XML 47 R12.htm IDEA: XBRL DOCUMENT
v3.19.3

Leases | 9 Months Ended
--- | ---
Sep. 28, 2019
Leases [Abstract] |
Leases of Lessee Disclosure | 6. Leases We lease our retail, office and manufacturing space under operating leases which, in addition to the minimum lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating expenses. While our local market development approach generally results in long-term participation in given markets, our retail store leases generally provide for an initial lease term of five to 10 years. Our office and manufacturing leases provide for an initial lease term of up to 15 years. In addition, our mall-based retail store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at our sole discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement. Our lease agreements do not contain any material residual value guarantees. We also lease vehicles and certain equipment under operating leases with an initial lease term of three to five years. We determine if an arrangement is a lease at inception. Beginning in 2019 in conjunction with our adoption of ASC Topic 842, Leases, right-of-use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the estimated present value of future lease payments over the lease term. Most of our leases do not provide an implicit interest rate nor is the rate available to us from our lessors. As an alternative, we use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, including publicly available data, in determining the present value of lease payments. Our operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease commencement date or the date we take possession of the property. During lease renewal negotiations that extend beyond the original lease term, we estimate straight-line rent expense based on current market conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount is reasonably estimable. Future payments for real estate taxes and certain building operating expenses for which we are obligated are not included in operating lease costs. Leases with an initial term of 12 months or less are not recorded on the balance sheet as an ROU asset or operating lease liability. We recognize operating lease costs for these short-term leases, primarily small equipment leases, on a straight-line basis over the lease term. At September 28, 2019, our finance ROU assets and lease liabilities were not significant. Operating lease costs were as follows (in thousands):
|  |  |  | Three Months Ended |  |  | Nine Months Ended |
|  |  |  | September 28, 2019 |  |  | September 28, 2019 |
Operating lease costs(1) |  |  |  | $ | 21,583 |  |  | $ | 63,719 |
Variable lease costs |  |  |  | $ | 466 |  |  | $ | 1,387 |
(1) | Includes short-term lease costs which are not significant.
The maturities of operating lease liabilities as of September 28, 2019, were as follows (in thousands):
2019 (excluding the nine months ended September 28, 2019) |  | $ | 21,045 |
2020 |  |  | 79,652 |
2021 |  |  | 72,354 |
2022 |  |  | 64,339 |
2023 |  |  | 54,970 |
2024 |  |  | 43,393 |
Thereafter |  |  | 110,847 |
Total lease payments(1) |  |  | 446,600 |
Less: Interest |  |  | 95,355 |
Present value of operating lease liabilities(2) |  | $ | 351,245 |
(1) | Total lease payments exclude $51 million of legally binding minimum lease payments for leases signed but not yet commenced.
(2) | Includes the current portion of $58 million for operating lease liabilities.
The aggregate future commitments under operating leases as of December 30, 2018, were expected to be as follows (in thousands):
2019 |  | $ | 78,337 |
2020 |  |  | 73,331 |
2021 |  |  | 66,491 |
2022 |  |  | 59,515 |
2023 |  |  | 51,076 |
Thereafter |  |  | 149,318 |
Total lease payments(1) |  | $ | 478,068 |
(1) | Total lease payments include $62 million of legally binding minimum lease payments for leases signed but not yet commenced.
Other information related to operating leases was as follows:
|  | September 28, 2019 |
Weighted-average remaining lease term (years) |  |  | 6.7 |
Weighted-average discount rate |  | 7.3% |
|  | Nine Months Ended |
(in thousands) |  | September 28, 2019 |
Cash paid for amounts included in present value of operating lease liabilities |  | $ | 60,512 |
Right-of-use assets obtained in exchange for operating lease liabilities(1) |  | $ | 53,230 |
(1) | See Note 1, Recently Adopted Accounting Guidance, which discusses the impact of our initial adoption of the new lease standard.

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

X
- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
Name: | us-gaap_LeasesOfLesseeDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration