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Leases
 12 Months Ended
Aug. 27, 2022
Leases [Abstract]  
Leases Leases
Our leases primarily include operating leases for equipment and real estate, including office space and manufacturing space. Financing leases are primarily for real estate and solar energy producing equipment. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement when it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations.

Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised.

Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, some of the leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of the lease obligations. Fixed payments may contain predetermined fixed rent escalations. For operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
The supplemental balance sheet information related to our leases is as follows:
ClassificationAugust 27, 2022August 28, 2021
Assets
Operating leasesOperating lease assets$41,131 $28,379 
Finance leasesOther long-term assets6,672 4,971 
Total lease assets$47,803 $33,350 
Liabilities
Current: Operating leasesOther current liabilities$4,715 $2,596 
Current: Finance leasesOther current liabilities974 700 
Non-Current: Operating leasesLong-term operating lease liabilities40,426 26,745 
Non-Current: Finance leasesOther long-term liabilities6,690 5,313 
Total lease liabilities$52,805 $35,354 
Operating lease costs incurred are as follows:
Year EndedYear Ended
ClassificationAugust 27, 2022August 28, 2021
Operating lease expense(1)
Costs of goods sold and SG&A$9,550 $5,785 
Finance lease cost:
Depreciation of lease assetsCosts of goods sold and SG&A825 609 
Interest on lease liabilitiesInterest expense, net432 327 
Total lease cost$10,807 $6,721 
(1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial.

Our future lease commitments as of August 27, 2022 included the following related party and non-related party leases:
Operating Leases as of August 27, 2022
Financing Leases
Related Party AmountNon-Related Party AmountTotalNon-Related Party Amount
Fiscal 2023$1,500 $5,463 $6,963 $1,392 
Fiscal 20241,800 5,352 7,152 1,382 
Fiscal 20251,800 5,065 6,865 1,404 
Fiscal 20261,800 4,930 6,730 1,426 
Fiscal 20271,800 4,952 6,752 1,448 
Thereafter4,200 18,031 22,231 2,153 
Total future undiscounted lease payments12,900 43,793 56,693 9,205 
Less: Interest2,568 8,984 11,552 1,541 
Total reported lease liabilities$10,332 $34,809 $45,141 $7,664 
    
Additional information related to our leases is as follows:
August 27, 2022August 28, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$3,666 $2,589 
Operating cash flows from financing leases432 327 
Financing cash flows from financing leases877 572 
Weighted average remaining lease term:
Operating leases8.18.1
Finance leases6.06.8
Weighted average discount rate:
Operating leases5.8 %6.2 %
Finance leases5.9 %6.3 %
Leases Leases
Our leases primarily include operating leases for equipment and real estate, including office space and manufacturing space. Financing leases are primarily for real estate and solar energy producing equipment. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement when it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations.

Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised.

Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, some of the leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of the lease obligations. Fixed payments may contain predetermined fixed rent escalations. For operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
The supplemental balance sheet information related to our leases is as follows:
ClassificationAugust 27, 2022August 28, 2021
Assets
Operating leasesOperating lease assets$41,131 $28,379 
Finance leasesOther long-term assets6,672 4,971 
Total lease assets$47,803 $33,350 
Liabilities
Current: Operating leasesOther current liabilities$4,715 $2,596 
Current: Finance leasesOther current liabilities974 700 
Non-Current: Operating leasesLong-term operating lease liabilities40,426 26,745 
Non-Current: Finance leasesOther long-term liabilities6,690 5,313 
Total lease liabilities$52,805 $35,354 
Operating lease costs incurred are as follows:
Year EndedYear Ended
ClassificationAugust 27, 2022August 28, 2021
Operating lease expense(1)
Costs of goods sold and SG&A$9,550 $5,785 
Finance lease cost:
Depreciation of lease assetsCosts of goods sold and SG&A825 609 
Interest on lease liabilitiesInterest expense, net432 327 
Total lease cost$10,807 $6,721 
(1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial.

Our future lease commitments as of August 27, 2022 included the following related party and non-related party leases:
Operating Leases as of August 27, 2022
Financing Leases
Related Party AmountNon-Related Party AmountTotalNon-Related Party Amount
Fiscal 2023$1,500 $5,463 $6,963 $1,392 
Fiscal 20241,800 5,352 7,152 1,382 
Fiscal 20251,800 5,065 6,865 1,404 
Fiscal 20261,800 4,930 6,730 1,426 
Fiscal 20271,800 4,952 6,752 1,448 
Thereafter4,200 18,031 22,231 2,153 
Total future undiscounted lease payments12,900 43,793 56,693 9,205 
Less: Interest2,568 8,984 11,552 1,541 
Total reported lease liabilities$10,332 $34,809 $45,141 $7,664 
    
Additional information related to our leases is as follows:
August 27, 2022August 28, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$3,666 $2,589 
Operating cash flows from financing leases432 327 
Financing cash flows from financing leases877 572 
Weighted average remaining lease term:
Operating leases8.18.1
Finance leases6.06.8
Weighted average discount rate:
Operating leases5.8 %6.2 %
Finance leases5.9 %6.3 %