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Leases

12 Months Ended

Feb. 03, 2024

Leases [Abstract]

Leases

Leases

We lease certain retail stores, supply chain facilities, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and nonlease components for new and reassessed leases.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

Certain of our lease agreements require reimbursement of real estate taxes, common area maintenance, and insurance, as well as rental payments based on a percentage of retail sales over contractual levels, and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate to third parties. Our lease and sublease portfolio consists mainly of operating leases with CVS Pharmacy Inc. (CVS) for space within our stores.

Leases (millions)			Classification			February 3, 2024			January 28, 2023
Assets
Operating			Operating Lease Assets			$	3,362		$	2,657
Finance			Property and Equipment, Net (a)			1,470			1,673
Total leased assets						$	4,832		$	4,330
Liabilities
Current
Operating			Accrued and Other Current Liabilities			$	329		$	296
Finance			Current Portion of Long-term Debt and Other Borrowings			119			129
Noncurrent
Operating			Noncurrent Operating Lease Liabilities			3,279			2,638
Finance			Long-term Debt and Other Borrowings			1,894			1,943
Total lease liabilities						$	5,621		$	5,006

(a)Finance lease assets are recorded net of accumulated amortization of $743 million and $623 million as of February 3, 2024, and January 28, 2023, respectively.

Lease Cost (millions)			Classification			2023			2022			2021
Operating lease cost (a)			SG&A Expenses			$	550		$	467		$	387
Finance lease cost
Amortization of leased assets			Depreciation and Amortization (b)			136			133			127
Interest on lease liabilities			Net Interest Expense			71			68			68
Sublease income (c)			Other Revenue			(20)			(19)			(18)
Net lease cost						$	737		$	649		$	564

(a)2023, 2022, and 2021 include $115 million, $101 million, and $64 million, respectively, of short-term and variable lease costs.

(b)Supply chain-related amounts are included in Cost of Sales.

(c)Sublease income excludes rental income from owned properties of $49 million for each of 2023 and 2022, and $48 million in 2021, which is included in Other Revenue.

Maturity of Lease Liabilities			Operating			Finance
(millions)			Leases (a)			Leases (b)			Total
2024			$	469		$	186		$	655
2025			452			179			631
2026			437			181			618
2027			424			181			605
2028			395			183			578
Thereafter			2,579			1,743			4,322
Total lease payments			$	4,756		$	2,653		$	7,409
Less: Interest			1,148			640
Present value of lease liabilities			$	3,608		$	2,013

(a)Operating lease payments include $782 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $879 million of legally binding minimum lease payments for leases signed but not yet commenced.

(b)Finance lease payments include $226 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $449 million of legally binding minimum lease payments for leases signed but not yet commenced.

Lease Term and Discount Rate			February 3, 2024			January 28, 2023
Weighted average remaining lease term (years)
Operating leases			12.0			11.4
Finance leases			14.6			15.4
Weighted average discount rate
Operating leases			4.22		%	3.52		%
Finance leases			3.69		%	3.56		%

Other Information (millions)			2023			2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases			$	479		$	364		$	316
Operating cash flows from finance leases			70			63			64
Financing cash flows from finance leases			147			100			91

Leases

Leases

We lease certain retail stores, supply chain facilities, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and nonlease components for new and reassessed leases.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of leased assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

Certain of our lease agreements require reimbursement of real estate taxes, common area maintenance, and insurance, as well as rental payments based on a percentage of retail sales over contractual levels, and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate to third parties. Our lease and sublease portfolio consists mainly of operating leases with CVS Pharmacy Inc. (CVS) for space within our stores.

Leases (millions)			Classification			February 3, 2024			January 28, 2023
Assets
Operating			Operating Lease Assets			$	3,362		$	2,657
Finance			Property and Equipment, Net (a)			1,470			1,673
Total leased assets						$	4,832		$	4,330
Liabilities
Current
Operating			Accrued and Other Current Liabilities			$	329		$	296
Finance			Current Portion of Long-term Debt and Other Borrowings			119			129
Noncurrent
Operating			Noncurrent Operating Lease Liabilities			3,279			2,638
Finance			Long-term Debt and Other Borrowings			1,894			1,943
Total lease liabilities						$	5,621		$	5,006

(a)Finance lease assets are recorded net of accumulated amortization of $743 million and $623 million as of February 3, 2024, and January 28, 2023, respectively.

Lease Cost (millions)			Classification			2023			2022			2021
Operating lease cost (a)			SG&A Expenses			$	550		$	467		$	387
Finance lease cost
Amortization of leased assets			Depreciation and Amortization (b)			136			133			127
Interest on lease liabilities			Net Interest Expense			71			68			68
Sublease income (c)			Other Revenue			(20)			(19)			(18)
Net lease cost						$	737		$	649		$	564

(a)2023, 2022, and 2021 include $115 million, $101 million, and $64 million, respectively, of short-term and variable lease costs.

(b)Supply chain-related amounts are included in Cost of Sales.

(c)Sublease income excludes rental income from owned properties of $49 million for each of 2023 and 2022, and $48 million in 2021, which is included in Other Revenue.

Maturity of Lease Liabilities			Operating			Finance
(millions)			Leases (a)			Leases (b)			Total
2024			$	469		$	186		$	655
2025			452			179			631
2026			437			181			618
2027			424			181			605
2028			395			183			578
Thereafter			2,579			1,743			4,322
Total lease payments			$	4,756		$	2,653		$	7,409
Less: Interest			1,148			640
Present value of lease liabilities			$	3,608		$	2,013

(a)Operating lease payments include $782 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $879 million of legally binding minimum lease payments for leases signed but not yet commenced.

(b)Finance lease payments include $226 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $449 million of legally binding minimum lease payments for leases signed but not yet commenced.

Lease Term and Discount Rate			February 3, 2024			January 28, 2023
Weighted average remaining lease term (years)
Operating leases			12.0			11.4
Finance leases			14.6			15.4
Weighted average discount rate
Operating leases			4.22		%	3.52		%
Finance leases			3.69		%	3.56		%

Other Information (millions)			2023			2022			2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases			$	479		$	364		$	316
Operating cash flows from finance leases			70			63			64
Financing cash flows from finance leases			147			100			91

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- References

No definition available.

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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
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//842-20/tableOfContent

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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
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//842-20/tableOfContent

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