XML 88 R17.htm IDEA: XBRL DOCUMENT
v3.19.3

Leases | 9 Months Ended
--- | ---
Sep. 29, 2019
Leases [Abstract] |
Leases | 9.Leases The Company leases office and warehouse space, machinery and other equipment under noncancelable operating lease agreements and also leases certain warehouse space under financing lease agreements. The Company adopted the lease standard using the optional transition method on December 31, 2018, the transition date, and elected to adopt the following practical expedients as accounting policy upon initial adoption of the lease standard:
• | Short-term lease exception: Allows the Company to not recognize leases with a contractual term of less than 12 months on its condensed consolidated balance sheets.
• | Election to not separate non-lease components: Allows the Company to not separate lease and non-lease components and to account for both components as a single component, recognized on its condensed consolidated balance sheets.
• | Package of practical expedients for transition: Allows the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) any initial direct costs for any existing leases as of the transition date.
• | Additional transition method/relief: Allows the Company to apply the transition requirements in the lease standard as of the transition date, with any impact of initially applying the lease standard recognized as a cumulative effect adjustment to retained earnings in the period of adoption. This also requires the Company to maintain previous disclosure requirements for comparative periods.
Upon adoption of the lease standard on December 31, 2018, the Company recorded right of use assets for operating leases of $88.0 million and associated lease liabilities of $88.2 million. The adoption of the lease standard did not change previously reported condensed consolidated statements of operations, did not result in a cumulative effect adjustment to retained earnings in the period of adoption and did not impact cash flows. The Company used the following policies and assumptions to evaluate its population of leases:
• | Determining a lease: The Company assesses contracts at inception to determine whether an arrangement is or includes a lease, which conveys the Company’s right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right of use assets and associated liabilities are recognized at the commencement date and initially measured based on the present value of lease payments over the defined lease term.
• | Allocating lease and non-lease components: The Company has elected the practical expedient to not separate lease and non-lease components for certain classes of underlying assets. The Company has equipment and vehicle lease agreements, which generally have the lease and associated non-lease components accounted for as a single lease component. The Company has real estate lease agreements with lease and non-lease components, which are generally accounted for separately where applicable.
• | Discount rate: The Company calculates the discount rate based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company calculates an incremental borrowing rate using a portfolio approach. The incremental borrowing rate is calculated using the contractual lease term and the Company’s borrowing rate.
• | Lease term: The Company does not recognize leases with a contractual term of less than 12 months on its condensed consolidated balance sheets. Lease expense for these short-term leases is expensed on a straight-line basis over the lease term.
• | Rent increases or escalation clauses: Certain leases contain scheduled rent increases or escalation clauses, which can be based on the CPI or other rates. The Company assesses each contract individually and applies the appropriate variable payments based on the terms of the agreement.
• | Renewal options and/or purchase options: Certain leases include renewal options to extend the lease term and/or purchase options to purchase the leased asset. The Company assesses these options using a threshold of reasonably certain, which is a high threshold and, therefore, the majority of the Company’s leases do not include renewal periods or purchase options for the measurement of the right of use asset and the associated lease liability. For leases the Company is reasonably certain to renew or purchase, those options are included within the lease term and, therefore, included in the measurement of the right of use asset and the associated lease liability.
• | Option to terminate: Certain leases include the option to terminate the lease prior to its scheduled expiration. This allows a contractually bound party to terminate its obligation under the lease contract, typically in return for an agreed-upon financial consideration. The terms and conditions of the termination options vary by contract.
• | Residual value guarantees, restrictions or covenants: The Company’s lease agreements do not contain residual value guarantees, restrictions or covenants.
Following is a summary of the weighted average remaining lease term and weighted average discount rate for the Company’s population of leases as of September 29, 2019:
|  | Operating Leases |  | Financing Leases |
Weighted average remaining lease term |  | 10.2 years |  | 4.9 years |
Weighted average discount rate |  |  | 4.1 | % |  | 5.7 | %
As of September 29, 2019, the Company had one real estate operating lease commitment that had not yet commenced. This lease commitment is expected to commence during the fourth quarter of 2019 and have a lease term of five years. The additional lease liability associated with this lease commitment is expected to be approximately $0.3 million. Following is a summary of balances related to the Company’s lease portfolio within the Company’s condensed consolidated statements of operations for the third quarter and the first nine months of 2019:
(in thousands) |  | Third Quarter 2019 |  |  | First Nine Months 2019 |
Cost of sales impact: |  |  |  |  |  |  |  |
Operating leases costs |  | $ | 1,356 |  |  | $ | 4,039 |
Short-term and variable leases |  |  | 2,814 |  |  |  | 7,393 |
Depreciation expense from financing leases(1) |  |  | 353 |  |  |  | 1,060 |
Total cost of sales impact |  | $ | 4,523 |  |  | $ | 12,492 |
Selling, delivery and administrative expenses impact: |  |  |  |  |  |  |  |
Operating leases costs |  | $ | 3,717 |  |  | $ | 9,639 |
Short-term and variable leases |  |  | 838 |  |  |  | 2,676 |
Depreciation expense from financing leases(1) |  |  | 1,139 |  |  |  | 3,415 |
Total selling, delivery and administrative expenses impact |  | $ | 5,694 |  |  | $ | 15,730 |
Interest expense, net impact: |  |  |  |  |  |  |  |
Interest expense on financing lease obligations(2) |  | $ | 666 |  |  | $ | 2,083 |
Total interest expense, net impact |  | $ | 666 |  |  | $ | 2,083 |
Total lease cost |  | $ | 10,883 |  |  | $ | 30,305 |
(1) | During the third quarter of 2018, the Company had depreciation expense from capital leases of $0.3 million and $1.1 million in cost of sales and SD&A expenses, respectively. During the first nine months of 2018, the Company had depreciation expense from capital leases of $1.0 million and $3.4 million in cost of sales and SD&A expenses, respectively.
