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Leases | 12 Months Ended
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Aug. 26, 2023
Leases [Abstract] |
Leases | Leases Our leases primarily include operating leases for equipment and real estate, including office space and manufacturing space. Financing leases are primarily for real estate and solar energy producing equipment. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement when it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, some of the leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of the lease obligations. Fixed payments may contain predetermined fixed rent escalations. For operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The supplemental balance sheet information related to our leases is as follows:
(in millions) | Classification | August 26, 2023 | August 27, 2022
Assets |  |  |
Operating leases | Operating lease assets | $ | 42.6 |  | $ | 41.1 |
Finance leases | Other long-term assets | 8.1 |  | 6.7 |
Total lease assets |  | $ | 50.7 |  | $ | 47.8 |
Liabilities |  |  |
Current: Operating leases | Other current liabilities | $ | 5.9 |  | $ | 4.7 |
Current: Finance leases | Other current liabilities | 1.3 |  | 1.0 |
Non-Current: Operating leases | Long-term operating lease liabilities | 42.0 |  | 40.4 |
Non-Current: Finance leases | Other long-term liabilities | 7.7 |  | 6.7 |
Total lease liabilities |  | $ | 56.9 |  | $ | 52.8 |
Operating lease costs incurred are as follows:
(in millions) | Classification | 2023 |  | 2022 |  | 2021
Operating lease expense(1) | Costs of goods sold and SG&A | $ | 10.3 |  |  | $ | 9.6 |  |  | $ | 5.8 |
Finance lease cost: |  |  |  |  |  |
Depreciation of lease assets | Costs of goods sold and SG&A | 1.0 |  |  | 0.8 |  |  | 0.6 |
Interest on lease liabilities | Interest expense, net | 0.5 |  |  | 0.4 |  |  | 0.3 |
Total lease cost |  | $ | 11.8 |  |  | $ | 10.8 |  |  | $ | 6.7 |
(1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial. Our future lease commitments as of August 26, 2023 included the following related party and non-related party leases:
| Operating Leases | Financing Leases
(in millions) | Related Party Amount | Non-Related Party Amount | Total | Non-Related Party Amount
Fiscal 2024 | $ | 1.8 |  | $ | 6.5 |  | $ | 8.3 |  | $ | 1.8 |
Fiscal 2025 | 1.8 |  | 6.6 |  | 8.4 |  | 1.9 |
Fiscal 2026 | 1.8 |  | 6.3 |  | 8.1 |  | 1.9 |
Fiscal 2027 | 1.8 |  | 6.1 |  | 7.9 |  | 1.9 |
Fiscal 2028 | 1.8 |  | 6.0 |  | 7.8 |  | 2.1 |
Thereafter | 2.4 |  | 17.0 |  | 19.4 |  | 1.2 |
Total future undiscounted lease payments | 11.4 |  | 48.5 |  | 59.9 |  | 10.8 |
Less: Interest | 2.0 |  | 10.0 |  | 12.0 |  | 1.8 |
Total reported lease liabilities | $ | 9.4 |  | $ | 38.5 |  | $ | 47.9 |  | $ | 9.0 |
Additional information related to our leases is as follows:
| 2023 | 2022 | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 5.0 |  | $ | 3.7 |  | $ | 2.6 |
Operating cash flows from financing leases | 0.5 |  | 0.4 |  | 0.3 |
Financing cash flows from financing leases | 1.1 |  | 0.9 |  | 0.6 |
Weighted average remaining lease term: |  |  |
Operating leases | 7.3 | 8.1 | 8.1
Finance leases | 5.2 | 6.0 | 6.8
Weighted average discount rate: |  |  |
Operating leases | 6.2 | % | 5.8 | % | 6.2 | %
Finance leases | 6.4 | % | 5.9 | % | 6.3 | %
Leases | Leases Our leases primarily include operating leases for equipment and real estate, including office space and manufacturing space. Financing leases are primarily for real estate and solar energy producing equipment. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement when it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, some of the leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of the lease obligations. Fixed payments may contain predetermined fixed rent escalations. For operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The supplemental balance sheet information related to our leases is as follows:
(in millions) | Classification | August 26, 2023 | August 27, 2022
Assets |  |  |
Operating leases | Operating lease assets | $ | 42.6 |  | $ | 41.1 |
Finance leases | Other long-term assets | 8.1 |  | 6.7 |
Total lease assets |  | $ | 50.7 |  | $ | 47.8 |
Liabilities |  |  |
Current: Operating leases | Other current liabilities | $ | 5.9 |  | $ | 4.7 |
Current: Finance leases | Other current liabilities | 1.3 |  | 1.0 |
Non-Current: Operating leases | Long-term operating lease liabilities | 42.0 |  | 40.4 |
Non-Current: Finance leases | Other long-term liabilities | 7.7 |  | 6.7 |
Total lease liabilities |  | $ | 56.9 |  | $ | 52.8 |
Operating lease costs incurred are as follows:
(in millions) | Classification | 2023 |  | 2022 |  | 2021
Operating lease expense(1) | Costs of goods sold and SG&A | $ | 10.3 |  |  | $ | 9.6 |  |  | $ | 5.8 |
Finance lease cost: |  |  |  |  |  |
Depreciation of lease assets | Costs of goods sold and SG&A | 1.0 |  |  | 0.8 |  |  | 0.6 |
Interest on lease liabilities | Interest expense, net | 0.5 |  |  | 0.4 |  |  | 0.3 |
Total lease cost |  | $ | 11.8 |  |  | $ | 10.8 |  |  | $ | 6.7 |
(1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial. Our future lease commitments as of August 26, 2023 included the following related party and non-related party leases:
| Operating Leases | Financing Leases
(in millions) | Related Party Amount | Non-Related Party Amount | Total | Non-Related Party Amount
Fiscal 2024 | $ | 1.8 |  | $ | 6.5 |  | $ | 8.3 |  | $ | 1.8 |
Fiscal 2025 | 1.8 |  | 6.6 |  | 8.4 |  | 1.9 |
Fiscal 2026 | 1.8 |  | 6.3 |  | 8.1 |  | 1.9 |
Fiscal 2027 | 1.8 |  | 6.1 |  | 7.9 |  | 1.9 |
Fiscal 2028 | 1.8 |  | 6.0 |  | 7.8 |  | 2.1 |
Thereafter | 2.4 |  | 17.0 |  | 19.4 |  | 1.2 |
Total future undiscounted lease payments | 11.4 |  | 48.5 |  | 59.9 |  | 10.8 |
Less: Interest | 2.0 |  | 10.0 |  | 12.0 |  | 1.8 |
Total reported lease liabilities | $ | 9.4 |  | $ | 38.5 |  | $ | 47.9 |  | $ | 9.0 |
Additional information related to our leases is as follows:
| 2023 | 2022 | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 5.0 |  | $ | 3.7 |  | $ | 2.6 |
Operating cash flows from financing leases | 0.5 |  | 0.4 |  | 0.3 |
Financing cash flows from financing leases | 1.1 |  | 0.9 |  | 0.6 |
Weighted average remaining lease term: |  |  |
Operating leases | 7.3 | 8.1 | 8.1
Finance leases | 5.2 | 6.0 | 6.8
Weighted average discount rate: |  |  |
Operating leases | 6.2 | % | 5.8 | % | 6.2 | %
Finance leases | 6.4 | % | 5.9 | % | 6.3 | %

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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