Leases

12 Months Ended

Oct. 02, 2020

Leases [Abstract]

Leases

LeasesThe components of lease expense (reflected in selling, general and administrative expenses) for the year ended October 2, 2020 were as follows (in thousands):

	Year Ended
Lease cost
Operating lease cost	$	169,967
Variable lease cost	35,083
Sublease income	(14,719)
Total lease cost	$	190,331

Supplemental information related to the Company's leases for the year ended October 2, 2020 was as follows (in thousands):

	Year Ended
Cash paid for amounts included in the measurements of lease liabilities	$	195,345
Right-of-use assets obtained in exchange for new operating lease liabilities	$	66,761
Weighted average remaining lease term - operating leases	7 years
Weighted average discount rate - operating leases	2.7%

Total remaining lease payments under the Company's leases for each of the succeeding years is as follows (in thousands):

Fiscal Year	Operating Leases
2021	$	184,967
2022	163,166
2023	144,668
2024	127,472
2025	107,866
Thereafter	266,539
	994,678
Less Interest	(95,164)
	$	899,514

Right-of-Use and Other Long-Lived Asset Impairment

In the fourth fiscal quarter of 2020, as a result and in consideration of the impacts of the COVID-19 pandemic and the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio as part of its transformation initiatives related to real estate and staffing programs. These initiatives during the fourth quarter resulted in the actual abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company. In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360.

As a result of the analysis, the Company recognized an impairment loss during the fourth quarter of fiscal 2020 of $162 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the fiscal year ended October 2, 2020. The impairment loss recorded includes $127 million related to right-of-use lease assets and $35 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements.

The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs. The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflects the level of risk associated with receiving future cash flows.

Leases

LeasesThe components of lease expense (reflected in selling, general and administrative expenses) for the year ended October 2, 2020 were as follows (in thousands):

	Year Ended
Lease cost
Operating lease cost	$	169,967
Variable lease cost	35,083
Sublease income	(14,719)
Total lease cost	$	190,331

Supplemental information related to the Company's leases for the year ended October 2, 2020 was as follows (in thousands):

	Year Ended
Cash paid for amounts included in the measurements of lease liabilities	$	195,345
Right-of-use assets obtained in exchange for new operating lease liabilities	$	66,761
Weighted average remaining lease term - operating leases	7 years
Weighted average discount rate - operating leases	2.7%

Total remaining lease payments under the Company's leases for each of the succeeding years is as follows (in thousands):

Fiscal Year	Operating Leases
2021	$	184,967
2022	163,166
2023	144,668
2024	127,472
2025	107,866
Thereafter	266,539
	994,678
Less Interest	(95,164)
	$	899,514

Right-of-Use and Other Long-Lived Asset Impairment

In the fourth fiscal quarter of 2020, as a result and in consideration of the impacts of the COVID-19 pandemic and the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio as part of its transformation initiatives related to real estate and staffing programs. These initiatives during the fourth quarter resulted in the actual abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company. In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360.

As a result of the analysis, the Company recognized an impairment loss during the fourth quarter of fiscal 2020 of $162 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the fiscal year ended October 2, 2020. The impairment loss recorded includes $127 million related to right-of-use lease assets and $35 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements.

The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs. The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflects the level of risk associated with receiving future cash flows.