Leases (Tables)

9 Months Ended

May 02, 2020

Leases [Abstract]

Lease, Cost

A summary of the Company’s operating lease costs from continuing operations is as follows:

	Three Months Ended		Nine Months Ended
	May 2, 2020		May 2, 2020
	(millions)
Single lease costs (a)	$	91.1	$	281.0
Variable lease costs (b)	48.5		153.1
Total lease expenses	139.6		434.1
Less rental income (c)	(0.8)		(2.9)
Total net rental expense (d)	$	138.8	$	431.2

________

^(a) Includes amortization and interest expense associated with operating lease right-of-use assets and liabilities.

^(b) Includes variable payments related to both lease and non-lease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as month-to-month rent payments while expired store lease contracts are renegotiated.

^(c) Substantially reflects rental income received related to Company-owned space in Duluth, MN.

^(d) Total occupancy costs included in discontinued operations related to Dressbarn were not material for the three months ended May 2, 2020 and $32.1 million for the nine months ended May 2, 2020.

The following table provides a summary of the Company’s operating lease costs from continuing operations for the three and nine months ended May 4, 2019, which was accounted for in accordance with Accounting Standards Codification (“ASC”) 840, “Leases” (“ASC 840”). Prior periods have not been adjusted for the adoption of ASU 2016-02.

	Three Months Ended		Nine Months Ended
	May 4, 2019		May 4, 2019
	(millions)
Base rentals	$	99.1	$	296.4
Percentage rentals	6.4		21.0
Other occupancy costs, primarily CAM and real estate taxes	43.4		126.3
Total (a)	$	148.9	$	443.7

________

^(a) Total occupancy costs included in discontinued operations were $52.5 million and $163.1 million for the three and nine months ended May 4, 2019, respectively.

Operating leases, weighted average remaining lease terms and discount rate

The weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rates used to calculate the Company’s operating lease liabilities are as follows:

	May 2, 2020
Weighted-average remaining lease term (years)	5.3
Weighted-average discount rate	25.7%

Lessee, Operating Lease, Liability, Maturity

The following table provides a maturity analysis of the Company’s operating lease liabilities, based on undiscounted cash flows, as of May 2, 2020:

Fiscal Years	Minimum Operating Lease Payments (a) (b)
	(millions)
2020 (excluding the nine months ended May 2, 2020)	$	99.5
2021	355.1
2022	290.5
2023	213.4
2024	148.9
Thereafter	462.6
Total undiscounted operating lease liabilities	1,570.0
Less imputed interest	(733.0)
Present value of operating lease liabilities	837.0
Less current portion of lease liabilities	(167.7)
Total long-term lease liabilities	$	669.3

^(a) Net of sublease income, which is not expected to be significant in any period.

^(b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table.

Future Minimum Lease Payments Under Noncancelable Operating Leases

As reported under the previous accounting standard, the following table provides a summary of total consolidated operating lease commitments, including leasehold financing obligations, under non-cancelable leases as of August 3, 2019:

Fiscal Years	Minimum Operating Lease Payments (a) (b)
	(millions)
2020	$	462.0
2021	402.3
2022	325.4
2023	242.7
2024	172.6
Thereafter	563.3
Total future minimum rentals	$	2,168.3

^(a) Net of sublease income, which is not expected to be significant in any period.

^(b) Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved or co-tenancy requirements are not being satisfied. All future minimum rentals under such leases have been included in the above table.

Schedule of Cash Flow, Supplemental Disclosures

Supplemental disclosures related to leases are as follows:

	Three Months Ended		Nine Months Ended
	May 2, 2020		May 2, 2020
	(millions)
Cash payments arising from operating lease liabilities (included in cash flows from operating activities)	$	101.0	$	303.7
Non-cash operating lease liabilities from obtaining right-of-use assets	3.0		4.4

	Nine Months Ended
Cash Interest and Taxes:	May 2, 2020		May 4, 2019
	(millions)
Cash paid for interest	$	65.6	$	72.7
Cash paid for income taxes (a)	$	9.1	$	4.8

^(a) Includes a net payment of $0.1 million and a net refund of $0.2 million for the nine months ended May 2, 2020 and May 4, 2019, respectively, related to the Dressbarn and maurices businesses, which are classified in discontinued operations.