Lease Accounting (Tables)

3 Months Ended

May 02, 2020

As of May 2, 2020 and February 1, 2020, the components of leases are as follows (in thousands):



	Balance Sheet Location	May 2, 2020		Feb 1, 2020
Assets
Operating	Operating lease right-of-use assets	$	778,030	$	851,990
Finance	Property and equipment, net	15,159		15,972
Total lease assets		$	793,189	$	867,962

Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	226,967	$	192,066
Finance	Current portion of borrowings and finance lease obligations	2,629		2,273
Noncurrent:
Operating	Long-term operating lease liabilities	659,947		714,079
Finance	Long-term debt and finance lease obligations	13,222		14,262
Total lease liabilities		$	902,765	$	922,680

Lease cost



		Three Months Ended
	Income Statement Location	May 2, 2020		May 4, 2019
Operating lease costs	Cost of product sales	$	55,369	$	58,816
Operating lease costs	Selling, general and administrative expenses	5,176		5,264
Finance lease costs
Amortization of leased assets¹	Cost of product sales	681		43
Amortization of leased assets¹	Selling, general and administrative expenses	1,278		543
Interest on lease liabilities	Interest expense	282		287
Variable lease costs²	Cost of product sales	14,348		24,825
Variable lease costs²	Selling, general and administrative expenses	579		827
Short-term lease costs	Cost of product sales	239		—
Short-term lease costs	Selling, general and administrative expenses	1,789		212
Total lease costs		$	79,741	$	90,817

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Notes:


¹	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 loss.

During the three months ended May 2, 2020, variable lease costs included certain rent concessions granted related to the COVID-19 pandemic. Refer to Note 1 for further information.

Operating lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of May 2, 2020 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2021¹	$	185,976	$	2,441	$	188,417
2022	198,951		3,660		202,611
2023	164,949		3,251		168,200
2024	136,666		3,072		139,738
2025	95,606		2,289		97,895
After 2025	189,303		4,867		194,170
Total lease payments	971,451		19,580		991,031
Less: Interest	84,537		3,729		88,266
Present value of lease liabilities	$	886,914	$	15,851	$	902,765

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Notes:

Represents the maturity of lease liabilities for the remainder of fiscal 2021 and also includes rent payments that have been deferred due to the COVID-19 pandemic. This amount does not include payments made during the three months ended May 2, 2020.

Finance lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of May 2, 2020 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2021¹	$	185,976	$	2,441	$	188,417
2022	198,951		3,660		202,611
2023	164,949		3,251		168,200
2024	136,666		3,072		139,738
2025	95,606		2,289		97,895
After 2025	189,303		4,867		194,170
Total lease payments	971,451		19,580		991,031
Less: Interest	84,537		3,729		88,266
Present value of lease liabilities	$	886,914	$	15,851	$	902,765

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Notes:

Other supplemental information

Other supplemental information is as follows (dollars in thousands):



Lease Term and Discount Rate	May 2, 2020
Weighted-average remaining lease term (years)
Operating leases	5.8 years
Finance leases	6.1 years
Weighted-average discount rate
Operating leases	3.5%
Finance leases	7.1%



	Three Months Ended
Supplemental Cash Flow Information	May 2, 2020		May 4, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	32,618	$	62,082
New operating ROU assets obtained in exchange for lease liabilities	$	16,332	$	68,804