Leases

3 Months Ended

Mar. 24, 2019

11. Leases

The Company leases certain retail store and supply chain center locations, supply chain vehicles and its corporate headquarters with expiration dates through 2034.

The components of operating and finance lease cost for the first quarter of 2019 were as follows:


	Fiscal Quarter Ended
	March 24, 2019
Operating lease cost	$	10,796
Finance lease cost:
Amortization of right-of-use assets		254
Interest on lease liabilities		479

Total finance lease cost	$	733

Rent expense totaled $16.4 million and $15.4 million in the first quarter of 2019 and 2018, respectively, and includes operating lease cost, as well as expense for

non-lease

components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals.

Supplemental balance sheet information related to the Company’s finance leases as of March 24, 2019 and December 30, 2018 was as follows:


	March 24, 2019			December 30, 2018
Land and buildings	$	22,182		$	22,171
Accumulated depreciation and amortization		(6,932	)		(6,678	)

Finance lease assets, net	$	15,250		$	15,493

Current portion of long-term debt	$	659		$	643
Long-term debt, less current portion		16,202			16,363

Total principal payable on finance leases	$	16,861		$	17,006


	Operating Leases			Finance Leases
Weighted average remaining lease term		7 years			14 years
Weighted average discount rate		4.1	%		11.3	%

Supplemental cash flow information related to leases for the first quarter of 2019 was as follows:


	Fiscal Quarter Ended
	March 24, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	10,690
Operating cash flows from finance leases		479
Financing cash flows from finance leases		155
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		12,977
Finance leases		—

During the first quarter of 2018, the Company renewed the lease of a supply chain center building and extended the term of the lease through 2033. As a result of the lease renewal, the Company recorded

non-cash

financing activities of $2.6 million for the increase in finance lease assets and liabilities during the first quarter of 2018.

Maturities of lease liabilities as of March 24, 2019 were as follows:


	Operating Leases			Finance Leases
2019, excluding the quarter ended March 24, 2019	$	29,314		$	1,799
2020		38,791			2,416
2021		35,915			2,434
2022		32,545			2,452
2023		29,188			2,475
Thereafter		107,039			23,792

Total future minimum rental commitments		272,792			35,368
Less – amounts representing interest		(42,531	)		(18,507	)

Total lease liabilities	$	230,261		$	16,861

Maturities of lease liabilities as of December 30, 2018 were as follows:


	Operating Leases		Finance Leases
2019	$	40,752	$	2,396
2020		37,519		2,415
2021		34,538		2,433
2022		30,763		2,451
2023		27,388		2,474
Thereafter		100,310		23,781

Total future minimum rental commitments	$	271,270		35,950

Less – amounts representing interest				(18,944	)

Total principal payable on finance leases			$	17,006

As of March 24, 2019, the Company has additional operating leases for supply chain center tractors and trailers and a new office building being constructed by the Company’s landlord that had not yet commenced with estimated future minimum rental commitments of approximately $43.0 million. The Company has also entered into an additional finance lease for a supply chain center that had not yet commenced with estimated future minimum rental commitments of approximately $28.7 million. These leases are expected to commence in 2019 with lease terms of up to 15 years. These undiscounted amounts are not included in the tables above.

The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees is $2.3 million and $2.4 million as of March 24, 2019 and December 30, 2018, respectively. We believe that none of these arrangements has or is likely to have a material effect on our results of operations, financial condition, revenues or expenses, capital expenditures or liquidity.