Leases

4 Months Ended

Apr. 20, 2019

Note 8 – Leases

A portion of the Company’s retail stores and warehouses operate in leased facilities. The Company also leases the majority of the tractors and trailers within its fleet and certain other assets. Most of the real property leases contain multiple renewal options, which generally range from one to ten years. In those locations in which it is economically feasible to continue to operate, management expects that lease options will be exercised. The terms of certain leases contain provisions requiring payment of percentage rent based on sales and payment of executory costs such as property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premises or, in the case of transportation equipment, provisions requiring payment of variable rent based upon miles driven. Certain properties or portions thereof are subleased to others. As most of the Company’s leases do not provide an implicit discount rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The components of lease expense were as follows:

	16 Weeks Ended
(In thousands)	April 20, 2019
Operating lease cost	$	17,060
Short-term lease cost		2,029
Finance lease cost
Amortization of assets		1,131
Interest on lease liabilities		982
Sublease income		(1,334	)
Total net lease cost	$	19,868

Supplemental balance sheet information related to leases was as follows:

(In thousands)	April 20, 2019
Operating leases:
Operating lease assets	$		273,537

Current portion of operating lease liabilities	$		41,425
Noncurrent operating lease liabilities			279,599
Total operating lease liabilities	$		321,024
Finance leases:
Property and equipment, at cost	$		62,103
Accumulated amortization			(28,271	)
Property and equipment, net	$		33,832

Current portion of finance lease liabilities	$		6,109
Noncurrent finance lease liabilities			33,838
Total finance lease liabilities	$		39,947

Weighted average remaining lease term:
Operating leases		9.2 years
Finance leases		10.0 years

Weighted average discount rate:
Operating leases			5.7	%
Finance leases			8.2	%

Supplemental cash flow and other information related to leases was as follows:

16 Weeks Ended

(In thousands)

April 20, 2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used for operating leases

18,782

Operating cash flows used for finance leases

975

Financing cash flows used for finance leases

1,956

Leased assets obtained in exchange for lease liabilities:

Total operating lease liabilities

4,609

Total finance lease liabilities

—

The Company’s maturities of lease liabilities under operating and finance leases as of April 20, 2019 are as follows:

	Operating		Finance
(In thousands)	Leases		Leases		Total
2019	$	41,017		6,563	$	47,580
2020		54,486		7,420		61,906
2021		49,571		5,378		54,949
2022		43,570		4,785		48,355
2023		39,179		4,401		43,580
Thereafter		189,183		31,479		220,662
Total		417,006		60,026		477,032
Less interest		95,982		20,079		116,061
Present value of lease liabilities		321,024		39,947		360,971
Less current portion		41,425		6,109		47,534
Long-term lease liabilities	$	279,599	$	33,838	$	313,437