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Leasing | 9 Months Ended
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Dec. 28, 2019
Leasing [Abstract] |
Leasing | Note 8 – Leasing We enter into lease agreements for certain retail stores, warehouses, distribution centers, office space and land as well as service contracts that are considered leases. We determine if an arrangement is or contains a lease at inception. We record ROU assets and lease obligations for our finance and operating leases, which are initially based on the discounted future minimum lease payments over the term of the lease. As the rate implicit in our leases is not easily determinable, our applicable incremental borrowing rate is used in calculating the present value of the lease payments. We estimate our incremental borrowing rate considering the market rates of our outstanding collateralized borrowings and comparisons to comparable borrowings of similar terms. Lease term is defined as the non-cancelable period of the lease plus any options to extend the lease when it is reasonably certain that it will be exercised. Our leases have remaining lease terms of less than one year to approximately 38 years. Most of our leases include one or more options to extend the lease, for periods ranging from one year to 30 years or more. For leases with an initial term of 12 months or less, no ROU assets or lease obligations are recorded on the balance sheet and we recognize short-term lease expense for these leases on a straight-line basis over the lease term. Certain of our lease agreements include rental payments based on a percentage of retail sales over specified levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For the majority of all classes of underlying assets, we have elected to separate lease from non-lease components. We have elected to combine lease and non-lease components for certain classes of equipment. We sublease excess space to third parties. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales or general and administrative expense. Amortization expense for finance leases is recognized on a straight-line basis over the lease term and is included in cost of sales or general and administrative expense. Interest expense for finance leases is recognized using the effective interest method. Variable payments, short-term rentals and payments associated with non-lease components are expensed as incurred. Historical failed sale leasebacks that were assumed through acquisitions and do not qualify for sale leaseback accounting continue to be accounted for as financing obligations. As of December 28, 2019, net assets of $4.6 million and liabilities of $7.6 million due to failed sale leaseback arrangements were included with finance lease assets and liabilities, respectively, on the Consolidated Balance Sheet. The components of operating and finance lease cost were as follows:
|  | Quarter Ended |  | Nine Months Ended
|  | Fiscal December |  | Fiscal December
|  | 2019 |  | 2019
|  | (Dollars in thousands)
Operating lease cost |  | $ | 9,861 |  | $ | 28,812
Finance lease/financing obligations cost: |  |  |  |  |  |
Amortization of assets |  |  | 5,568 |  |  | 14,750
Interest on liabilities |  |  | 5,354 |  |  | 15,945
Short term and variable lease cost |  |  | 558 |  |  | 1,643
Sublease income |  |  | (32) |  |  | (98)
Total lease cost |  | $ | 21,309 |  | $ | 61,052
Supplemental cash flow information related to leases was as follows:
|  | Nine Months Ended
|  | Fiscal December
|  | 2019
|  | (Dollars in thousands)
Cash paid for amounts included in measurement of lease obligations: |  |  |
Operating cash flows from operating leases |  | $ | 27,507
Operating cash flows from finance leases/financing obligations |  |  | 15,925
Financing cash flows from finance leases/financing obligations |  |  | 19,512
Net assets obtained in exchange for operating lease obligations |  |  | 5,871
Net assets obtained in exchange for finance lease obligations |  |  | 54,286
The following table summarizes weighted average remaining lease term and discount rates:
|  | Operating ‎Leases |  | Finance ‎ Leases and ‎ Financing ‎Obligations
Weighted average remaining lease term, in years |  |  | 9.4 |  |  |  | 10.0 |
Weighted average discount rate |  |  | 3.53 | % |  |  | 9.05 | %
Future maturities of our lease liabilities, excluding subleases, as of December 28, 2019 are as follows:
|  | Operating ‎Leases |  | Finance ‎ Leases and ‎ Financing ‎Obligations
|  | (Dollars in thousands)
Remainder 2020 |  | $ | 9,447 |  | $ | 12,928
2021 |  |  | 36,553 |  |  | 52,126
2022 |  |  | 33,155 |  |  | 51,956
2023 |  |  | 29,170 |  |  | 51,999
2024 |  |  | 24,648 |  |  | 45,601
Thereafter |  |  | 113,167 |  |  | 251,798
Total undiscounted lease obligations |  | $ | 246,140 |  | $ | 466,408
Less: imputed interest |  |  | (39,023) |  |  | (136,436)
Net lease obligation |  | $ | 207,117 |  | $ | 329,972
Total lease payments include $80 million related to options to extend operating leases that are reasonably certain of being exercised, include $119 million related to options to extend finance leases that are reasonably certain of being exercised and exclude $16 million of legally binding lease payments for leases signed but not yet commenced as of December 28, 2019. The aggregate minimum annual lease rentals at March 30, 2019 for the remaining contractual term of non-cancelable leases were as follows:
|  | Operating ‎Leases |  | Finance ‎ Leases and ‎ Financing ‎Obligations
|  | (Dollars in thousands)
2020 |  | $ | 33,225 |  | $ | 43,034
2021 |  |  | 28,819 |  |  | 43,791
2022 |  |  | 23,552 |  |  | 43,459
2023 |  |  | 17,949 |  |  | 42,981
2024 |  |  | 11,488 |  |  | 37,733
Thereafter |  |  | 33,614 |  |  | 191,366
Total minimum rentals before sublease income |  | $ | 148,647 |  | $ | 402,364
Less: minimum sublease rentals |  |  | (488) |  |  | —
Total minimum rentals |  | $ | 148,159 |  | $ | 402,364
Less: imputed interest |  |  |  |  |  | (142,086)
Present value of minimum lease payments |  |  |  |  | $ | 260,278

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- Definition The entire disclosure for operating and finance leases of lessee. Includes, but is not limited to, description of lease and maturity analysis of lease liability. + References No definition available. + Details
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