long-term finance leases and note payable
 

Total lease liabilities
 
 
 
$
1,176



Lease Cost
($ in millions)
 
Classification
 
2019
Operating lease cost
 
Selling, general and administrative expense (SG&A)
 
$
196

Variable lease cost
 
Selling, general and administrative expense (SG&A)
 
133

Finance lease cost
 
 
 
 
Amortization of lease assets
 
Depreciation and amortization
 

Interest on lease liabilities
 
Net interest expense
 

Rental income
 
Real estate and other, net
 
10

Net lease cost
 
 
 
$
319



As of February 1, 2020, future lease payments were as follows:
($ in millions)
Operating Leases
 
Finance Leases
 
Total
2020
$
189

 
$

 
$
189

2021
197

 

 
197

2022
184

 

 
184

2023
180

 

 
180

2024
167

 

 
167

Thereafter
1,750

 

 
1,750

Total lease payments
2,667

 

 
2,667

Less: amounts representing interest
(1,492
)
 

 
(1,492
)
Present value of lease liabilities
$
1,175

 
$

 
$
1,175



Lease term and discount rate are as follows:
 
2019
Weighted-average remaining lease term (years)
 
Operating leases
15

Weighted-average discount rate
 
Operating leases
11
%

Other information:
($ in millions)
2019
Cash paid for amounts included in the measurement of these liabilities
 
Operating cash flows from operating leases
210

Operating cash flows from finance leases
1

Financing cash flows from finance leases
1


As determined prior to the adoption of the new lease standard, the future minimum lease payments under operating leases in effect as of February 2, 2019 were as follows:
($ in millions)
 
2019
$
190

2020
178

2021
163

2022
148

2023
135

Thereafter
1,626

Less: sublease income
(43
)
Total minimum lease payments
$
2,397