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Leases | 3 Months Ended
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Apr. 30, 2022
Leases |
Leases | NOTE 8—LEASES Lease costs—net consist of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | THREE MONTHS ENDED
​ | ​ | ​ | APRIL 30, |  | MAY 1,
​ | ​ | ​ | 2022 |  | 2021
​ | ​ | ​ | (in thousands)
Operating lease cost(1) | ​ |  | $ | 25,133 | ​ | $ | 23,567
Finance lease costs | ​ | ​ | ​ | ​ | ​ | ​ | ​
Amortization of leased assets(1) | ​ | ​ | ​ | 11,498 | ​ | ​ | 10,918
Interest on lease liabilities(2) | ​ | ​ | ​ | 7,071 | ​ | ​ | 6,150
Variable lease costs(3) | ​ | ​ | ​ | 9,087 | ​ | ​ | 8,427
Sublease income(4) | ​ | ​ | ​ | (1,128) | ​ | ​ | (1,182)
Total lease costs—net | ​ | ​ | $ | 51,661 | ​ | $ | 47,880
(1) | Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on our accounting policy. Refer to Note 3—Significant Accounting Policies in the 2021 Form 10-K.
(2) | Included in interest expense—net on the condensed consolidated statements of income.
(3) | Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $6.7 million and $6.3 million for the three months ended April 30, 2022 and May 1, 2021, respectively, and charges associated with common area maintenance of $2.4 million and $2.1 million for the three months ended April 30, 2022 and May 1, 2021, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in either period.
(4) | Included as an offset to selling, general and administrative expenses on the condensed consolidated statements of income.
Lease right-of-use assets and lease liabilities consist of the following: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | APRIL 30, | ​ | JANUARY 29,
​ | ​ | ​ |  | 2022 |  | 2022
​ | ​ | ​ | ​ | (in thousands)
​ | ​ | Balance Sheet Classification | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | Operating lease right-of-use assets | ​ | $ | 544,797 | ​ | $ | 551,045
Finance leases(1)(2) | ​ | Property and equipment—net | ​ | ​ | 918,605 | ​ | ​ | 784,327
Total lease right-of-use assets | ​ | ​ | ​ | $ | 1,463,402 | ​ | $ | 1,335,372
Liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current(3) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | Operating lease liabilities | ​ | $ | 74,309 | ​ | $ | 73,834
Finance leases | ​ | Other current liabilities | ​ | ​ | 15,982 | ​ | ​ | 15,511
Total lease liabilities—current | ​ | ​ | ​ | ​ | 90,291 | ​ | ​ | 89,345
Non-current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | Non-current operating lease liabilities | ​ | ​ | 533,074 | ​ | ​ | 540,513
Finance leases | ​ | Non-current finance lease liabilities | ​ | ​ | 594,728 | ​ | ​ | 560,550
Total lease liabilities—non-current | ​ | ​ | ​ | ​ | 1,127,802 | ​ | ​ | 1,101,063
Total lease liabilities | ​ | ​ | ​ | $ | 1,218,093 | ​ | $ | 1,190,408
(1) | Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.
(2) | Finance lease right-of-use assets are recorded net of accumulated amortization of $185 million and $174 million as of April 30, 2022 and January 29, 2022, respectively.
(3) | Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.
The maturities of lease liabilities are as follows as of April 30, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | OPERATING | ​ | FINANCE | ​ | ​
FISCAL YEAR | ​ | ​ |  | LEASES |  | LEASES |  | TOTAL
​ | ​ | ​ | ​ | (in thousands)
Remainder of fiscal 2022 | ​ | ​ | ​ | $ | 73,005 | ​ | $ | 34,056 | ​ | $ | 107,061
2023 | ​ | ​ | ​ | ​ | 91,430 | ​ | ​ | 45,762 | ​ | ​ | 137,192
2024 | ​ | ​ | ​ | ​ | 86,055 | ​ | ​ | 46,131 | ​ | ​ | 132,186
2025 | ​ | ​ | ​ | ​ | 84,275 | ​ | ​ | 47,338 | ​ | ​ | 131,613
2026 | ​ | ​ | ​ | ​ | 80,949 | ​ | ​ | 48,111 | ​ | ​ | 129,060
2027 | ​ | ​ | ​ | ​ | 76,416 | ​ | ​ | 49,052 | ​ | ​ | 125,468
Thereafter | ​ | ​ | ​ | ​ | 238,655 | ​ | ​ | 773,145 | ​ | ​ | 1,011,800
Total lease payments(1)(2) | ​ | ​ | ​ | ​ | 730,785 | ​ | ​ | 1,043,595 | ​ | ​ | 1,774,380
Less—imputed interest(3) | ​ | ​ | ​ | ​ | (123,402) | ​ | ​ | (432,885) | ​ | ​ | (556,287)
Present value of lease liabilities | ​ | ​ | ​ | $ | 607,383 | ​ | $ | 610,710 | ​ | $ | 1,218,093
(1) | Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $512 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of April 30, 2022, of which $17 million, $27 million, $33 million, $34 million, $33 million and $31 million will be paid in fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025, fiscal 2026 and fiscal 2027, respectively, and $337 million will be paid subsequent to fiscal 2027.
(2) | Excludes future commitments under short-term lease agreements of $0.9 million as of April 30, 2022.
(3) | Calculated using the discount rate for each lease at lease commencement.
Supplemental information related to leases consists of the following:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | THREE MONTHS ENDED
​ | ​ | ​ | APRIL 30, | ​ | MAY 1,
​ | ​ | ​ | 2022 | ​ | 2021
​ | ​ | ​ | (in thousands)
Weighted-average remaining lease term (years) | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | ​ | ​ | 8.9 | ​ | ​ | 9.5
Finance leases | ​ | ​ | ​ | 21.1 | ​ | ​ | 18.2
Weighted-average discount rate | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | ​ | ​ | 3.95% | ​ | ​ | 4.00%
Finance leases | ​ | ​ | ​ | 5.06% | ​ | ​ | 4.99%
​ Other information related to leases consists of the following:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | THREE MONTHS ENDED
​ | ​ | ​ | APRIL 30, | ​ | MAY 1,
​ | ​ | ​ | 2022 | ​ | 2021
​ | ​ | ​ | (in thousands)
Cash paid for amounts included in the measurement of lease liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating cash flows from operating leases | ​ | ​ | $ | (25,199) | ​ | $ | (25,456)
Operating cash flows from finance leases | ​ | ​ | ​ | (7,071) | ​ | ​ | (6,253)
Financing cash flows from finance leases | ​ | ​ | ​ | (3,559) | ​ | ​ | (3,671)
Total cash outflows from leases | ​ | ​ | $ | (35,829) | ​ | $ | (35,380)
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating leases | ​ | ​ | $ | 12,459 | ​ | $ | 103,088
Finance leases | ​ | ​ | ​ | 38,252 | ​ | ​ | 19,611
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