Lease Commitments (Tables)

6 Months Ended

Jun. 28, 2020

In accordance with ASC 842, the components of lease expense were as follows:

	13 Weeks Ended						26 Weeks Ended
	June 28, 2020			June 30, 2019			June 28, 2020			June 30, 2019
	(In thousands)						(In thousands)
Lease expense:
Amortization of right-of-use assets	$	689		$	706		$	1,411		$	1,386
Interest on lease liabilities		78			95			167			195
Finance lease expense		767			801			1,578			1,581
Operating lease expense		20,318			20,003			40,604			39,825
Variable lease expense ⁽¹⁾		1,465			4,539			5,981			9,222
Sublease income		(293	)		(329	)		(586	)		(645	)
Total lease expense	$	22,257		$	25,014		$	47,577		$	49,983

(1)

Variable lease expense for the 13 and 26 weeks ended June 28, 2020 was reduced by $3.0 million for lease abatements related to the effects of the COVID-19 pandemic that resulted in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. See Note 2 to the Interim Financial Statements for a further discussion on lease concessions.

Additionally, subsequent to the issuance of the Company’s Interim Financial Statements as of June 30, 2019, management identified an immaterial correction related to the disclosure of certain variable lease payments. Variable lease expense for the 13 and 26 weeks ended June 30, 2019 did not previously include $4.5 million and $9.0 million, respectively, of variable lease payments for property taxes, insurance, and common area maintenance related to triple net leases, as well as certain equipment sales taxes, licenses, fees and repairs. Management corrected the disclosure related to variable lease expense in the table above for the 13 and 26 weeks ended June 30, 2019 and, except for this change in disclosure, the correction had no impact upon the Company’s Interim Financial Statements.

Schedule of Other Information Related To Leases

In accordance with ASC 842, other information related to leases was as follows:

	26 Weeks Ended
	June 28, 2020			June 30, 2019
	(In thousands)
Operating cash flows from operating leases	$	37,354		$	45,435
Operating cash flows from finance leases		167			218
Financing cash flows from finance leases		1,409			1,510
Cash paid for amounts included in the measurement of lease liabilities	$	38,930		$	47,163

Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	864
Right-of-use assets obtained in exchange for new operating lease liabilities	$	39,986		$	28,691
Weighted-average remaining lease term—finance leases	2.8 years			3.3 years
Weighted-average remaining lease term—operating leases	5.2 years			5.3 years
Weighted-average discount rate—finance leases		4.7	%		4.9	%
Weighted-average discount rate—operating leases		6.4	%		6.5	%

Schedule of Maturities For Finance And Operating Leases

In accordance with ASC 842, maturities of finance and operating lease liabilities as of June 28, 2020 were as follows:

Year Ending:	Finance Leases			Operating Leases
	(In thousands)
2020 (remaining six months)	$	1,600		$	46,965
2021		2,188			74,733
2022		1,740			64,066
2023		920			49,934
2024		—			40,952
Thereafter		—			61,466
Undiscounted cash flows	$	6,448		$	338,116
Reconciliation of lease liabilities:
Weighted-average remaining lease term	2.8 years			5.2 years
Weighted-average discount rate		4.7	%		6.4	%
Present values	$	6,042		$	286,666
Lease liabilities - current		2,602			70,998
Lease liabilities - long-term		3,440			215,668
Lease liabilities - total	$	6,042		$	286,666
Difference between undiscounted and discounted cash flows	$	406		$	51,450