LEASES

3 Months Ended

Apr. 29, 2022

The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are typically classified as operating leases. The Company’s lease contracts are generally for office buildings used to conduct its business, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company also leases certain global logistics warehouses, employee vehicles, and equipment. As of April 29, 2022, the remaining terms of the Company’s leases range from less than one month to approximately ten years.

The Company also enters into leasing transactions in which the Company is the lessor, primarily through customer financing arrangements offered through DFS. DFS originates leases that are primarily classified as either sales-type leases or operating leases. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for more information on the DFS lease portfolio and related lease disclosures.

Financial information associated with the Company’s leases in which the Company is the lessee is contained in this Note. As of April 29, 2022 and January 28, 2022, there were no material finance leases for which the Company was a lessee.

The following table presents components of lease costs included in the Condensed Consolidated Statements of Income for the periods indicated:


	Three Months Ended
	April 29, 2022		April 30, 2021
	(in millions)
Operating lease costs	$	72	$	94
Variable costs	25		26
Total lease costs	$	97	$	120

During the three months ended April 29, 2022 and April 30, 2021, sublease income, finance lease costs, and short-term lease costs were immaterial.

The following table presents supplemental information related to operating leases included in the Condensed Consolidated Statements of Financial Position as of the dates indicated:


	Classification	April 29, 2022			January 28, 2022
		(in millions, except for term and discount rate)
Operating lease right-of-use assets	Other non-current assets	$	837		$	871

Current operating lease liabilities	Accrued and other current liabilities	$	273		$	287
Non-current operating lease liabilities	Other non-current liabilities	687			720
Total operating lease liabilities		$	960		$	1,007

Weighted-average remaining lease term (in years)		5.43			5.51
Weighted-average discount rate		2.97		%	3.01		%

The following table presents supplemental cash flow information related to leases for the periods indicated:


	Three Months Ended
	April 29, 2022		April 30, 2021
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities — operating cash outflows from operating leases (a)	$	80	$	134

Right-of-use assets obtained in exchange for new operating lease liabilities	$	72	$	97

____________________

(a) Cash paid for amounts included in the measurement of lease liabilities - operating cash outflows from operating leases from discontinued operations was $50 million for the three months ended April 30, 2021.

The following table presents the future maturity of the Company’s operating lease liabilities under non-cancelable leases and reconciles the undiscounted cash flows for these leases to the lease liability recognized on the Condensed Consolidated Statements of Financial Position as of the date indicated:


	April 29, 2022
	(in millions)
Fiscal 2023 (remaining nine months)	$	209
Fiscal 2024	225
Fiscal 2025	160
Fiscal 2026	128
Fiscal 2027	105
Thereafter	215
Total lease payments	1,042
Less: Imputed interest	(82)
Total	$	960
Current operating lease liabilities	$	273
Non-current operating lease liabilities	$	687

As of April 29, 2022, the Company’s undiscounted operating leases that had not yet commenced were immaterial.