Leases

6 Months Ended

Jul. 01, 2023

At July 1, 2023 and December 31, 2022, the Company’s lease assets and lease liabilities, primarily for its studios and corporate offices, were as follows:


	July 1, 2023		December 31, 2022
Assets:
Operating leases	$	58,019	$	75,696
Finance leases		16		54
Total lease assets	$	58,035	$	75,750

Liabilities:
Current
Operating leases	$	9,949	$	17,955
Finance leases		14		31
Noncurrent
Operating leases		58,867		68,099
Finance leases		1		7
Total lease liabilities	$	68,831	$	86,092

For the three and six months ended July 1, 2023 and July 2, 2022, the components of the Company’s lease expense were as follows:


	Three Months Ended					Six Months Ended
	July 1,			July 2,		July 1,		July 2,
	2023			2022		2023		2022
Operating lease cost:
Fixed lease cost	$	5,958		$	7,791	$	13,111	$	15,903
Lease termination (benefit) cost		(169	)		2,220		12,050		2,100
Variable lease cost		15			6		31		13
Total operating lease cost	$	5,804		$	10,017	$	25,192	$	18,016
Finance lease cost:
Amortization of leased assets		12			26	$	38	$	61
Interest on lease liabilities		0			1		0		2
Total finance lease cost	$	12		$	27	$	38	$	63
Total lease cost	$	5,816		$	10,044	$	25,230	$	18,079

As previously disclosed, in conjunction with the continued rationalization of its real estate portfolio, the Company entered into subleases with commencement dates in the first quarter of fiscal 2023. The Company recorded $903 and $1,524 of sublease income for the three and six months ended July 1, 2023, respectively, as an offset to general and administrative expenses.

At July 1, 2023 and December 31, 2022, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:


	July 1, 2023		December 31, 2022
Weighted Average Remaining Lease Term (years)
Operating leases		7.53		6.90
Finance leases		0.83		1.00

Weighted Average Discount Rate
Operating leases		7.41		7.03
Finance leases		3.84		3.52

The Company’s leases have remaining lease terms of 0 to 9 years with a weighted average lease term of 7.53 years as of July 1, 2023.

At July 1, 2023, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:


	Operating Leases		Finance Leases		Total
Remainder of fiscal 2023	$	6,840	$	9	$	6,849
Fiscal 2024		15,235		7		15,242
Fiscal 2025		12,899		—		12,899
Fiscal 2026		9,905		—		9,905
Fiscal 2027		9,469		—		9,469
Fiscal 2028		9,213		—		9,213
Thereafter		26,931		—		26,931
Total lease payments	$	90,492	$	16	$	90,508
Less imputed interest		21,676		1		21,677
Present value of lease liabilities	$	68,816	$	15	$	68,831

Supplemental cash flow information related to leases for the six months ended July 1, 2023 and July 2, 2022 were as follows:


	Six Months Ended
	July 1,			July 2,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	13,507		$	16,733
Operating cash flows from finance leases	$	0		$	2
Financing cash flows from finance leases	$	38		$	61

Lease assets (modified) obtained in exchange for (modified) new operating lease liabilities	$	(7,287	)	$	6,909
Lease assets obtained in exchange for new finance lease liabilities	$	—		$	44