Leases

6 Months Ended

Jul. 17, 2021

Leases [Abstract]

Leases

LeasesSubstantially all of our leases are for facilities and vehicles. The initial term for facilities is typically 5 years to 10 years, with renewal options at 5 year intervals, with the exercise of lease renewal options at our sole discretion. Our vehicle and equipment leases are typically 3 years to 5 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease liabilities consist of the following:

(in thousands)	July 17, 2021		January 2, 2021
Total operating lease liabilities	$	2,553,804	$	2,477,087
Less: Current portion of operating lease liabilities	(462,633)		(462,588)
Noncurrent operating lease liabilities	$	2,091,171	$	2,014,499

The current portion of operating lease liabilities is included in Other current liabilities in the accompanying condensed consolidated balance sheets.

Total lease cost is included in Cost of sales and Selling, general and administrative expenses (“SG&A”) in the accompanying condensed consolidated statements of operations and is recorded net of immaterial sublease income. Total lease cost is comprised of the following:

	Twelve Weeks Ended				Twenty-Eight Weeks Ended
(in thousands)	July 17, 2021		July 11, 2020		July 17, 2021		July 11, 2020
Operating lease cost	$	124,184	$	119,707	$	286,169	$	281,512
Variable lease cost	34,195		30,856		77,720		74,392
Total lease cost	$	158,379	$	150,563	$	363,889	$	355,904

The future maturity of lease liabilities are as follows:

(in thousands)	July 17, 2021
Remainder of 2021	$	279,364
2022	490,926
2023	458,656
2024	388,181
2025	341,696
Thereafter	944,059
Total lease payments	2,902,882
Less: Imputed interest	(349,078)
Total operating lease liabilities	$	2,553,804

As of July 17, 2021, our operating lease payments include $79.7 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $124.3 million of legally binding minimum lease payments for leases signed, but not yet commenced.

The weighted-average remaining lease term and weighted-average discount rate for our operating leases are 7.0 years and 3.4% as of July 17, 2021. We calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term.

Other information relating to our lease liabilities is as follows:

	Twenty-Eight Weeks Ended
(in thousands)	July 17, 2021		July 11, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	275,358	$	305,079
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	284,295	$	219,954