Sale of Receivables

12 Months Ended

Jan. 29, 2021

Receivables [Abstract]

Sales of Receivables

Sale of Receivables:

On January 21, 2020 the Company entered into a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser) for the sale of up to a maximum amount of $200 million of certain designated eligible receivables with the U.S. government. On March 17, 2020, the Company amended the MARPA Facility to increase the aggregate facility limit from $200 million to $300 million. The receivables sold under the MARPA Facility are without recourse for any U.S. government credit risk. The MARPA Facility had an initial term of one year, but effective with the renewal on January 21, 2021 will automatically renew each year unless one of the parties gives prior notice to terminate.

The Company accounts for these receivable transfers under the MARPA Facility as sales under ASC 860, Transfers and Servicing, and removes the sold receivables from its balance sheet. The fair value of the sold receivables approximated their book value due to their short-term nature.

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services. The Company estimated that its servicing fee was at fair value and therefore has not recognized a servicing asset or liability as of January 29, 2021. Proceeds from the sale of receivables are reflected as cash flows from operating activities on the consolidated statements of cash flows.

During the twelve months ended January 29, 2021, the Company incurred purchase discount fees of $2 million, which are presented in other (income) expense, net on the consolidated statements of income.

MARPA Facility activity consisted of the following:

	Year Ended
	January 29, 2021
	(in millions)
Beginning balance	$	—
Sale of receivables	3,226
Cash collections	(3,041)
Increase to cash flows from operating activities	185
Cash collected, not remitted to Purchaser(1)	(25)
Remaining sold receivables	$	160

(1)    Includes the cash collected on behalf of but not yet remitted to the Purchaser as of January 29, 2021. This balance is included in accounts payable on the consolidated balance sheets as of January 29, 2021.