XML 46 R19.htm IDEA: XBRL DOCUMENT
v3.20.1

LEASES | 9 Months Ended
--- | ---
May 02, 2020
Leases [Abstract] |
LEASES | NOTE 11—LEASES The Company leases certain of its distribution centers, retail stores, office facilities, transportation equipment, and other operating equipment from third parties. Many of these leases include renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease assets and liabilities are as follows (in thousands):
Lease Type |  | Balance Sheet Location |  | May 2, 2020
Operating lease assets |  | Operating lease assets |  | $ | 984,039 |
Finance lease assets |  | Property and equipment, net |  | 134,357 |
Total lease assets |  |  |  | $ | 1,118,396 |
Operating liabilities |  | Current portion of operating lease liabilities |  | $ | 138,698 |
Finance liabilities |  | Current portion of long-term debt and finance lease liabilities |  | 14,221 |
Operating liabilities |  | Long-term operating lease liabilities |  | 877,229 |
Finance liabilities |  | Long-term finance lease liabilities |  | 145,672 |
Total lease liabilities |  |  |  | $ | 1,175,820 |
Lease assets and liabilities presented in the table above include lease contracts related to our discontinued operations, as the Company expects to remain primarily obligated under these leases. The Company’s lease cost under ASC 842 is as follows:
(in thousands) |  | Statement of Operations Location |  | 13-Week Period Ended |  | 39-Week Period Ended
| May 2, 2020 |  | May 2, 2020
Operating lease cost |  | Operating expenses(2) |  | $ | 62,928 |  |  | $ | 196,332 |
Short-term lease cost |  | Operating expenses |  | 8,021 |  |  | 20,010 |
Variable lease cost |  | Operating expenses(2) |  | 35,392 |  |  | 114,299 |
Sublease income |  | Operating expenses(2) |  | (7,836 | ) |  | (31,034 | )
Sublease income |  | Net sales |  | (5,991 | ) |  | (16,738 | )
Net operating lease cost(1) |  |  |  | 92,514 |  |  | 282,869 |
Amortization of leased assets |  | Operating expenses |  | 3,876 |  |  | 12,272 |
Interest on lease liabilities |  | Interest expense, net |  | 2,894 |  |  | 6,911 |
Finance lease cost |  |  |  | 6,770 |  |  | 19,183 |
Total net lease cost |  |  |  | $ | 99,284 |  |  | $ | 302,052 |
(1) | Rent expense as presented here includes $9.1 million and $33.5 million in the third quarter and year-to-date of fiscal 2020, respectively, of operating lease rent expense related to stores within discontinued operations, but for which GAAP requires the expense to be included within continuing operations, as the Company expects to remain primarily obligated under these leases. Rent expense as presented here also includes immaterial amounts of variable lease expense of discontinued operations.
(2) | Includes certain lease expense or income that is recorded within Restructuring, acquisition and integration related expenses for surplus, non-operating properties for which the Company is restructuring its obligations and which are not separately material.
The Company leases certain property to third parties and receives lease and subtenant rental payments under operating leases, including assigned leases for which the Company has future minimum lease payment obligations. Future minimum lease payments (“Lease Liabilities”) to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases have not been reduced for future minimum lease and subtenant rentals (“Lease Receipts”) under certain operating subleases, including lease assignments for stores sold to third parties, which they operate. As of May 2, 2020, these Lease Liabilities and Lease Receipts consisted of the following (in thousands):
Maturity of Lease Liabilities and Lease Receipts | Lease Liabilities |  | Lease Receipts |  | Net Lease Obligations
Fiscal Year | Operating Leases(1) |  | Finance Leases(2) |  | Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Remaining fiscal 2020 | $ | 62,422 |  |  | $ | 6,991 |  |  | $ | (14,801 | ) |  | $ | — |  |  | $ | 47,621 |  |  | $ | 6,991 |
2021 | 217,690 |  |  | 22,777 |  |  | (50,944 | ) |  | — |  |  | 166,746 |  |  | 22,777 |
2022 | 206,416 |  |  | 119,387 |  |  | (45,784 | ) |  | — |  |  | 160,632 |  |  | 119,387 |
2023 | 179,364 |  |  | 15,292 |  |  | (35,889 | ) |  | — |  |  | 143,475 |  |  | 15,292 |
2024 | 153,729 |  |  | 14,228 |  |  | (27,871 | ) |  | — |  |  | 125,858 |  |  | 14,228 |
Thereafter | 990,394 |  |  | 15,541 |  |  | (62,184 | ) |  | — |  |  | 928,210 |  |  | 15,541 |
Total undiscounted lease liabilities and receipts | $ | 1,810,015 |  |  | $ | 194,216 |  |  | $ | (237,473 | ) |  | $ | — |  |  | $ | 1,572,542 |  |  | $ | 194,216 |
Less interest (3) | (794,088 | ) |  | (34,323 | ) |  |  |  |  |  |  |  |
Present value of lease liabilities | 1,015,927 |  |  | 159,893 |  |  |  |  |  |  |  |  |
Less current lease liabilities | (138,698 | ) |  | (14,221 | ) |  |  |  |  |  |  |  |
Long-term lease liabilities | $ | 877,229 |  |  | $ | 145,672 |  |  |  |  |  |  |  |  |
(1) | Operating lease payments include $11.4 million related to extension options that are reasonably certain of being exercised and exclude $38.5 million of legally binding minimum lease payments for leases signed but not yet commenced.
