Capital Lease and Financing Obligations (Notes)

12 Months Ended

Sep. 27, 2019

Capital Lease and Financing Obligations [Abstract]

Capital Leases in Financial Statements of Lessee Disclosure

. CAPITAL LEASE AND FINANCING OBLIGATIONS

Corporate Facility Financing Obligation

On December 28, 2016, we entered into three lease agreements including: (1) a 20-year leaseback of the facility located at 100 Chelmsford Street, (2) a 20-year build-to-suit lease arrangement for the construction and subsequent lease back of a new facility to be located at 144 Chelmsford Street, and (3) a 14-year building lease renewal of an adjacent facility at 121 Hale Street (collectively, the "Lowell Leases"). We account for the Lowell Leases as a single unit of accounting under the financing method. As of October 1, 2018, the construction of the facility at 144 Chelmsford Street was completed, the building was placed in service and the associated lease term commenced.

We calculated a lease obligation based on the future minimum lease payments discounted at 7.2%. The discount rate represents the estimated incremental borrowing rate over the lease term of 20 years. The minimum lease payments are recorded as interest expense and in part as a payment of principal reducing the lease obligation. The real property assets in the transaction remain on the Consolidated Balance Sheets and continue to be depreciated over their remaining useful lives. As of September 27, 2019 and September 28, 2018, the outstanding lease obligations associated with the Lowell Leases included in leases payable in the Consolidated Balance Sheets were $28.2 million and $28.3 million, respectively.

Additionally, we have capital equipment lease obligations, of which approximately $2.3 million and $1.2 million were outstanding as of September 27, 2019 and September 28, 2018, respectively.

As of September 27, 2019, future minimum payments under capital lease obligations related to all of our in service leases were as follows (in thousands):



Fiscal year ending:	Amount
2020	$	3,299
2021	3,343
2022	2,884
2023	2,816
2024	2,853
Thereafter	39,927
Total minimum capital lease payments	$	55,122
Less amount representing interest	(26,241		)
Present value of net minimum capital lease payments	$	28,881