Lease Accounting (Tables)

9 Months Ended

Nov. 02, 2019

Leases [Abstract]

Assets and liabilities, lessee

As of November 2, 2019, the components of leases and lease costs are as follows (in thousands):

	Balance Sheet Location	Nov 2, 2019
Assets
Operating	Operating lease right-of-use assets	$	874,945
Finance	Property and equipment, net	16,780
Total lease assets		$	891,725
Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	189,581
Finance	Current portion of borrowings and finance lease obligations	2,239
Noncurrent:
Operating	Long-term operating lease liabilities	740,484
Finance	Long-term debt and finance lease obligations, net	15,008
Total lease liabilities		$	947,312

Lease cost

	Income Statement Location	Three Months Ended Nov 2, 2019		Nine Months Ended Nov 2, 2019
Operating lease costs1	Cost of product sales	$	56,370	$	173,935
Operating lease costs1	Selling, general and administrative expenses	6,746		17,730
Finance lease costs
Amortization of leased assets2	Cost of product sales	2,025		2,112
Amortization of leased assets2	Selling, general and administrative expenses	1,681		2,861
Interest on lease liabilities	Interest expense	165		738
Variable lease costs1	Cost of product sales	24,592		74,500
Variable lease costs1	Selling, general and administrative expenses	677		2,132
Short-term lease costs1	Selling, general and administrative expenses	208		603
Total lease costs		$	92,464	$	274,611

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Notes:

¹   Rental expense for all property and equipment operating leases during the three and nine months ended November 3, 2018 aggregated to $81.1 million and $223.9 million, respectively, including percentage rent of $15.0 million and $46.9 million, respectively. During the three and nine months ended November 3, 2018, the Company also recognized insurance, taxes, sales promotion and common area maintenance charges totaling $7.2 million and $38.5 million, respectively, related to its operating leases.

²  

Amortization of leased assets related to finance leases are included in depreciation expense within cost of product sales or selling, general and administrative expenses depending on the nature of the asset in the Company’s condensed consolidated statements of income (loss).

Operating lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of November 2, 2019 are as follows (in thousands):

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
20201	$	67,971	$	931	$	68,902
2021	205,261		3,362		208,623
2022	193,428		3,666		197,094
2023	161,815		3,263		165,078
2024	135,574		3,108		138,682
After 2024	266,568		7,279		273,847
Total lease payments	1,030,617		21,609		1,052,226
Less: Interest	100,552		4,362		104,914
Present value of lease liabilities	$	930,065	$	17,247	$	947,312

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Notes:

¹ 

Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the nine months ended November 2, 2019.

Finance lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of November 2, 2019 are as follows (in thousands):

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
20201	$	67,971	$	931	$	68,902
2021	205,261		3,362		208,623
2022	193,428		3,666		197,094
2023	161,815		3,263		165,078
2024	135,574		3,108		138,682
After 2024	266,568		7,279		273,847
Total lease payments	1,030,617		21,609		1,052,226
Less: Interest	100,552		4,362		104,914
Present value of lease liabilities	$	930,065	$	17,247	$	947,312

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Notes:

¹ 

Represents the maturity of lease liabilities for the remainder of fiscal 2020 and does not include payments made during the nine months ended November 2, 2019.

Other supplemental information

Other supplemental information as of November 2, 2019 is as follows (dollars in thousands):

Lease Term and Discount Rate	Nov 2, 2019
Weighted-average remaining lease term (years)
Operating leases	5.9 years
Finance leases	6.6 years
Weighted-average discount rate
Operating leases	3.5%
Finance leases	7.1%

Supplemental Cash Flow Information	Nine Months Ended Nov 2, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	187,523
New operating ROU assets obtained in exchange for lease liabilities	$	118,486