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Leases

12 Months Ended

Aug. 26, 2023

Note M – Leases

Lease-related assets and liabilities recorded on the Consolidated Balance Sheets are as follows:



(in thousands)	Classification	August 26, 2023		August 27, 2022

Assets:
Operating	Operating lease right-of-use assets	$	2,998,097	$	2,918,817
Finance	Property and equipment		419,247		404,442
Total lease assets		$	3,417,344	$	3,323,259
Liabilities:
Current:
Operating	Current portion of operating lease liabilities	$	257,256	$	243,407
Finance	Accrued expenses and other		86,916		92,877
Noncurrent:
Operating	Operating lease liabilities, less current portion		2,917,046		2,837,973
Finance	Other long-term liabilities		200,702		217,428
Total lease liabilities		$	3,461,920	$	3,391,685

Accumulated amortization related to finance lease assets was $132.5 million as of August 26, 2023 and $97.2 million as of August 27, 2022.

Lease costs for finance and operating leases for the 52 weeks ended August 26, 2023 and August 27, 2022 are as follows:



		For the year ended
(in thousands)	Statement of Income Location	August 26, 2023		August 27, 2022

Finance lease cost:
Amortization of lease assets	Depreciation and amortization	$	71,913	$	65,212
Interest on lease liabilities	Interest expense, net		14,608		4,351
Operating lease cost⁽¹⁾	Selling, general and administrative expenses		437,762		401,000
Total lease cost		$	524,283	$	470,563

(1)	Includes short-term leases, variable lease costs and sublease income, which are immaterial.

The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of August 26, 2023 having initial or remaining lease terms in excess of one year are as follows:


	Finance		Operating
(in thousands)	Leases		Leases		Total

2024	$	88,284	$	372,849	$	461,133
2025		81,535		402,798		484,333
2026		61,571		378,865		440,436
2027		34,159		354,370		388,529
2028		10,409		327,795		338,204
Thereafter		43,228		2,260,833		2,304,061
Total lease payments		319,186		4,097,510		4,416,696
Less: Interest		(31,568)		(923,208)		(954,776)
Present value of lease liabilities	$	287,618	$	3,174,302	$	3,461,920

The following table summarizes the Company’s lease term and discount rate assumptions:



	August 26, 2023

Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised:
Finance leases – real estate	23
Finance leases – vehicles	3
Operating leases	13
Weighted-average discount rate:
Finance leases – real estate	3.85	%
Finance leases – vehicles	2.44	%
Operating leases	3.90	%

Cash paid for amounts included in the measurement of operating lease liabilities of $335.2 million and $316.0 million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal years 2023 and 2022, respectively.

As of August 26, 2023, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases have undiscounted future payments of approximately $56.9 million for real estate and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2024 to fiscal 2025.