XML 38 R18.htm IDEA: XBRL DOCUMENT

Lease Obligations

12 Months Ended

Dec. 31, 2024

11. Lease Obligations

The Company leases most of the properties for its store locations through 236 operating leases and 18 finance leases. The Company also leases billboards and certain of its equipment. The related operating lease assets and finance lease assets are included in the operating lease assets and property and equipment, respectively, in the accompanying consolidated balance sheets.

As of December 31, 2024 and 2023, finance lease assets of $120.0 million and $100.4 million, respectively, were included in property and equipment, net in the accompanying consolidated balance sheets.

The following table presents certain information related to the costs for leases where the Company is the lessee (in thousands):


	Year Ended December 31,
	2024		2023
Operating lease cost	$	116,370	$	118,082
Finance lease cost:
Amortization of finance lease assets		11,160		3,253
Interest on finance lease liabilities		9,285		6,069
Short-term lease cost		1,839		1,940
Variable lease cost		23,874		22,913
Sublease income		(3,355)		(2,726)
Net lease costs	$	159,173	$	149,531

The following table presents supplemental cash flow information related to leases (in thousands):


	Year Ended December 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	118,848	$	117,160
Operating cash flows for finance leases		9,285		6,064
Financing cash flows for finance leases		7,520		5,496
Lease assets obtained in exchange for lease liabilities:
New, remeasured and terminated operating leases	$	63,228	$	59,858
New, remeasured and terminated finance leases		30,771		20,557

The following table presents other information related to leases:


	December 31,
	2024		2023
Weighted average remaining lease term:
Operating leases	11.2	years	11.3	years
Financing leases	13.7	years	17.4	years
Weighted average discount rate:
Operating leases	7.1	%	7.1	%
Financing leases	6.4	%	6.0	%

The following reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities in the accompanying consolidated balance sheet as of December 31, 2024 (in thousands):


	Operating		Finance
	Leases		Leases
2025	$	118,276	$	15,612
2026		117,606		15,531
2027		110,931		14,978
2028		107,374		14,598
2029		103,684		14,644
Thereafter		656,331		135,821
Total lease payments		1,214,202		211,184
Less: Imputed interest		(388,096)		(73,136)
Total lease obligations		826,106		138,048
Less: current portion		(61,993)		(7,044)
Noncurrent lease obligations	$	764,113	$	131,004

Sale-Leaseback Arrangement Recorded as Financing Transaction

On February 8, 2022, FRHP sold three properties for a total sale price of $28.0 million. Concurrent with the sale of these properties, the Company entered into three separate twenty-year lease agreements, whereby the Company agreed to lease back the properties from the acquiring company. Under each lease agreement, FR has four consecutive options to extend the lease term for additional periods of five years for each option. This transaction is accounted for as a financing transaction. The Company recorded a liability for the amount received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining non-land assets will be zero at the end of the initial lease terms. The financial liability is included in other long-term liabilities in the consolidated balance sheets as of December 31, 2024 and 2023.