Leases (Tables)

12 Months Ended

Feb. 01, 2020

Lease costs—net consist of the following (in thousands):


	Year Ended
	February 1,		February 2,		February 3,
	2020		2019		2018
Operating lease cost⁽¹⁾⁽²⁾	$	86,448	$	87,742	$	95,499

Finance lease costs
Amortization of leased assets⁽¹⁾		36,991		28,848		19,542
Interest on lease liabilities⁽³⁾		22,608		16,785		11,154

Variable lease costs ⁽⁴⁾		23,471		21,889		23,280
Sublease income⁽⁵⁾		(9,609)		(7,794)		(1,003)
Total lease costs—net	$	159,909	$	147,470	$	148,472

(1)	Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the consolidated statements of operations based on the Company’s policy. Refer to Note 3—Significant Accounting Policies.

(2)	Includes short-term operating lease costs which are not material.

(3)	Included in interest expense—net on the consolidated statements of operations.

(4)

Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $14.6 million, $13.0 million and $13.8 million and charges associated with common area maintenance of $8.9 million, $8.9 million, and $9.5 million in fiscal 2019, fiscal 2018, and fiscal 2017, respectively. Other variable costs, such as single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in fiscal 2019, fiscal 2018, and fiscal 2017.

(5)	Included in selling, general and administrative expenses on the consolidated statements of operations.

Summary of Lease Right-of-use Assets and Lease Liabilities

Lease right-of-use assets and lease liabilities consist of the following (in thousands):


		February 1,		February 2,
		2020		2019
	Balance Sheet Classification
Assets
Operating leases	Operating lease right-of-use assets	$	410,904	$	440,504
Finance leases ⁽¹⁾⁽²⁾	Property and equipment—net		642,117		646,875
Total lease right-of-use assets			1,053,021		1,087,379

Liabilities
Current⁽³⁾
Operating leases	Operating lease liabilities	$	58,924	$	66,249
Finance leases	Other current liabilities		9,188		9,184
Total lease liabilities—current			68,112		75,433

Non-current
Operating leases	Non-current operating lease liabilities	$	409,930	$	437,557
Finance leases	Non-current finance lease liabilities		442,988		421,245
Total lease liabilities—non-current			852,918		858,802
Total lease liabilities		$	921,030	$	934,235

(1)	Finance lease right-of-use assets include capitalized amounts related to the Company’s completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.

(2)	Finance lease right-of-use assets are recorded net of accumulated amortization of $92.3 million and $55.5 million as of February 1, 2020 and February 2, 2019, respectively.

(3)	Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.

The maturities of lease liabilities are as follows as of February 1, 2020 (in thousands):


Fiscal year	Operating Leases		Finance Leases		Total
2020	$	75,634	$	32,138	$	107,772
2021		69,343		35,323		104,666
2022		60,711		35,747		96,458
2023		56,266		36,170		92,436
2024		52,424		36,660		89,084
Thereafter		246,482		568,856		815,338
Total lease payments⁽¹⁾		560,860		744,894		1,305,754
Less—imputed interest ⁽²⁾		(92,006)		(292,718)		(384,724)
Present value of lease liabilities⁽³⁾	$	468,854	$	452,176	$	921,030

(1)

Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $360.9 million of legally binding payments under the noncancellable term for leases signed but not yet commenced as of February 1, 2020.

(2)	Calculated using the incremental borrowing rate for each lease at lease commencement.

(3)	Excludes future commitments under short-term lease agreements of $0.9 million as of February 1, 2020.

Summary of Maturities of Lease Liabilities

Summary of Supplemental Information Related to Leases


	February 1,		February 2,
	2020		2019
Weighted-average remaining lease term (years)
Operating leases		8.9		9.2
Finance leases		18.6		19.6

Weighted-average discount rate
Operating leases		3.82%		3.78%
Finance leases		5.25%		5.28%

Summary of Other Information Related to Leases

Other information related to leases consists of the following (in thousands):


	Year Ended
	February 1,		February 2,		February 3,
	2020		2019		2018
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(95,329)	$	(91,965)	$	(95,279)
Operating cash flows from finance leases		(25,260)		(16,785)		(11,154)
Financing cash flows from finance leases		(9,682)		(6,885)		(6,105)
Total cash outflows from leases	$	(130,271)	$	(115,635)	$	(112,538)

Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash)
Finance leases	$	34,063	$	174,977	$	26,770
Operating leases		42,122		33,790		33,710