Leases Leases

9 Months Ended

Nov. 28, 2020

7. Leases

We lease certain of the buildings and equipment used in our operations. We determine if an arrangement contains a lease at inception. Currently, all of our lease arrangements are classified as operating leases. We elected the package of practical expedients permitted under the transition guidance in adopting ASC 842, which among other things, allowed us to carry forward our historical lease classification. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and lease expense is recognized on a straight-line basis over the lease term. Our leases have remaining lease terms of one to ten years, some of which include renewal options that can extend the lease for up to an additional ten years at our sole discretion. We have made an accounting policy election not to record leases with an original term of 12 months or less on our consolidated balance sheet and such leases are expensed on a straight-line basis over the lease term.

In determining lease asset value, we consider fixed or variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. We use a discount rate for each lease based upon an estimated incremental borrowing rate over a similar term. We have elected the practical expedient to account for lease and non lease components (e.g., common-area maintenance costs) as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We are not a lessor in any transactions.

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(In thousands)	November 28, 2020		November 30, 2019		November 28, 2020		November 30, 2019
Operating lease cost	$	3,477	$	3,445	$	10,329	$	10,308
Short-term lease cost	472		427		1,384		1,606
Variable lease cost	678		843		2,071		2,223

Total lease cost	$	4,627	$	4,715	$	13,784	$	14,137

Other supplemental information related to leases was as follows:


	Nine Months Ended
(In thousands except weighted-average data)	November 28, 2020			November 30, 2019

Cash paid for amounts included in the measurement of operating lease liabilities	$	10,233		$	10,335
Lease assets obtained in exchange for new operating lease liabilities	$	19,623		$	15,948
Weighted-average remaining lease term - operating leases	5.8 years			5.9 years
Weighted-average discount rate - operating leases	3.18		%	3.57		%

Future maturities of lease liabilities are as follows:


(In thousands)	November 28, 2020
Remainder of Fiscal 2021	$	3,381
Fiscal 2022	13,866
Fiscal 2023	12,662
Fiscal 2024	10,740
Fiscal 2025	8,994
Fiscal 2026	7,136
Thereafter	10,078
Total lease payments	66,857
Less: Amounts representing interest	(1,637)
Present value of lease liabilities	$	65,220

In September 2020, we sold a building in McCook, IL used within our LSO segment for $25.1 million. The carrying value of the building was $4.3 million, and we recognized a gain on this sale of approximately $19.3 million, net of associated transaction costs, which is included as a reduction of selling, general and administrative expenses within our consolidated

statements of operations. We also entered into a separate lease agreement for this facility, which was determined to be an operating lease, and we have approximately $8.2 million of future lease payments upon commencement of this lease in September 2020.