LEASES (Tables)

12 Months Ended

Aug. 01, 2020

Leases [Abstract]

Schedule of Leases, Financial Statement Presentation

Lease assets and liabilities are as follows (in thousands):

Lease Type	Consolidated Balance Sheets Location	August 1, 2020
Operating lease assets	Operating lease assets	$	982,808
Finance lease assets	Property and equipment, net	129,517
Total lease assets		$	1,112,325
Operating liabilities	Current portion of operating lease liabilities	$	131,022
Finance liabilities	Current portion of long-term debt and finance lease liabilities	12,746
Operating liabilities	Long-term operating lease liabilities	873,990
Finance liabilities	Long-term finance lease liabilities	143,303
Total lease liabilities		$	1,161,061

Schedule of Lease Costs

The following tables provide other information required by ASC 842:

Lease Term and Discount Rate	August 1, 2020
Weighted-average remaining lease term (years)
Operating leases	10.4 years
Finance leases	3.1 years
Weighted-average discount rate
Operating leases	10.6	%
Finance leases	8.8	%

Other Information
(in thousands)	2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	231,272
Operating cash flows from finance leases	9,334
Financing cash flows from finance leases	19,972
Leased assets obtained in exchange for new finance lease liabilities	93,060
Leased assets obtained in exchange for new operating lease liabilities	195,087

The Company’s lease cost under ASC 842 is as follows:

(in thousands)	Consolidated Statements of Operations Location	August 1, 2020
Operating lease cost	Operating expenses	$	223,016
Short-term lease cost	Operating expenses	30,992
Variable lease cost	Operating expenses	151,065
Sublease income	Operating expenses	(3,504		)
Sublease income	Net sales	(22,543		)
Other sublease income, net	Restructuring, acquisition and integration related expenses(2)	(5,075		)
Net operating lease cost(1)		373,951
Amortization of leased assets	Operating expenses	16,052
Interest on lease liabilities	Interest expense, net	11,617
Finance lease cost		27,669
Total net lease cost		$	401,620

(1) Rent expense as presented here includes $6.8 million in fiscal 2020 of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations.

(2)

Includes $35.5 million of lease expense and $(40.6) million of lease income that is recorded within Restructuring, acquisition and integration related expenses for assigned leases related to previously sold locations and surplus, non-operating properties for which the Company is restructuring its obligations

Schedule of Rent Expense

Rent expense as presented below under ASC 840 excludes variable lease rent that is included in total net lease cost under ASC 842 in the table above.

(in thousands)	2019			2018
Rent expense(1)	$	211,807		$	88,697
Less subtenant rentals recorded in Net sales	(17,475		)	—
Less subtenant rentals recorded in Operating expenses	(13,683		)	(1,649		)
Total net rent expense	$	180,649		$	87,048

(1)

Rent expense as presented here includes $9.5 million and $0.0 million in fiscal 2019 and 2018, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as we expect to remain primarily obligated under these leases.

Future Minimum Lease Payments and Receipts (New Accounting Standard)

As of August 1, 2020, these Lease Liabilities and Lease Receipts consisted of the following (in thousands):

	Lease Liabilities						Lease Receipts					Net Lease Obligations
Fiscal Year	Operating Leases(1)			Finance Leases(2)			Operating Leases			Finance Leases		Operating Leases		Finance Leases
2021	$	226,081		$	23,801		$	(51,750	)	$	—	$	174,331	$	23,801
2022	217,353			118,812			(46,642		)	—		170,711		118,812
2023	184,360			14,717			(36,361		)	—		147,999		14,717
2024	157,528			13,602			(28,347		)	—		129,181		13,602
2025	114,577			9,316			(18,155		)	—		96,422		9,316
Thereafter	868,870			6,239			(45,093		)	—		823,777		6,239
Total undiscounted lease liabilities and receipts	$	1,768,769		$	186,487		$	(226,348	)	$	—	$	1,542,421	$	186,487
Less interest(3)	(763,757		)	(30,438		)
Present value of lease liabilities	1,005,012			156,049
Less current lease liabilities	(131,022		)	(12,746		)
Long-term lease liabilities	$	873,990		$	143,303

(1) Operating lease payments include $11.4 million related to extension options that are reasonably certain of being exercised and exclude $23.0 million of legally binding minimum lease payments for leases signed but not yet commenced.

(2) Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.4 million of legally binding minimum lease payments for leases signed but not yet commenced. This table excludes a $59.5 million payment related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease.

(3) Calculated using the interest rate for each lease.

Future Minimum Lease Payments and Lease Receipts (Prior Accounting Standard)

As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands):

	Lease Obligations					Lease Receipts						Net Lease Obligations
Fiscal Year	Operating Leases		Capital Leases			Operating Leases			Capital Leases			Operating Leases		Capital Leases
2020	$	223,612	$	41,550		$	(55,922	)	$	(319	)	$	167,690	$	41,231
2021	190,845		32,804			(41,425		)	—			149,420		32,804
2022	179,326		29,869			(35,998		)	—			143,328		29,869
2023	154,812		26,699			(25,591		)	—			129,221		26,699
2024	135,795		23,095			(18,183		)	—			117,612		23,095
Thereafter	1,063,674		46,999			(59,186		)	—			1,004,488		46,999
Total future minimum obligations (receipts)	$	1,948,064	$	201,016		$	(236,305	)	$	(319	)	$	1,711,759	$	200,697
Less interest			(68,138		)
Present value of capital lease obligations			132,878
Less current capital lease obligations			(24,670		)
Long-term capital lease obligations			$	108,208