Leases

12 Months Ended

Jan. 28, 2023

Leases [Abstract]

Leases

16. 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 28,		January 29,
($ in millions)	2023		2022
Operating leases:
Operating lease right-of-use assets	$	2,443	$	2,616
Operating lease liabilities classified as current	$	544	$	572
Operating lease liabilities classified as long-term		2,230		2,363
Total operating lease liabilities	$	2,774	$	2,935

	January 28,		January 29,
($ in millions)	2023		2022
Finance leases:
Property and equipment, net	$	53	$	59
Finance lease obligations classified as current	$	6	$	6
Finance lease obligations classified as long-term		51		57
Total finance lease obligations	$	57	$	63

16. Leases (continued)

Other information related to our leases as of January 28, 2023 and January 29, 2022 consisted of the following:

	January 28,		January 29,
	2023		2022
Weighted-average remaining lease term (years)
Operating leases	6.5		6.7
Finance leases	14.7		15.0
Weighted-average discount rate
Operating leases	5.0	%	4.7	%
Finance leases	4.3	%	4.2	%

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 2022, 2021, and 2020 were as follows:

($ in millions)	2022		2021		2020
Operating lease costs	$	657	$	653	$	620
Variable lease costs		308		331		290
Short-term lease costs		19		23		23
Sublease income		(1)		(1)		(1)
Total operating lease costs		983		1,006		932
Finance lease costs:
Amortization of leased assets		6		4		1
Interest on lease liabilities		3		1		—
Total finance lease costs		9		5		1
Total lease cost	$	992	$	1,011	$	933

Maturities of lease liabilities as of January 28, 2023 are as follows:

($ in millions)	Operating leases		Finance leases		Total
2023	$	651	$	8	$	659
2024		576		8		584
2025		481		6		487
2026		387		4		391
2027		304		4		308
Thereafter		877		48		925
Total lease payments		3,276		78		3,354
Less: Interest		502		21		523
Total lease liabilities	$	2,774	$	57	$	2,831

As of January 28, 2023, we signed operating leases primarily for retail stores that have not yet commenced and the total future undiscounted lease payments under these leases are $102 million.