LEASES

6 Months Ended

Aug. 02, 2024

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 August 2, 2024, the remaining terms of the Company’s leases range from one month to approximately twelve years. As of August 2, 2024 and February 2, 2024, there were no material finance leases in which the Company was a lessee.

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 4 of the Notes to the Condensed Consolidated Financial Statements for more information about the Company’s lessor arrangements.

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


	Three Months Ended				Six Months Ended
	August 2, 2024		August 4, 2023		August 2, 2024		August 4, 2023

	(in millions)
Operating lease costs	$	75	$	63	$	146	$	142
Variable costs	15		19		33		43
Total lease costs	$	90	$	82	$	179	$	185

During the six months ended August 2, 2024 and August 4, 2023, 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	August 2, 2024			February 2, 2024

		(in millions, except for term and discount rate)
Operating lease right-of-use assets	Other non-current assets	$	716		$	707

Current operating lease liabilities	Accrued and other current liabilities	$	246		$	253
Non-current operating lease liabilities	Other non-current liabilities	581			576
Total operating lease liabilities		$	827		$	829

Weighted-average remaining lease term (in years)		4.47			4.56
Weighted-average discount rate		4.86		%	4.79		%

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


	Six Months Ended
	August 2, 2024		August 4, 2023

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities — operating cash outflows from operating leases	$	137	$	153

Right-of-use assets obtained in exchange for new operating lease liabilities	$	128	$	131

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:


	August 2, 2024

	(in millions)
Fiscal 2025 (remaining six months)	$	126
Fiscal 2026	233
Fiscal 2027	195
Fiscal 2028	145
Fiscal 2029	98
Thereafter	119
Total lease payments	916
Less: Imputed interest	89
Total	$	827
Current operating lease liabilities	$	246
Non-current operating lease liabilities	$	581

As of August 2, 2024, the Company’s undiscounted operating leases that had not yet commenced were immaterial.