Annual report pursuant to Section 13 and 15(d)

Leases

v3.20.4
Leases
12 Months Ended
Dec. 27, 2020
Leases [Abstract]  
Lessee, Operating and Finance Leases Leases
Adoption of FASB Accounting Standards Update ("ASU") 2016-02
On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) ("Topic 842") along with related clarifications and improvements using the modified retrospective approach without application to prior periods. This guidance requires the recognition of liabilities for lease obligations and corresponding right of use assets on the balance sheet and disclosure of key information about leasing arrangements. We applied the practical expedients that do not require us to reassess existing contracts for embedded leases, to separate leases and non-lease components for our population of real estate assets, or to reassess lease classification or initial direct costs.
The effects of the changes made to our consolidated balance sheet as of December 30, 2018 as a result of the adoption of Topic 842 was as follows (in thousands):
Balance at December 30, 2018 Adjustments due to Topic 842 Balance at December 30, 2018
Balance Sheet
Non-current assets
Right of use assets, net $ —  $ 478,268  $ 478,268 
Prepaid expenses and other current assets 27,576  (6,592) 20,984 
Current liabilities
Current portion of lease obligations 786  40,606  41,392 
Non-current liabilities
Deferred rent 75,675  (75,675) — 
Long-term portion of lease obligations 9,414  506,745  516,159 
Stockholders' equity
Retained earnings $ 376,341  $ (15,172) $ 361,169 
Leases - Topic 842
Leases are included in right of use assets, net, current portion of lease obligations, and long-term portion of lease liabilities on our consolidated balance sheet as of December 27, 2020 and December 29, 2019 as follows (in thousands):
December 27, 2020 Finance Operating Total
Right of use assets, net $ 9,644  $ 415,929  $ 425,573 
Current portion of lease obligations 1,078  54,197  55,275 
Long-term portion of lease obligations 10,937  454,296  465,233 
Total $ 12,015  $ 508,493  $ 520,508 
December 29, 2019 Finance Operating Total
Right of use assets, net $ 7,552  $ 418,696  $ 426,248 
Current portion of lease obligations 725  41,974  42,699 
Long-term portion of lease obligations 8,822  456,613  465,435 
Total $ 9,547  $ 498,587  $ 508,134 
The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in Occupancy on our consolidated statements of operations and comprehensive loss as follows (in thousands):
Year Ended
December 27, 2020 December 29, 2019
Operating lease cost $ 67,320  $ 75,496 
Finance lease cost:
Amortization of right of use assets 845  793 
Interest on lease liabilities 534  544 
Total finance lease cost $ 1,379  $ 1,337 
Variable lease cost 24,482  29,300 
Total lease costs $ 93,181  $ 106,133 
Maturities of our lease liabilities as of December 27, 2020 were as follows (in thousands):
Finance Leases Operating Leases Total
2021 $ 1,581  $ 86,111  $ 87,692 
2022 1,314  75,885  77,199 
2023 1,244  73,457  74,701 
2024 1,264  71,368  72,632 
2025 1,283  66,520  67,803 
Thereafter 8,793  346,676  355,469 
Total future lease liability $ 15,479  $ 720,017  $ 735,496 
Less imputed interest 3,464  211,524  214,988 
Present value of lease liability $ 12,015  $ 508,493  $ 520,508 
Supplemental cash flow information in thousands (except other information) related to leases is as follows:
Year Ended
December 27, 2020 December 29, 2019
Cash flows from operating activities
Cash paid related to lease liabilities
Operating leases $ 47,164  $ 78,260 
Finance leases 534  512 
Cash flows from financing activities
Cash paid related to lease liabilities
Finance leases 270  817 
Cash paid for amounts included in the measurement of lease liabilities $ 47,968  $ 79,589 
Right of use assets obtained in exchange for operating lease obligations $ 56,014  $ 12,580 
Right of use assets obtained in exchange for finance lease obligations $ 2,918  $ 1,606 
Other information related to operating leases as follows:
Weighted average remaining lease term 10.24 years 10.70 years
Weighted average discount rate 6.90  % 7.38  %
Other information related to financing leases as follows:
Weighted average remaining lease term 11.76 years 12.37 years
Weighted average discount rate 4.56  % 4.90  %