We lease certain property and equipment used in our operations. Some of our store leases include additional rental payments based on a percentage of sales over contractual levels or which are adjusted periodically for inflation. Our typical store lease has an initial term of 20 to 25 years and four to eight five-year renewal options.

Lease assets represent our right to use an underlying asset for the lease term. Lease assets are recognized at commencement date based on the value of the lease liability and are adjusted for any lease payments made to the lessor at or before commencement date, minus any lease incentives received and any initial direct costs incurred by the lessee.

Lease liabilities represent our contractual obligation to make lease payments. At the commencement date, the lease liabilities equal the present value of minimum lease payments over the lease term. As the implicit interest rate is not readily identifiable in our leases, we estimate our collateralized borrowing rate to calculate the present value of lease payments.

Leases with a term of 12 months or less are excluded from the balance; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and non-lease components for new and modified leases.

The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements:

Consolidated Balance Sheets		January 30, 2021		February 1, 2020
(Dollars in Millions)	Classification	January 30, 2021		February 1, 2020
Assets
Operating leases	Operating leases	$	2,398	$	2,391
Finance leases	Property & equipment, net		708		672
Total operating & finance leases			3,106		3,063
Liabilities
Current
Operating leases	Current portion of operating leases		161		158
Finance leases	Current portion of finance leases & financing obligations		76		88
Noncurrent
Operating leases	Operating leases		2,625		2,619
Finance leases	Finance leases & financing obligations		926		877
Total operating & finance leases		$	3,788	$	3,742

Consolidated Statements of Operations		2020		2019
(Dollars in Millions)	Classification	2020		2019
Operating leases	Selling, general, and administrative	$	314	$	314
Finance Leases
Amortization of leased assets	Depreciation and amortization		79		72
Interest on leased assets	Interest expense, net		102		98
Total operating and finance leases		$	495	$	484

Consolidated Statement of Cash Flows	2020		2019
(Dollars in Millions)	2020		2019
Cash paid for amounts included in the measurement of leased liabilities
Operating cash flows from operating leases	$	305	$	320
Operating cash flows from finance leases		102		98
Financing cash flows from finance leases		69		76

	January 30, 2021
	Operating Leases			Finance Leases
(Dollars in Millions)	Operating Leases			Finance Leases			Total
2021	$	313		$	170		$	483
2022		306			154			460
2023		293			134			427
2024		259			118			377
2025		244			113			357
After 2025		3,448			1,804			5,252
Total lease payments	$	4,863		$	2,493		$	7,356
Amount representing interest		(2,077	)		(1,491	)		(3,568	)
Lease liabilities	$	2,786		$	1,002		$	3,788

Total lease payments include $3.1 billion related to options to extend operating lease terms that are reasonably certain of being exercised and $1.6 billion related to options to extend finance lease terms that are reasonably certain of being exercised.

The following table summarizes weighted-average remaining lease term and discount rate:

	January 30, 2021			February 1, 2020
	January 30, 2021			February 1, 2020
Weighted-average remaining term (years)
Operating leases		19			20
Finance leases		18			17
Weighted-average discount rate
Operating leases		6	%		6	%
Finance leases		10	%		11	%

A sale leaseback was completed during the second quarter of 2020 for our San Bernardino E-commerce fulfillment and distribution center. The properties were sold for $195 million and generated net proceeds of $193 million after fees. A gain of $127 million was recognized during the second quarter of 2020 and is recorded in Gain on sale of real estate. An initial operating lease liability and a corresponding right of use asset of $84 million were recorded for these leased locations.

Historical failed sale-leasebacks that did not qualify for sale-leaseback accounting upon adoption of ASC 842 continue to be accounted for as financing obligations.

The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements:

Consolidated Balance Sheets		January 30, 2021		February 1, 2020
(Dollars in Millions)	Classification	January 30, 2021		February 1, 2020
Assets
Financing obligations	Property & equipment, net	$	65	$	76
Liabilities
Current	Current portion of finance leases & financing obligations		39		36
Noncurrent	Finance leases & financing obligations		461		490
Total financing obligations		$	500	$	526

Consolidated Statement of Operations		2020		2019
(Dollars in Millions)	Classification	2020		2019
Amortization of financing obligation assets	Depreciation and amortization	$	11	$	11
Interest on financing obligations	Interest expense, net		36		37
Total financing obligations		$	47	$	48

Consolidated Statement of Cash Flows	2020		2019
(Dollars in Millions)	2020		2019
Cash paid for amounts included in the measurement of financing obligations
Operating cash flows from financing obligations	$	36	$	37
Financing cash flows from financing obligations		36		37
Proceeds from financing obligations		9		11
(Gain) on extinguishment of debt	—			(9	)

In 2019, we purchased leased equipment that was accounted for as a financing obligation resulting in recognition of a $9 million gain on extinguishment of debt.

The following table summarizes future financing obligation payments by fiscal year:

(Dollars in Millions)	January 30, 2021
(Dollars in Millions)	Financing Obligations
2021	$	70
2022		70
2023		67
2024		62
2025		49
After 2025		207
Total lease payments	$	525
Non-cash gain on future sale of property		219
Amount representing interest		(244	)
Financing obligation liability	$	500

Total payments exclude $7.3 million of legally binding payments for contracts signed, but not yet commenced.

The following table summarizes the weighted-average remaining term and discount rate for financing obligations: