XML 55 R10.htm IDEA: XBRL DOCUMENT
v3.20.1

Property and Leases | 3 Months Ended
--- | ---
May 03, 2020
Leases [Abstract] |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $22.4 billion as of May 3, 2020 and $22.1 billion as of February 2, 2020. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. 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. Certain of our property lease agreements contain residual value guarantees which generally become due at the expiration of the lease term and are estimated as the greater of the fair value of the leased asset or a set minimum value. These residual value guarantees are primarily related to leases of facilities whose construction was funded by industrial revenue bonds. Our lease agreements do not contain any 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 | May 3, 2020 |  | February 2, 2020
Assets: |  |  |  |
Operating lease assets | Operating lease right-of-use assets | $ | 5,634 |  |  | $ | 5,595 |
Finance lease assets (1) | Net property and equipment | 1,191 |  |  | 934 |
Total lease assets |  | $ | 6,825 |  |  | $ | 6,529 |
Liabilities: |  |  |  |
Current: |  |  |  |
Operating lease liabilities | Current operating lease liabilities | $ | 853 |  |  | $ | 828 |
Finance lease liabilities | Current installments of long-term debt | 99 |  |  | 84 |
Long-term: |  |  |  |
Operating lease liabilities | Long-term operating lease liabilities | 5,075 |  |  | 5,066 |
Finance lease liabilities | Long-term debt, excluding current installments | 1,326 |  |  | 1,081 |
Total lease liabilities |  | $ | 7,353 |  |  | $ | 7,059 |
————— (1) Finance lease assets are recorded net of accumulated amortization of $670 million as of May 3, 2020 and $644 million as of February 2, 2020. The components of lease cost follow:
|  | Three Months Ended |  |  |  |  |  |
in millions | Consolidated Statement of Earnings Caption | May 3, 2020 |  | May 5, 2019 |  |  |  |
Operating lease cost | Selling, general and administrative | $ | 195 |  |  | $ | 210 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets | Depreciation and amortization | 31 |  |  | 21 |  |  |  |  |
Interest on lease liabilities | Interest expense | 26 |  |  | 23 |  |  |  |  |
Short-term lease cost | Selling, general and administrative | 18 |  |  | 25 |  |  |  |  |
Variable lease cost | Selling, general and administrative | 61 |  |  | 58 |  |  |  |  |
Sublease income | Selling, general and administrative | (3) |  |  | (3) |  |  |  |  |
Net lease cost |  | $ | 328 |  |  | $ | 334 |  |  |  |  |
When the rate implicit in the contract is not readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow:
| May 3, 2020 |  | February 2, 2020
Weighted Average Remaining Lease Term (Years): |  |  |
Operating leases | 10 |  | 10
Finance leases | 13 |  | 12
Weighted Average Discount Rate: |  |  |
Operating leases | 3.0 | % |  | 3.1 | %
Finance leases | 8.9 | % |  | 10.4 | %
The approximate future minimum lease payments under operating and finance leases as of May 3, 2020 follow:
in millions | Operating Leases |  | Finance Leases
Fiscal 2020 | $ | 728 |  |  | $ | 145 |
Fiscal 2021 | 901 |  |  | 194 |
Fiscal 2022 | 795 |  |  | 193 |
Fiscal 2023 | 698 |  |  | 187 |
Fiscal 2024 | 601 |  |  | 170 |
Thereafter | 2,964 |  |  | 1,189 |
Total lease payments | 6,687 |  |  | 2,078 |
Less imputed interest | 759 |  |  | 653 |
Present value of lease liabilities | $ | 5,928 |  |  | $ | 1,425 |
————— Note: Amounts presented do not include payments relating to immaterial leases excluded from the Consolidated Balance Sheets. Additionally, future minimum lease payments do not include approximately $1.4 billion of leases (undiscounted basis) that have not yet commenced. These leases will commence between fiscal 2020 and fiscal 2021 with lease terms of one to 20 years. Other lease information follows:
| Three Months Ended |  |
in millions | May 3, 2020 |  | May 5, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows - operating leases | $ | 253 |  |  | $ | 249 |
Operating cash flows - finance leases | 26 |  |  | 23 |
Financing cash flows - finance leases | 27 |  |  | 14 |
Lease assets obtained in exchange for new operating lease liabilities | 294 |  |  | 166 |
