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Leases
 9 Months Ended
Jul. 02, 2021
Leases [Abstract]  
Leases Leases
The Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction contracts, IT assets and vehicles. The Company’s leases have remaining lease terms of one year to thirteen years. The Company’s lease obligations are primarily for the use of office space and are primarily operating leases. Certain of the Company’s leases contain renewal, extension, or termination options. The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term. The Company generally considers the base term to be the term provided in the contract. None of the Company’s lease agreements contain material options to purchase the lease property, material residual value guarantees, or material restrictions or covenants
Long-term project asset and vehicle leases (leases with terms greater than twelve months), along with all real estate and IT asset leases, are recorded on the consolidated balance sheet at the present value of the minimum lease payments not yet paid, net of impairments taken. Because the Company primarily acts as a lessee and the rates implicit in its leases are not readily determinable, the Company generally uses its incremental borrowing rate on the lease commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the right-of-use ("ROU") asset and lease liability and are initially measured using the index or rate at the lease commencement date. Other variable lease payments, such as payments based on use and for property taxes, insurance, or common area maintenance that are based on actual assessments are excluded from the ROU asset and lease liability and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions.
Certain lease contracts contain nonlease components such as maintenance and utilities. The Company has made an accounting policy election, as allowed under ASC 842-10-15-37 and discussed above, to capitalize both the lease component and nonlease components of its contracts as a single lease component for all of its right-of-use assets.
Short-term project asset and vehicle leases (project asset and vehicle leases with an initial term of twelve months or less or leases that are cancellable by the lessee and lessor without significant penalties) are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects. These leases are entered into at agreed upon hourly, daily, weekly or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months.
The components of lease expense (reflected in selling, general and administrative expenses) for the three and nine months ended July 2, 2021 and June 26, 2020 were as follows (in thousands):
Three Months EndedNine Months Ended
July 2, 2021June 26, 2020July 2, 2021June 26, 2020
Lease cost
Operating lease cost$41,619 $39,123 $121,870 $126,855 
Variable lease cost7,836 9,508 23,255 26,307 
Sublease income(2,493)(3,504)(9,422)(10,688)
Total lease cost$46,962 $45,127 $135,703 $142,474 
Supplemental information related to the Company's leases for the nine months ended July 2, 2021 was as follows (in thousands):
Nine Months Ended
Cash paid for amounts included in the measurements of lease liabilities$151,250
Right-of-use assets obtained in exchange for new operating lease liabilities$153,102
Weighted average remaining lease term - operating leases7 years
Weighted average discount rate - operating leases2.6%
Total remaining lease payments under the Company's leases for the remainder of fiscal 2021 and for the succeeding years is as follows (in thousands):
Fiscal YearOperating Leases
2021$51,889 
2022188,702 
2023165,798 
2024148,289 
2025127,528 
Thereafter385,094 
1,067,300 
Less Interest(100,000)
$967,300 
Leases Leases
The Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction contracts, IT assets and vehicles. The Company’s leases have remaining lease terms of one year to thirteen years. The Company’s lease obligations are primarily for the use of office space and are primarily operating leases. Certain of the Company’s leases contain renewal, extension, or termination options. The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term. The Company generally considers the base term to be the term provided in the contract. None of the Company’s lease agreements contain material options to purchase the lease property, material residual value guarantees, or material restrictions or covenants
Long-term project asset and vehicle leases (leases with terms greater than twelve months), along with all real estate and IT asset leases, are recorded on the consolidated balance sheet at the present value of the minimum lease payments not yet paid, net of impairments taken. Because the Company primarily acts as a lessee and the rates implicit in its leases are not readily determinable, the Company generally uses its incremental borrowing rate on the lease commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the right-of-use ("ROU") asset and lease liability and are initially measured using the index or rate at the lease commencement date. Other variable lease payments, such as payments based on use and for property taxes, insurance, or common area maintenance that are based on actual assessments are excluded from the ROU asset and lease liability and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions.
Certain lease contracts contain nonlease components such as maintenance and utilities. The Company has made an accounting policy election, as allowed under ASC 842-10-15-37 and discussed above, to capitalize both the lease component and nonlease components of its contracts as a single lease component for all of its right-of-use assets.
Short-term project asset and vehicle leases (project asset and vehicle leases with an initial term of twelve months or less or leases that are cancellable by the lessee and lessor without significant penalties) are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects. These leases are entered into at agreed upon hourly, daily, weekly or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months.
The components of lease expense (reflected in selling, general and administrative expenses) for the three and nine months ended July 2, 2021 and June 26, 2020 were as follows (in thousands):
Three Months EndedNine Months Ended
July 2, 2021June 26, 2020July 2, 2021June 26, 2020
Lease cost
Operating lease cost$41,619 $39,123 $121,870 $126,855 
Variable lease cost7,836 9,508 23,255 26,307 
Sublease income(2,493)(3,504)(9,422)(10,688)
Total lease cost$46,962 $45,127 $135,703 $142,474 
Supplemental information related to the Company's leases for the nine months ended July 2, 2021 was as follows (in thousands):
Nine Months Ended
Cash paid for amounts included in the measurements of lease liabilities$151,250
Right-of-use assets obtained in exchange for new operating lease liabilities$153,102
Weighted average remaining lease term - operating leases7 years
Weighted average discount rate - operating leases2.6%
Total remaining lease payments under the Company's leases for the remainder of fiscal 2021 and for the succeeding years is as follows (in thousands):
Fiscal YearOperating Leases
2021$51,889 
2022188,702 
2023165,798 
2024148,289 
2025127,528 
Thereafter385,094 
1,067,300 
Less Interest(100,000)
$967,300