Lease Accounting (Tables)

6 Months Ended

Aug. 01, 2020

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



	Balance Sheet Location	Aug 1, 2020		Feb 1, 2020
Assets
Operating	Operating lease right-of-use assets	$	766,853	$	851,990
Finance	Property and equipment, net	15,451		15,972
Total lease assets		$	782,304	$	867,962

Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	235,749	$	192,066
Finance	Current portion of borrowings and finance lease obligations	2,524		2,273
Noncurrent:
Operating	Long-term operating lease liabilities	659,118		714,079
Finance	Long-term debt and finance lease obligations	13,729		14,262
Total lease liabilities		$	911,120	$	922,680

Lease cost



		Three Months Ended				Six Months Ended
	Income Statement Location	Aug 1, 2020		Aug 3, 2019		Aug 1, 2020		Aug 3, 2019
Operating lease costs	Cost of product sales	$	50,005	$	58,749	$	105,374	$	117,565
Operating lease costs	Selling, general and administrative expenses	5,355		5,720		10,531		10,984
Finance lease costs
Amortization of leased assets^{1, 2}	Cost of product sales	20		44		32		87
Amortization of leased assets^{1, 2}	Selling, general and administrative expenses	474		637		1,338		1,180
Interest on lease liabilities	Interest expense	208		286		490		573
Variable lease costs³	Cost of product sales	13,209		25,083		27,557		49,908
Variable lease costs³	Selling, general and administrative expenses	638		628		1,217		1,455
Short-term lease costs	Cost of product sales	181		—		420		—
Short-term lease costs	Selling, general and administrative expenses	170		183		1,959		395
Total lease costs		$	70,260	$	91,330	$	148,918	$	182,147

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Notes:


¹	The Company has made certain reclassifications to prior period amounts to conform to the current period presentation.


²	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 income (loss).

During the three and six months ended August 1, 2020, variable lease costs included certain rent concessions received by the Company, primarily in Europe, related to the COVID-19 pandemic of approximately $7.7 million and $10.5 million, respectively. Refer to Note 1 for further information.

Operating lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of August 1, 2020 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2021¹	$	155,961	$	1,618	$	157,579
2022	207,825		3,904		211,729
2023	172,592		3,483		176,075
2024	144,021		3,260		147,281
2025	99,851		2,446		102,297
After 2025	201,665		5,229		206,894
Total lease payments	981,915		19,940		1,001,855
Less: Interest	87,048		3,687		90,735
Present value of lease liabilities	$	894,867	$	16,253	$	911,120

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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 six months ended August 1, 2020.

Finance lease liabilities maturity schedule

Maturities of the Company’s operating and finance lease liabilities as of August 1, 2020 are as follows (in thousands):



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2021¹	$	155,961	$	1,618	$	157,579
2022	207,825		3,904		211,729
2023	172,592		3,483		176,075
2024	144,021		3,260		147,281
2025	99,851		2,446		102,297
After 2025	201,665		5,229		206,894
Total lease payments	981,915		19,940		1,001,855
Less: Interest	87,048		3,687		90,735
Present value of lease liabilities	$	894,867	$	16,253	$	911,120

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Notes:

Other supplemental information

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



Lease Term and Discount Rate	Aug 1, 2020
Weighted-average remaining lease term (years)
Operating leases	5.7 years
Finance leases	5.9 years
Weighted-average discount rate
Operating leases	3.7%
Finance leases	7.0%



	Six Months Ended
Supplemental Cash Flow Information	Aug 1, 2020		Aug 3, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	70,890	$	124,687
New operating ROU assets obtained in exchange for lease liabilities	$	19,566	$	99,951