(2) | Finance lease payments include $0.0 million related to extension options that are reasonably certain of being exercised and exclude $0.5 million of legally binding minimum lease payments for leases signed but not yet commenced. This table excludes payments related to a facility the Company is deemed the accounting owner, which is recognized as a residual obligation, and is subject to an underlying lease.
(3) | Calculated using the interest rate for each lease.
As of August 3, 2019, future minimum lease payments to be made by the Company or certain third parties in the case of assigned leases for noncancellable operating leases and finance leases, which have not been reduced for future minimum subtenant rentals under certain operating subleases, including assignments, consisted of the following amounts (in thousands):
|  | Lease Obligations |  | Lease Receipts |  | Net Lease Obligations
Fiscal Year |  | Operating Leases |  | Capital Leases |  | Operating Leases |  | Capital Leases |  | Operating Leases |  | Capital Leases
2020 |  | $ | 223,612 |  |  | $ | 41,550 |  |  | $ | (55,922 | ) |  | $ | (319 | ) |  | $ | 167,690 |  |  | $ | 41,231 |
2021 |  | 190,845 |  |  | 32,804 |  |  | (41,425 | ) |  | — |  |  | 149,420 |  |  | 32,804 |
2022 |  | 179,326 |  |  | 29,869 |  |  | (35,998 | ) |  | — |  |  | 143,328 |  |  | 29,869 |
2023 |  | 154,812 |  |  | 26,699 |  |  | (25,591 | ) |  | — |  |  | 129,221 |  |  | 26,699 |
2024 |  | 135,795 |  |  | 23,095 |  |  | (18,183 | ) |  | — |  |  | 117,612 |  |  | 23,095 |
Thereafter |  | 1,063,674 |  |  | 46,999 |  |  | (59,186 | ) |  | — |  |  | 1,004,488 |  |  | 46,999 |
Total future minimum obligations (receipts) |  | $ | 1,948,064 |  |  | $ | 201,016 |  |  | $ | (236,305 | ) |  | $ | (319 | ) |  | $ | 1,711,759 |  |  | $ | 200,697 |
Less interest |  |  |  | (68,138 | ) |  |  |  |  |  |  |  |
Present value of capital lease obligations |  |  |  | 132,878 |  |  |  |  |  |  |  |  |
Less current capital lease obligations |  |  |  | (24,670 | ) |  |  |  |  |  |  |  |
Long-term capital lease obligations |  |  |  | $ | 108,208 |  |  |  |  |  |  |  |  |
The following tables provide other information required by ASC 842:
Lease Term and Discount Rate |  | May 2, 2020
Weighted-average remaining lease term (years) |  |
Operating leases |  | 10.7 years |
Finance leases |  | 3.4 years |
Weighted-average discount rate |  |
Operating leases |  | 10.7 | %
Finance leases |  | 8.8 | %
Other Information |  | 39-Week Period Ended
(in thousands) |  | May 2, 2020
Cash paid for amounts included in the measurement of lease liabilities |  |
Operating cash flows from operating leases |  | $ | 166,441 |
Operating cash flows from finance leases |  | 6,181 |
Financing cash flows from finance leases |  | 17,183 |
Leased assets obtained in exchange for new finance lease liabilities |  | 92,843 |
Leased assets obtained in exchange for new operating lease liabilities |  | 154,888 |
On February 24, 2020, the Company executed a purchase option to acquire the real property of a distribution center facility. Upon execution of the purchase option, the previously constructed facility accounted for as an operating lease has been re-classified as a finance lease.

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 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