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Leases | 9 Months Ended
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Oct. 30, 2021
Leases [Abstract] |
Leases | 4. Leases We lease certain property and equipment used in our operations. Some of our store leases include additional rental payments based on a percentage of sales over contractual levels or which are adjusted periodically for inflation. Our typical store lease has an initial term of 20 to 25 years and four to eight five-year renewal options. Lease assets represent our right to use an underlying asset for the lease term. Lease assets are recognized at commencement date based on the value of the lease liability and are adjusted for any lease payments made to the lessor at or before commencement date, minus any lease incentives received and any initial direct costs incurred by the lessee. Lease liabilities represent our contractual obligation to make lease payments. At the commencement date, the lease liabilities equal the present value of minimum lease payments over the lease term. As the implicit interest rate is not readily identifiable in our leases, we estimate our collateralized borrowing rate to calculate the present value of lease payments. Leases with a term of 12 months or less are excluded from the balance; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and non-lease components for new and modified leases. We opened 200 Sephora shop-in-shops within our Kohl's stores in the fall of 2021. Due to the investments we made in the shop-in-shops, we reassessed our lease term when construction began as these assets will have significant economic value to us when the lease term becomes exercisable. The impact of these assessments resulted in additional lease term, additional lease assets and liabilities, and, in some cases, changes to the classification. The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements:
Consolidated Balance Sheets |  |
(Dollars in Millions) | Classification | October 30, 2021 | January 30, 2021
Assets |  |  |
Operating leases | Operating leases | $2,293 | $2,398
Finance leases | Property & equipment, net | 1,389 | 708
Total operating & finance leases |  | 3,682 | 3,106
Liabilities |  |  |
Current |  |  |
Operating leases | Current portion of operating leases | 142 | 161
Finance leases | Current portion of finance leases & financing obligations | 86 | 76
Noncurrent |  |  |
Operating leases | Operating leases | 2,537 | 2,625
Finance leases | Finance leases & financing obligations | 1,620 | 926
Total operating & finance leases |  | $4,385 | $3,788
Consolidated Statement of Operations | Three Months Ended | Nine Months Ended
(Dollars in Millions) | Classification | October 30, 2021 | October 30, 2021
Operating leases | Selling, general, and administrative | $71 | $227
Finance Leases |  |  |
Amortization of leased assets | Depreciation and amortization | 27 | 70
Interest on leased assets | Interest expense, net | 29 | 81
Total operating & finance leases |  | $127 | $378
Consolidated Statement of Cash Flows | Nine Months Ended
(Dollars in Millions) | October 30, 2021
Cash paid for amounts included in the measurement of leased liabilities |
Operating cash flows from operating leases | $236
Operating cash flows from finance leases | 81
Financing cash flows from finance leases | 71
The following table summarizes future lease payments by fiscal year:
| October 30, 2021
(Dollars in millions) | Operating Leases | Finance Leases | Total
2021 | $69 | $50 | $119
2022 | 289 | 193 | 482
2023 | 278 | 176 | 454
2024 | 247 | 161 | 408
2025 | 234 | 155 | 389
After 2025 | 3,541 | 2,685 | 6,226
Total lease payments | $4,658 | $3,420 | $8,078
Amount representing interest | (1,979) | (1,714) | (3,693)
Lease liabilities | $2,679 | $1,706 | $4,385
The following table summarizes weighted-average remaining lease term and discount rate:
| October 30, 2021 | January 30, 2021
Weighted-average remaining term (years) |  |
Operating leases | 20 | 19
Finance leases | 20 | 18
Weighted-average discount rate |  |
Operating leases | 6% | 6%
Finance leases | 7% | 10%
Other lease information is as follows:
| Nine Months Ended | Nine Months Ended
(Dollars in Millions) | October 30, 2021 | October 31, 2020
Property and equipment acquired through: |  |
Finance lease liabilities | $755 | $118
Operating lease liabilities | 8 | 140
Financing Obligations The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements:
Consolidated Balance Sheets |  |
(Dollars in millions) | Classification | October 30, 2021 | January 30, 2021
Assets |  |  |
Financing obligations | Property & equipment, net | $57 | $65
Liabilities |  |  |
Current | Current portion of finance leases & financing obligations | 31 | 39
Noncurrent | Finance leases & financing obligations | 452 | 461
Total financing obligations |  | $483 | $500
Consolidated Statement of Operations | Three Months Ended | Nine Months Ended
(Dollars in Millions) | Classification | October 30, 2021 | October 30, 2021
Amortization of financing obligation assets | Depreciation and amortization | 2 | 7
Interest on financing obligations | Interest expense, net | 11 | 30
Total financing obligations |  | $13 | $37
Consolidated Statement of Cash Flows | Nine Months Ended
(Dollars in Millions) | October 30, 2021
Cash paid for amounts included in the measurement of financing obligations |
Operating cash flows from financing obligations | $30
Financing cash flows from financing obligations | 25
Proceeds from financing obligations | 8
The following table summarizes future financing obligation payments by fiscal year:
| October 30, 2021
(Dollars in millions) | Financing Obligations
2021 | $16
2022 | 73
2023 | 71
2024 | 67
2025 | 58
After 2025 | 486
Total lease payments | $771
Non-cash gain on future sale of property | 207
Amount representing interest | (495)
Financing obligation liability | $483
The following table summarizes the weighted-average remaining term and discount rate for financing obligations:
| October 30, 2021 | January 30, 2021
Weighted-average remaining term (years) | 10 | 8
Weighted-average discount rate | 9% | 7%

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