| Leases | (8) Leases As of March 30, 2024, our obligations under operating lease arrangements primarily related to the rental of office space, warehouses, freight distribution centers, terminal yards and equipment. Right-of-use assets represent our right to use an underlying asset over the lease term and lease liabilities represent the obligation to make lease payments resulting from the lease agreement. We recognize a right-of-use asset and a lease liability on the effective date of a lease agreement. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using our incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease is not readily determinable. Our lease obligations typically do not include options to purchase the leased property, nor do they contain residual value guarantees or material restrictive covenants. Options to extend or terminate an agreement are included in the lease term when it becomes reasonably certain the option will be exercised. As of March 30, 2024, we were not reasonably certain of exercising any renewal or termination options, and as such, no adjustments were made to the right-of-use lease assets or corresponding liabilities. Leases with an initial term of 12 months or less, short-term leases, are not recorded on the balance sheet. Lease expense for short-term and long-term operating leases is recognized on a straight-line basis over the lease term. For facility leases, variable lease costs include the costs of common area maintenance, taxes, and insurance for which we pay the lessors an estimate that is adjusted to actual expense on a quarterly or annual basis depending on the underlying contract terms. For equipment leases, variable lease costs may include additional fees associated with using equipment in excess of estimated amounts. (8) Leases – continued The following table summarizes our lease costs for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):
Thirteen Weeks Ended March 30, 2024
With Affiliates With Third Parties Total
Lease cost
Operating lease cost $ 2,426 $ 6,375 $ 8,801
Short-term lease cost 17 2,735 2,752
Variable lease cost 242 1,207 1,449
Sublease income — — —
Total lease cost $ 2,685 $ 10,317 $ 13,002
Thirteen Weeks Ended April 1, 2023
With Affiliates With Third Parties Total
Lease cost
Operating lease cost $ 2,411 $ 6,619 $ 9,030
Short-term lease cost 7 4,029 4,036
Variable lease cost 199 599 798
Sublease income — — —
Total lease cost $ 2,617 $ 11,247 $ 13,864
The following table summarizes other lease related information as of and for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):
Thirteen Weeks Ended March 30, 2024
With With Third Total
Other information
Cash paid for amounts included in the measurement of operating leases $ 2,439 $ 6,545 $ 8,984
Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,271 $ 343 $ 2,614
Weighted-average remaining lease term (in years) 4.3 3.0 3.4
Weighted-average discount rate 7.7 % 5.5 % 6.2 %
April 1, 2023
With With Third Total
Other information
Cash paid for amounts included in the measurement of operating leases $ 2,382 $ 6,499 $ 8,881
Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 12,188 $ 12,188
Right-of-use asset change due to lease termination $ ( 64 ) $ — $ ( 64 )
Weighted-average remaining lease term (in years) 4.7 3.8 4.1
Weighted-average discount rate 7.1 % 5.2 % 5.8 % (8) Leases – continued Future minimum lease payments under these operating leases as of March 30, 2024, are as follows (in thousands):
With Affiliates With Third Parties Total
2024 (remaining) $ 7,183 $ 19,188 $ 26,371
2025 8,013 21,088 29,101
2026 5,481 17,201 22,682
2027 4,375 8,158 12,533
2028 4,189 1,333 5,522
Thereafter 3,672 — 3,672
Total required lease payments $ 32,913 $ 66,968 $ 99,881
Less amounts representing interest ( 10,873 )
Present value of lease liabilities $ 89,008 |