(2) | The Company had interest expense on capital lease obligations of $0.8 million during the third quarter of 2018 and $2.6 million during the first nine months of 2018.
The future minimum lease payments related to the Company’s lease portfolio includ e renewal options the Company has determined to be reasonably assured and exclude payments to landlords for real estate taxes and common area maintenance. Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of September 29, 2019:
(in thousands) |  | Operating Leases |  |  | Financing Leases |  |  | Total |
Remainder of 2019 |  | $ | 4,556 |  |  | $ | 2,612 |  |  | $ | 7,168 |
2020 |  |  | 19,387 |  |  |  | 10,611 |  |  |  | 29,998 |
2021 |  |  | 17,386 |  |  |  | 6,215 |  |  |  | 23,601 |
2022 |  |  | 13,965 |  |  |  | 2,694 |  |  |  | 16,659 |
2023 |  |  | 11,702 |  |  |  | 2,750 |  |  |  | 14,452 |
Thereafter |  |  | 78,543 |  |  |  | 8,213 |  |  |  | 86,756 |
Total minimum lease payments including interest |  | $ | 145,539 |  |  | $ | 33,095 |  |  | $ | 178,634 |
Less: Amounts representing interest |  |  | 28,726 |  |  |  | 4,074 |  |  |  | 32,800 |
Present value of minimum lease principal payments |  |  | 116,813 |  |  |  | 29,021 |  |  |  | 145,834 |
Less: Current portion of lease liabilities - operating and financing leases |  |  | 14,929 |  |  |  | 9,209 |  |  |  | 24,138 |
Noncurrent portion of lease liabilities - operating and financing leases |  | $ | 101,884 |  |  | $ | 19,812 |  |  | $ | 121,696 |
Following is a summary of future minimum lease payments for all noncancelable operating leases and capital leases as of December 30, 2018:
(in thousands) |  | Operating Leases |  |  | Capital Leases |  |  | Total |
2019 |  | $ | 14,146 |  |  | $ | 10,434 |  |  | $ | 24,580 |
2020 |  |  | 13,526 |  |  |  | 10,613 |  |  |  | 24,139 |
2021 |  |  | 12,568 |  |  |  | 6,218 |  |  |  | 18,786 |
2022 |  |  | 11,161 |  |  |  | 2,697 |  |  |  | 13,858 |
2023 |  |  | 10,055 |  |  |  | 2,753 |  |  |  | 12,808 |
Thereafter |  |  | 33,805 |  |  |  | 8,106 |  |  |  | 41,911 |
Total minimum lease payments including interest |  | $ | 95,261 |  |  | $ | 40,821 |  |  | $ | 136,082 |
Less: Amounts representing interest |  |  |  |  |  |  | 5,573 |  |  |  |  |
Present value of minimum lease principal payments |  |  |  |  |  |  | 35,248 |  |  |  |  |
Less: Current portion of lease liabilities - capital leases |  |  |  |  |  |  | 8,617 |  |  |  |  |
Noncurrent portion of lease liabilities - capital leases |  |  |  |  |  | $ | 26,631 |  |  |  |  |
Following is a summary of balances related to the Company’s lease portfolio within the Company’s condensed consolidated statement of cash flows for the first nine months of 2019:
(in thousands) |  | First Nine Months 2019 |
Cash flows from operating activities impact: |  |  |  |
Operating leases |  | $ | 13,576 |
Interest payments on financing lease obligations(1) |  |  | 2,083 |
Total cash flows from operating activities impact |  | $ | 15,659 |
Cash flows from financing activities impact: |  |  |  |
Principal payments on financing lease obligations(1) |  | $ | 6,441 |
Total cash flows from financing activities impact |  | $ | 6,441 |
(1) | During the first nine months of 2018, the Company had interest payments on capital lease obligations of $2.6 million and principal payments on capital lease obligations of $6.0 million.

X
- Definition Lessee operating leases and finance leases disclosure. + References No definition available. + Details
Name: | coke_LesseeOperatingLeasesAndFinanceLeasesDisclosureTextBlock
Namespace Prefix: | coke_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration