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Property and Leases | 9 Months Ended
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Nov. 03, 2019
Leases [Abstract] |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $21.7 billion as of November 3, 2019 and $20.6 billion as of February 3, 2019. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. While most of these leases are operating leases, certain retail locations and equipment are leased under finance leases. We consider various factors such as market conditions and the terms of any renewal options that may exist to determine whether we will renew or replace the lease. A substantial majority of our leases have remaining lease terms of one to 20 years, typically with the option to extend the leases for up to five years. Some of our leases may include the option to terminate in less than five years. In the event we are reasonably certain to exercise the option to extend a lease, we will include the extended terms in the related lease assets and liabilities. Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased property are generally our obligations under the lease agreements. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Further, certain lease agreements include rental payments based on an index or rate and others include rental payments based on a percentage of sales. The consolidated balance sheet location of assets and liabilities related to operating and finance leases follow.
in millions | Consolidated Balance Sheet Caption | November 3, 2019
Assets: |  |
Operating lease assets | Operating lease right-of-use assets | $ | 5,638 |
Finance lease assets | Net property and equipment | 876 |
Total lease assets |  | $ | 6,514 |
Liabilities: |  |
Current: |  |
Operating lease liabilities | Current operating lease liabilities | $ | 828 |
Finance lease liabilities | Current installments of long-term debt | 69 |
Long-term: |  |
Operating lease liabilities | Long-term operating lease liabilities | 5,113 |
Finance lease liabilities | Long-term debt, excluding current installments | 1,035 |
Total lease liabilities |  | $ | 7,045 |
The components of lease cost follow.
in millions | Consolidated Statement of Earnings Caption | Three Months Ended November 3, 2019 |  | Nine Months Ended November 3, 2019
Operating lease cost | Selling, general and administrative | $ | 211 |  |  | $ | 626 |
Finance lease cost: |  |  |  |
Amortization of leased assets | Depreciation and amortization | 21 |  |  | 64 |
Interest on lease liabilities | Interest expense | 23 |  |  | 69 |
Short-term lease cost | Selling, general and administrative | 30 |  |  | 73 |
Variable lease cost | Selling, general and administrative | 53 |  |  | 175 |
Sublease income | Selling, general and administrative | (3 | ) |  | (10 | )
Net lease cost |  | $ | 335 |  |  | $ | 997 |
ASU 2016-02 requires that public companies use a secured incremental borrowing rate as the discount rate for the present value of lease payments when the rate implicit in the contract is not readily determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow.
| November 3, 2019
Weighted Average Remaining Lease Term (Years): |
Operating leases | 10 |
Finance leases | 13 |
Weighted Average Discount Rate: |
Operating leases | 3.1 | %
Finance leases | 10.9 | %
The approximate future minimum lease payments under operating and finance leases at November 3, 2019 follow.
in millions | Operating Leases |  | Finance Leases
Fiscal 2019 | $ | 239 |  |  | $ | 40 |
Fiscal 2020 | 953 |  |  | 156 |
Fiscal 2021 | 845 |  |  | 154 |
Fiscal 2022 | 745 |  |  | 153 |
Fiscal 2023 | 650 |  |  | 147 |
Thereafter | 3,274 |  |  | 1,074 |
Total lease payments | 6,706 |  |  | 1,724 |
Less imputed interest | 765 |  |  | 620 |
Present value of lease liabilities | $ | 5,941 |  |  | $ | 1,104 |
————— Note: Amounts presented do not include payments relating to immaterial leases excluded from the consolidated balance sheets as part of transition elections adopted upon implementation of Topic 842. Additionally, we have excluded approximately $1.6 billion of leases (undiscounted basis) that have not yet commenced. These leases will commence between 2019 and 2020 with lease terms of one to 20 years. The approximate future minimum lease payments under capital and operating leases at February 3, 2019 and accounted for under previous lease guidance follow.
in millions | Operating Leases |  | Capital Leases
Fiscal 2019 | $ | 976 |  |  | $ | 150 |
Fiscal 2020 | 912 |  |  | 167 |
Fiscal 2021 | 792 |  |  | 143 |
Fiscal 2022 | 682 |  |  | 142 |
Fiscal 2023 | 584 |  |  | 137 |
Thereafter | 3,090 |  |  | 970 |
| $ | 7,036 |  |  | 1,709 |
Less imputed interest |  |  | 660 |
Net present value of capital lease obligations |  |  | 1,049 |
Less current installments |  |  | 57 |
Long-term capital lease obligations, excluding current installments |  |  | $ | 992 |
Other lease information follows.
in millions | Nine Months Ended November 3, 2019
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows – operating leases | $ | 750 |
Operating cash flows – finance leases | 69 |
Financing cash flows – finance leases | 46 |
Leased assets obtained in exchange for new operating lease liabilities | 589 |
Leased assets obtained in exchange for new finance lease liabilities | 101 |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $21.7 billion as of November 3, 2019 and $20.6 billion as of February 3, 2019. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. While most of these leases are operating leases, certain retail locations and equipment are leased under finance leases. We consider various factors such as market conditions and the terms of any renewal options that may exist to determine whether we will renew or replace the lease. A substantial majority of our leases have remaining lease terms of one to 20 years, typically with the option to extend the leases for up to five years. Some of our leases may include the option to terminate in less than five years. In the event we are reasonably certain to exercise the option to extend a lease, we will include the extended terms in the related lease assets and liabilities. Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased property are generally our obligations under the lease agreements. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Further, certain lease agreements include rental payments based on an index or rate and others include rental payments based on a percentage of sales. The consolidated balance sheet location of assets and liabilities related to operating and finance leases follow.
in millions | Consolidated Balance Sheet Caption | November 3, 2019
Assets: |  |
Operating lease assets | Operating lease right-of-use assets | $ | 5,638 |
Finance lease assets | Net property and equipment | 876 |
Total lease assets |  | $ | 6,514 |
Liabilities: |  |
Current: |  |
Operating lease liabilities | Current operating lease liabilities | $ | 828 |
Finance lease liabilities | Current installments of long-term debt | 69 |
Long-term: |  |
Operating lease liabilities | Long-term operating lease liabilities | 5,113 |
Finance lease liabilities | Long-term debt, excluding current installments | 1,035 |
Total lease liabilities |  | $ | 7,045 |
The components of lease cost follow.
in millions | Consolidated Statement of Earnings Caption | Three Months Ended November 3, 2019 |  | Nine Months Ended November 3, 2019
Operating lease cost | Selling, general and administrative | $ | 211 |  |  | $ | 626 |
Finance lease cost: |  |  |  |
Amortization of leased assets | Depreciation and amortization | 21 |  |  | 64 |
Interest on lease liabilities | Interest expense | 23 |  |  | 69 |
Short-term lease cost | Selling, general and administrative | 30 |  |  | 73 |
Variable lease cost | Selling, general and administrative | 53 |  |  | 175 |
Sublease income | Selling, general and administrative | (3 | ) |  | (10 | )
Net lease cost |  | $ | 335 |  |  | $ | 997 |
ASU 2016-02 requires that public companies use a secured incremental borrowing rate as the discount rate for the present value of lease payments when the rate implicit in the contract is not readily determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow.
| November 3, 2019
Weighted Average Remaining Lease Term (Years): |
Operating leases | 10 |
Finance leases | 13 |
Weighted Average Discount Rate: |
Operating leases | 3.1 | %
Finance leases | 10.9 | %
The approximate future minimum lease payments under operating and finance leases at November 3, 2019 follow.
in millions | Operating Leases |  | Finance Leases
Fiscal 2019 | $ | 239 |  |  | $ | 40 |
Fiscal 2020 | 953 |  |  | 156 |
Fiscal 2021 | 845 |  |  | 154 |
Fiscal 2022 | 745 |  |  | 153 |
Fiscal 2023 | 650 |  |  | 147 |
Thereafter | 3,274 |  |  | 1,074 |
Total lease payments | 6,706 |  |  | 1,724 |
Less imputed interest | 765 |  |  | 620 |
Present value of lease liabilities | $ | 5,941 |  |  | $ | 1,104 |
————— Note: Amounts presented do not include payments relating to immaterial leases excluded from the consolidated balance sheets as part of transition elections adopted upon implementation of Topic 842. Additionally, we have excluded approximately $1.6 billion of leases (undiscounted basis) that have not yet commenced. These leases will commence between 2019 and 2020 with lease terms of one to 20 years. The approximate future minimum lease payments under capital and operating leases at February 3, 2019 and accounted for under previous lease guidance follow.
in millions | Operating Leases |  | Capital Leases
Fiscal 2019 | $ | 976 |  |  | $ | 150 |
Fiscal 2020 | 912 |  |  | 167 |
Fiscal 2021 | 792 |  |  | 143 |
Fiscal 2022 | 682 |  |  | 142 |
Fiscal 2023 | 584 |  |  | 137 |
Thereafter | 3,090 |  |  | 970 |
| $ | 7,036 |  |  | 1,709 |
Less imputed interest |  |  | 660 |
Net present value of capital lease obligations |  |  | 1,049 |
Less current installments |  |  | 57 |
Long-term capital lease obligations, excluding current installments |  |  | $ | 992 |
Other lease information follows.
in millions | Nine Months Ended November 3, 2019
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows – operating leases | $ | 750 |
Operating cash flows – finance leases | 69 |
Financing cash flows – finance leases | 46 |
Leased assets obtained in exchange for new operating lease liabilities | 589 |
Leased assets obtained in exchange for new finance lease liabilities | 101 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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