Leases (Tables)

12 Months Ended

Jan. 29, 2022

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


	YEAR ENDED
	JANUARY 29,		JANUARY 30,		FEBRUARY 1,
	2022		2021		2020
Operating lease cost⁽¹⁾	$	99,985	$	84,852	$	86,448
Finance lease costs
Amortization of leased assets⁽¹⁾		43,964		41,292		36,991
Interest on lease liabilities⁽²⁾		26,412		24,011		22,608
Variable lease costs ⁽³⁾		36,914		20,485		23,471
Sublease income⁽⁴⁾		(4,184)		(7,723)		(9,609)
Total lease costs—net	$	203,091	$	162,917	$	159,909

(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 income based on our accounting policy. Refer to Note 3—Significant Accounting Policies.

(2)	Included in interest expense—net on the consolidated statements of income.

(3)

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 $28 million, $13 million and $15 million, respectively, and charges associated with common area maintenance of $8.8 million, $7.1 million and $8.9 million in fiscal 2021, fiscal 2020 and fiscal 2019, respectively. Other variable costs include 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 2021, fiscal 2020 and fiscal 2019.

(4)	Included as an offset to selling, general and administrative expenses on the consolidated statements of income.

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

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


		JANUARY 29,		JANUARY 30,
		2022		2021
	Balance Sheet Classification
Assets
Operating leases	Operating lease right-of-use assets	$	551,045	$	456,164
Finance leases ⁽¹⁾⁽²⁾	Property and equipment—net		784,327		711,804
Total lease right-of-use assets		$	1,335,372	$	1,167,968
Liabilities
Current⁽³⁾
Operating leases	Operating lease liabilities	$	73,834	$	71,524
Finance leases	Other current liabilities		15,511		14,671
Total lease liabilities—current			89,345		86,195
Non-current
Operating leases	Non-current operating lease liabilities		540,513		448,169
Finance leases	Non-current finance lease liabilities		560,550		485,481
Total lease liabilities—non-current			1,101,063		933,650
Total lease liabilities		$	1,190,408	$	1,019,845

(1)	Finance lease right-of-use assets include capitalized amounts related to our 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 $174 million and $133 million as of January 29, 2022 and January 30, 2021, respectively.

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

Summary of Maturities of Lease Liabilities

The maturities of lease liabilities are as follows as of January 29, 2022 (in thousands):


	OPERATING		FINANCE
FISCAL YEAR	LEASES		LEASES		TOTAL
2022	$	96,463	$	42,832	$	139,295
2023		89,438		43,238		132,676
2024		83,816		43,608		127,424
2025		82,506		44,818		127,324
2026		79,239		45,598		124,837
Thereafter		310,472		734,173		1,044,645
Total lease payments⁽¹⁾⁽²⁾		741,934		954,267		1,696,201
Less—imputed interest ⁽³⁾		(127,587)		(378,206)		(505,793)
Present value of lease liabilities	$	614,347	$	576,061	$	1,190,408

(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 $700 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of January 29, 2022, of which $31 million, $35 million, $39 million, $41 million and $40 million will be paid in fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $514 million will be paid subsequent to fiscal 2026.

(2)	Excludes future commitments under short-term lease agreements of $0.7 million as of January 29, 2022.

(3)	Calculated using the discount rate for each lease at lease commencement.

Summary of Supplemental Information Related to Leases

Supplemental information related to leases consists of the following:


	YEAR ENDED
	JANUARY 29,		JANUARY 30,
	2022		2021
Weighted-average remaining lease term (years)
Operating leases		9.1		8.7
Finance leases		20.0		18.4
Weighted-average discount rate
Operating leases		3.94%		3.97%
Finance leases		4.96%		5.04%

Summary of Other Information Related to Leases


	YEAR ENDED
	JANUARY 29,		JANUARY 30,
	2022		2021
Weighted-average remaining lease term (years)
Operating leases		9.1		8.7
Finance leases		20.0		18.4
Weighted-average discount rate
Operating leases		3.94%		3.97%
Finance leases		4.96%		5.04%