Lease assets obtained in exchange for new finance lease liabilities | 306 |  |  | 1 |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $22.4 billion as of May 3, 2020 and $22.1 billion as of February 2, 2020. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. 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. Certain of our property lease agreements contain residual value guarantees which generally become due at the expiration of the lease term and are estimated as the greater of the fair value of the leased asset or a set minimum value. These residual value guarantees are primarily related to leases of facilities whose construction was funded by industrial revenue bonds. Our lease agreements do not contain any 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 | May 3, 2020 |  | February 2, 2020
Assets: |  |  |  |
Operating lease assets | Operating lease right-of-use assets | $ | 5,634 |  |  | $ | 5,595 |
Finance lease assets (1) | Net property and equipment | 1,191 |  |  | 934 |
Total lease assets |  | $ | 6,825 |  |  | $ | 6,529 |
Liabilities: |  |  |  |
Current: |  |  |  |
Operating lease liabilities | Current operating lease liabilities | $ | 853 |  |  | $ | 828 |
Finance lease liabilities | Current installments of long-term debt | 99 |  |  | 84 |
Long-term: |  |  |  |
Operating lease liabilities | Long-term operating lease liabilities | 5,075 |  |  | 5,066 |
Finance lease liabilities | Long-term debt, excluding current installments | 1,326 |  |  | 1,081 |
Total lease liabilities |  | $ | 7,353 |  |  | $ | 7,059 |
————— (1) Finance lease assets are recorded net of accumulated amortization of $670 million as of May 3, 2020 and $644 million as of February 2, 2020. The components of lease cost follow:
|  | Three Months Ended |  |  |  |  |  |
in millions | Consolidated Statement of Earnings Caption | May 3, 2020 |  | May 5, 2019 |  |  |  |
Operating lease cost | Selling, general and administrative | $ | 195 |  |  | $ | 210 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets | Depreciation and amortization | 31 |  |  | 21 |  |  |  |  |
Interest on lease liabilities | Interest expense | 26 |  |  | 23 |  |  |  |  |
Short-term lease cost | Selling, general and administrative | 18 |  |  | 25 |  |  |  |  |
Variable lease cost | Selling, general and administrative | 61 |  |  | 58 |  |  |  |  |
Sublease income | Selling, general and administrative | (3) |  |  | (3) |  |  |  |  |
Net lease cost |  | $ | 328 |  |  | $ | 334 |  |  |  |  |
When the rate implicit in the contract is not readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow:
| May 3, 2020 |  | February 2, 2020
Weighted Average Remaining Lease Term (Years): |  |  |
Operating leases | 10 |  | 10
Finance leases | 13 |  | 12
Weighted Average Discount Rate: |  |  |
Operating leases | 3.0 | % |  | 3.1 | %
Finance leases | 8.9 | % |  | 10.4 | %
The approximate future minimum lease payments under operating and finance leases as of May 3, 2020 follow:
in millions | Operating Leases |  | Finance Leases
Fiscal 2020 | $ | 728 |  |  | $ | 145 |
Fiscal 2021 | 901 |  |  | 194 |
Fiscal 2022 | 795 |  |  | 193 |
Fiscal 2023 | 698 |  |  | 187 |
Fiscal 2024 | 601 |  |  | 170 |
Thereafter | 2,964 |  |  | 1,189 |
Total lease payments | 6,687 |  |  | 2,078 |
Less imputed interest | 759 |  |  | 653 |
Present value of lease liabilities | $ | 5,928 |  |  | $ | 1,425 |
————— Note: Amounts presented do not include payments relating to immaterial leases excluded from the Consolidated Balance Sheets. Additionally, future minimum lease payments do not include approximately $1.4 billion of leases (undiscounted basis) that have not yet commenced. These leases will commence between fiscal 2020 and fiscal 2021 with lease terms of one to 20 years. Other lease information follows:
| Three Months Ended |  |
in millions | May 3, 2020 |  | May 5, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows - operating leases | $ | 253 |  |  | $ | 249 |
Operating cash flows - finance leases | 26 |  |  | 23 |
Financing cash flows - finance leases | 27 |  |  | 14 |
Lease assets obtained in exchange for new operating lease liabilities | 294 |  |  | 166 |
Lease assets obtained in exchange for new finance lease liabilities | 306 |  |  | 1 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration