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Leases | 3 Months Ended
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Apr. 30, 2022
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 an additional 48 Sephora shop-in-shops within our Kohl's stores during the first quarter of 2022, bringing the total number of Sephora shop-in-shops to 248. We plan to open an additional 352 shop-in-shops during the remainder of 2022, as well as 250 more in 2023. Due to the investments we are making 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 | April 30, 2022 | January 29, 2022 | May 1, 2021
Assets |  |  |  |
Operating leases | Operating leases | $2,224 | $2,248 | $2,392
Finance leases | Property and equipment, net | 1,883 | 1,442 | 792
Total operating and finance leases | 4,107 | 3,690 | 3,184
Liabilities |  |  |  |
Current |  |  |  |
Operating leases | Current portion of operating leases | 127 | 145 | 159
Finance leases | Current portion of finance leases and financing obligations | 82 | 87 | 74
Noncurrent |  |  |  |
Operating leases | Operating leases | 2,474 | 2,479 | 2,620
Finance leases | Finance leases and financing obligations | 2,140 | 1,688 | 1,019
Total operating and finance leases | $4,823 | $4,399 | $3,872
Consolidated Statement of Operations | Quarter Ended
(Dollars in Millions) | Classification | April 30, 2022 | May 1, 2021
Operating leases | Selling, general, and administrative | $69 | $77
Finance leases |  |  |
Amortization of leased assets | Depreciation and amortization | 29 | 20
Interest on leased assets | Interest expense, net | 32 | 25
Total operating and finance leases |  | $130 | $122
Consolidated Statement of Cash Flows | Quarter Ended
(Dollars in Millions) | April 30, 2022 | May 1, 2021
Cash paid for amounts included in the measurement of leased liabilities |  |
Operating cash flows from operating leases | $70 | $84
Operating cash flows from finance leases | 30 | 25
Financing cash flows from finance leases | 22 | 24
The following table summarizes future lease payments by fiscal year:
| April 30, 2022
(Dollars in millions) | Operating Leases | Finance Leases | Total
2022 | $195 | $146 | $341
2023 | 260 | 204 | 464
2024 | 235 | 195 | 430
2025 | 226 | 189 | 415
2026 | 219 | 188 | 407
After 2026 | 3,384 | 3,309 | 6,693
Total lease payments | $4,519 | $4,231 | $8,750
Amount representing interest | (1,918) | (2,009) | (3,927)
Lease liabilities | $2,601 | $2,222 | $4,823
The following table summarizes weighted-average remaining lease term and discount rate:
| April 30, 2022 | January 29, 2022
Weighted-average remaining term (years) |  |
Operating leases | 20 | 20
Finance leases | 20 | 20
Weighted-average discount rate |  |
Operating leases | 6% | 6%
Finance leases | 6% | 7%
Other lease information is as follows:
| Quarter Ended
(Dollars in Millions) | April 30, 2022 | May 1, 2021
Property and equipment acquired through exchange of: |  |
Finance lease liabilities | $472 | $106
Operating lease liabilities | 11 | 30
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 | April 30, 2022 | January 29, 2022 | May 1, 2021
Assets |  |  |  |
Financing obligations | Property and equipment, net | $53 | $55 | $62
Liabilities |  |  |  |
Current | Current portion of finance leases and financing obligations | 26 | 31 | 38
Noncurrent | Finance leases and financing obligations | 444 | 445 | 454
Total financing obligations | $470 | $476 | $492
Consolidated Statement of Operations | Quarter Ended
(Dollars in Millions) | Classification | April 30, 2022 | May 1, 2021
Amortization of financing obligation assets | Depreciation and amortization | 2 | 2
Interest on financing obligations | Interest expense, net | 12 | 9
Total financing obligations |  | $14 | $11
Consolidated Statement of Cash Flows | Quarter Ended
(Dollars in Millions) | April 30, 2022 | May 1, 2021
Cash paid for amounts included in the measurement of financing obligations |  |
Operating cash flows from financing obligations | $12 | $9
Financing cash flows from financing obligations | 7 | 9
Proceeds from financing obligations | 4 | —
The following table summarizes future financing obligation payments by fiscal year:
| April 30, 2022
(Dollars in millions) | Financing Obligations
2022 | $55
2023 | 73
2024 | 69
2025 | 64
2026 | 60
After 2026 | 648
Total lease payments | $969
Non-cash gain on future sale of property | 185
Amount representing interest | (684)
Financing obligation liability | $470
The following table summarizes the weighted-average remaining term and discount rate for financing obligations:
| April 30, 2022 | January 29, 2022
Weighted-average remaining term (years) | 12 | 10
Weighted-average discount rate | 11% | 9%

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