Leases

12 Months Ended

Jan. 29, 2022

Leases [Abstract]

Leases

15. Leases

The majority of our leases are operating leases for our company-operated retail store locations. We also lease, among other things, distribution and warehouse facilities, and office space for corporate administrative purposes.  Operating lease periods generally range from 5 to 10 years and generally contain rent escalation provisions. Some of the store leases contain renewal options with varying terms and conditions.

Amounts recognized in the Consolidated Balance Sheet were as follows:

	January 29,		January 30,
($ in millions)	2022		2021
Operating leases:
Operating lease right-of-use assets	$	2,616	$	2,716
Operating lease liabilities classified as current	$	572	$	580
Operating lease liabilities classified as long-term		2,363		2,499
Total operating lease liabilities	$	2,935	$	3,079

	January 29,		January 30,
($ in millions)	2022		2021
Finance leases:
Property and equipment, net	$	59	$	10
Finance lease obligations classified as current	$	6	$	2
Finance lease obligations classified as long-tern		57		8
Total finance lease obligations	$	63	$	10

Other information related to our leases as of January 29, 2022 and January 30, 2021 consisted of the following:

	January 29,		January 30,
	2022		2021
Weighted-average remaining lease term (years)
Operating leases	6.7		6.7
Finance leases	15.0		4.4
Weighted-average discount rate
Operating leases	4.7	%	5.0	%
Finance leases	4.2	%	4.1	%

Total lease costs include fixed operating lease costs, variable lease costs, and short-term lease costs. Most of our real estate leases require us to pay certain expenses, such as CAM costs, real estate taxes, and other executory costs, of which the fixed portion is included in operating lease costs. Variable lease costs include non-lease components which are not fixed and are not included in determining the present value of our lease liability. Variable lease costs also include amounts based on a percentage of gross sales in excess of specified levels that are recognized when probable.

Lease costs which relate to retail stores and distribution centers are classified within cost of sales, while non-store lease costs are included in SG&A. Amortization of leased equipment assets is classified in depreciation and amortization. The components of lease cost for 2021, 2020, and 2019 were as follows:

($ in millions)	2021		2020		2019
Operating lease costs	$	653	$	620	$	668
Variable lease costs		331		290		332
Short-term lease costs		23		23		23
Sublease income		(1)		(1)		(1)
Total operating lease costs		1,006		932		1,022
Finance lease costs:
Amortization of leased assets		4		1		—
Interest on lease liabilities		1		—		—
Total finance lease costs		5		1		—
Total lease cost	$	1,011	$	933	$	1,022

Maturities of lease liabilities as of January 29, 2022 are as follows:

($ in millions)	Operating leases		Finance leases		Total
2022	$	686	$	8	$	694
2023		603		8		611
2024		512		8		520
2025		418		6		424
2026		323		4		327
Thereafter		899		53		952
Total lease payments		3,441		87		3,528
Less: Interest		506		24		530
Total lease liabilities	$	2,935	$	63	$	2,998

As of January 29, 2022, we signed operating leases primarily for retail stores that have not yet commenced and the total future undiscounted lease payments under these leases are $87 million.

Supplemental cash flow information related to leases for the years ended January 29, 2022 and January 30, 2021 were as follows:

($ in millions)	2021		2020
Cash paid for amounts included in measurement of operating lease liabilities	$	790	$	626
Right-of-use assets obtained in exchange for lease obligations		417		331
Cash paid for amounts included in measurement of finance lease liabilities		5		1
Leases obtained in exchange for finance lease obligations		4		11