LEASES

9 Months Ended

Sep. 25, 2021

Leases [Abstract]

LEASES

LEASES

Operating and Finance Leases

Right-of-use lease assets and lease liabilities are reported in the Company’s unaudited condensed consolidated balance sheets as follows:

	September 25, 2021		December 26, 2020
	(in thousands)
Operating leases
Operating lease right-of-use assets, net	$	284,722	$	178,220
Other current liabilities	$	31,731	$	24,674
Operating lease right-of-use liabilities	244,012		155,595
Total operating lease liabilities	$	275,743	$	180,269
Finance leases
Property, plant and equipment, net	$	30,389	$	31,614
Current portion of long-term debt and finance leases	$	2,170	$	3,018
Long-term debt, net and finance leases	25,817		26,029
Total finance lease liabilities	$	27,987	$	29,047

Certain operating lease right-of-use assets and liabilities were reclassified to assets and liabilities held for sale as of September 25, 2021, respectively, in connection with two divestitures that occurred on October 12, 2021. Refer to Note 18 “Subsequent Events” for additional information.

The components of operating and finance lease costs were as follows:

	Three Months Ended				Nine Months Ended
	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
	(in thousands)
Operating lease costs	$	12,697	$	8,416	$	33,073	$	24,387
Finance lease costs:
Amortization of right-of-use assets	846		966		2,534		2,853
Interest on lease liabilities	317		323		972		986
Short-term lease costs	1,335		530		3,617		1,644
Variable lease costs	1,184		1,556		2,819		3,669
Sublease income	(521)		(440)		(1,475)		(1,216)
Total lease costs	$	15,858	$	11,351	$	41,540	$	32,323

Other information related to leases was as follows:

Supplemental cash flow information

	Nine Months Ended
	September 25, 2021		September 26, 2020
	(in thousands)
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,346	$	21,959
Operating cash flows from finance leases	974		986
Finance cash flows from finance leases	1,822		3,474
Non-cash leases activity:
Right-of-use lease assets obtained in exchange for new operating lease liabilities	$	121,365	$	50,491
Right-of-use lease assets obtained in exchange for new finance lease liabilities	930		735

Lease term and discount rate

	As of		As of
	September 25, 2021		September 26, 2020
Weighted-average remaining lease term (in years)
Operating lease	9.0		8.2
Finance lease	12.0		12.6
Weighted-average discount rate
Operating lease	3.6	%	4.2	%
Finance lease	4.5	%	4.5	%

At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate, which is based on the information available at the lease commencement date and represents a rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

As of September 25, 2021, maturities of operating and finance lease liabilities for each of the following five years and a total thereafter were as follows:

	Operating Leases		Finance Leases
	(in thousands)
2021 (excluding the nine months ended September 25, 2021)	$	10,546	$	1,034
2022	41,917		3,844
2023	39,020		3,474
2024	37,415		3,242
2025	35,204		2,965
Thereafter	163,850		21,885
Total minimum future lease payments	327,952		36,444
Less: Imputed interest	52,209		8,457
Total lease liabilities	$	275,743	$	27,987

The above table excludes certain operating lease obligations related to the two divestitures completed on October 12, 2021. Refer to Note 18 “Subsequent Events” for additional information.

Total minimum future lease payments (predominantly operating leases) of approximately $129 million for leases that have not commenced as of September 25, 2021, as the Company does not yet control the underlying assets, are not included in the unaudited condensed consolidated financial statements. These leases are expected to commence between fiscal years 2021 and 2024 with lease terms of approximately 8 to 15 years.

LEASES

LEASES

Operating and Finance Leases

Right-of-use lease assets and lease liabilities are reported in the Company’s unaudited condensed consolidated balance sheets as follows:

	September 25, 2021		December 26, 2020
	(in thousands)
Operating leases
Operating lease right-of-use assets, net	$	284,722	$	178,220
Other current liabilities	$	31,731	$	24,674
Operating lease right-of-use liabilities	244,012		155,595
Total operating lease liabilities	$	275,743	$	180,269
Finance leases
Property, plant and equipment, net	$	30,389	$	31,614
Current portion of long-term debt and finance leases	$	2,170	$	3,018
Long-term debt, net and finance leases	25,817		26,029
Total finance lease liabilities	$	27,987	$	29,047

Certain operating lease right-of-use assets and liabilities were reclassified to assets and liabilities held for sale as of September 25, 2021, respectively, in connection with two divestitures that occurred on October 12, 2021. Refer to Note 18 “Subsequent Events” for additional information.

The components of operating and finance lease costs were as follows:

	Three Months Ended				Nine Months Ended
	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
	(in thousands)
Operating lease costs	$	12,697	$	8,416	$	33,073	$	24,387
Finance lease costs:
Amortization of right-of-use assets	846		966		2,534		2,853
Interest on lease liabilities	317		323		972		986
Short-term lease costs	1,335		530		3,617		1,644
Variable lease costs	1,184		1,556		2,819		3,669
Sublease income	(521)		(440)		(1,475)		(1,216)
Total lease costs	$	15,858	$	11,351	$	41,540	$	32,323

Other information related to leases was as follows:

Supplemental cash flow information

	Nine Months Ended
	September 25, 2021		September 26, 2020
	(in thousands)
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,346	$	21,959
Operating cash flows from finance leases	974		986
Finance cash flows from finance leases	1,822		3,474
Non-cash leases activity:
Right-of-use lease assets obtained in exchange for new operating lease liabilities	$	121,365	$	50,491
Right-of-use lease assets obtained in exchange for new finance lease liabilities	930		735

Lease term and discount rate

	As of		As of
	September 25, 2021		September 26, 2020
Weighted-average remaining lease term (in years)
Operating lease	9.0		8.2
Finance lease	12.0		12.6
Weighted-average discount rate
Operating lease	3.6	%	4.2	%
Finance lease	4.5	%	4.5	%

At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate, which is based on the information available at the lease commencement date and represents a rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

As of September 25, 2021, maturities of operating and finance lease liabilities for each of the following five years and a total thereafter were as follows:

	Operating Leases		Finance Leases
	(in thousands)
2021 (excluding the nine months ended September 25, 2021)	$	10,546	$	1,034
2022	41,917		3,844
2023	39,020		3,474
2024	37,415		3,242
2025	35,204		2,965
Thereafter	163,850		21,885
Total minimum future lease payments	327,952		36,444
Less: Imputed interest	52,209		8,457
Total lease liabilities	$	275,743	$	27,987

The above table excludes certain operating lease obligations related to the two divestitures completed on October 12, 2021. Refer to Note 18 “Subsequent Events” for additional information.

Total minimum future lease payments (predominantly operating leases) of approximately $129 million for leases that have not commenced as of September 25, 2021, as the Company does not yet control the underlying assets, are not included in the unaudited condensed consolidated financial statements. These leases are expected to commence between fiscal years 2021 and 2024 with lease terms of approximately 8 to 15 years.