Leases

12 Months Ended

Jan. 01, 2022

Note 9 – 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 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 renewal options will be exercised as they come due. The terms of certain leases contain provisions requiring payment of variable 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 reference 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 cost were as follows:

		2021			2020			2019
(In thousands)		(52 Weeks)			(53 Weeks)			(52 Weeks)
Operating lease cost	$		58,410		$	55,955		$	54,798
Short-term lease cost			8,469			8,698			7,131
Finance lease cost
Amortization of assets			4,645			4,045			3,330
Interest on lease liabilities			3,005			3,194			3,084
Variable rent			162			333			10
Sublease income			(4,356	)		(3,994	)		(4,014	)
Total net lease cost	$		70,335		$	68,231		$	64,339

Supplemental balance sheet information related to leases was as follows:

	January 1,			January 2,
(In thousands)	2022			2021
Operating leases:
Operating lease assets	$	283,040		$	289,173

Current portion of operating lease liabilities	$	47,845		$	45,786
Noncurrent operating lease liabilities		266,701			278,859
Total operating lease liabilities	$	314,546		$	324,645
Finance leases:
Property and equipment, at cost	$	56,591		$	53,932
Accumulated amortization		(18,707	)		(14,971	)
Property and equipment, net	$	37,884		$	38,961

Current portion of finance lease liabilities	$	5,359		$	4,030
Noncurrent finance lease liabilities		37,783			39,602
Total finance lease liabilities	$	43,142		$	43,632

Weighted average remaining lease term (in years):
Operating leases		7.8			8.4
Finance leases		10.2			11.3

Weighted average discount rate:
Operating leases		5.2	%		5.5	%
Finance leases		7.1	%		7.3	%

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

		2021		2020		2019
(In thousands)		(52 Weeks)		(53 Weeks)		(52 Weeks)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$		62,590	$	62,008	$	62,455
Operating cash flows used for finance leases			3,005		3,173		3,047
Financing cash flows used for finance leases			4,738		4,075		5,453

Lease assets obtained in exchange for lease liabilities:
Total operating lease liabilities			36,867		62,500		34,346
Total finance lease liabilities			4,238		3,602		3,679

The Company’s total future lease commitments under operating and finance leases in effect at January 1, 2022 are as follows:

	Operating		Finance
(In thousands)	Leases		Leases		Total
2022	$	62,665	$	8,181	$	70,846
2023		58,425		6,835		65,260
2024		50,715		6,334		57,049
2025		45,985		5,859		51,844
2026		40,005		5,268		45,273
Thereafter		128,931		28,186		157,117
Total		386,726		60,663		447,389
Less interest		72,180		17,521		89,701
Present value of lease liabilities		314,546		43,142		357,688
Less current portion		47,845		5,359		53,204
Long-term lease liabilities	$	266,701	$	37,783	$	304,484

Certain retail store facilities and the Fresh Cut production facility, either owned or obtained through leasing arrangements, are leased to others. A majority of the leases provide for minimum rent and contain renewal options. Certain of the leases contain escalation clauses and contingent rentals based upon stipulated sales volumes.

Owned assets, included in property and equipment, which are leased to others are as follows:

	January 1,		January 2,
(In thousands)	2022		2021
Land and improvements	$	8,681	$	7,141
Buildings		40,900		27,864
Owned assets leased to others		49,581		35,005
Less accumulated amortization and depreciation		15,944		11,190
Net owned assets leased to others	$	33,637	$	23,815

Future minimum rentals to be received under leases in effect at January 1, 2022 are as follows:

(In thousands)	2022		2023		2024		2025		2026		Thereafter		Total
Owned property	$	6,054	$	5,794	$	4,875	$	3,775	$	3,423	$	25,064	$	48,985
Leased property		3,814		3,315		2,630		1,820		969		4,063		16,611
Total	$	9,868	$	9,109	$	7,505	$	5,595	$	4,392	$	29,127	$	65,596