XML 33 R22.htm IDEA: XBRL DOCUMENT v3.19.2
Leases (Notes)
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Lessee, Operating Leases [Text Block]
Leases:
We lease certain venues, warehouses, office space and equipment. The leases generally require us to pay minimum rent, property taxes, insurance, and other maintenance costs. Certain lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants
    
Most of the Company's leases generally have initial terms of 10 to 20 years and include one or more options to renew. The exercise of lease renewal options is at our sole discretion and based on our history of exercising renewal lease options, our operating lease liabilities typically assume the exercise of two lease renewal options. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
 
 
June 30, 2019
 
Balance Sheet Classification
(in thousands)
Assets
 
 
Operating
Operating lease right-of-use assets, net (1)
$
537,031

Finance
Property and equipment, net (2)
9,593

Total leased assets
 
$
546,624

 
 
 
Liabilities
 
 
Current
 
 
Operating
Operating lease liability, current portion
$
48,381

Finance
Other current liabilities
777

Noncurrent
 
 
Operating
Operating lease obligations, less current portion
523,598

Finance
Other noncurrent liabilities
11,888

Total leased liabilities
 
$
584,644

__________________
(1) During the three and six months ended June 30, 2019, we recognized impairment charges of $0.2 million against our operating right-of-use lease assets related to three Peter Piper Pizza venues in Oklahoma that were closed in 2018. These impairment charges represent a change in the sublease income assumptions for these locations to reflect a longer than expected period to secure subtenants.
(2) Finance lease assets are recorded net of accumulated amortization of $5.5 million as of June 30, 2019.
As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the current cost of debt on our secured credit facilities at commencement date in determining the present value of lease payments.
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
June 30, 2019
 
June 30, 2019
 
 
Statement of Earnings Classification
 
(in thousands)
 
(in thousands)
Operating lease cost (1)
 
Lease costs
 
$
27,516

 
$
54,543

Operating lease cost (2)
 
General and administrative
 
327

 
650

Finance lease cost
 
 
 
 
 
 
Amortization of leased assets
 
Depreciation and amortization
 
248

 
496

Interest on lease liabilities
 
Net interest expense
 
376

 
757

Net lease cost
 
 
 
$
28,467

 
$
56,446


__________________
(1) Includes common area maintenance charges of $3.6 million and $7.1 million for the three and six months ended June 30, 2019, respectively.
(2) Represents the lease cost associated with operating leases relating to our corporate offices and warehouse facilities.
    
The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of June 30, 2019:
 
 
Operating
Leases (1)
 
Finance
Leases (2)
 
Total
 
 
(in thousands)
Remainder of 2019
 
$
46,438

 
$
2,152

 
$
48,590

2020
 
92,308

 
2,164

 
94,472

2021
 
89,789

 
2,148

 
91,937

2022
 
87,200

 
2,147

 
89,347

2023
 
84,750

 
1,920

 
86,670

After 2023
 
461,590

 
13,331

 
474,921

Total lease payments
 
862,075

 
23,862

 
885,937

Less: interest
 
290,096

 
11,197

 
301,293

Present value of minimum lease payments (3)
 
$
571,979

 
$
12,665

 
$
584,644


__________________
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.
(2) Finance lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.
(3) The present value of minimum operating lease payments of $48.4 million and $523.6 million are included in “Operating lease liability, current portion” and “Operating lease obligations, less current portion”, respectively, in our Consolidated Balance Sheet. The present value of minimum finance lease payments of $0.8 million and $11.9 million are included in “Other current liabilities” and “Other noncurrent liabilities”, respectively, in our Consolidated Balance Sheet.

 
 
Six Months Ended
Lease Term and Discount Rate
June 30, 2019
Weighted average remaining lease term (years):
 
Operating leases
 
10.2

Finance leases
 
11.2

Weighted average discount rate:
 
 
Operating leases
 
8.0
%
Finance leases
 
13.6
%

The following table includes supplemental cash flow information related to leases:
 
 
Six Months Ended
 
June 30, 2019
 
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
43,888

Operating cash flows for finance leases
757

Financing cash flows for finance leases
347

Right-of-use assets obtained in exchange for lease obligations:
 
Operating lease liabilities
 
5,940

Finance lease liabilities
 


The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:
 
Financing
 
Operating
Fiscal Years
(in thousands)
2019
2,182

 
92,435

2020
2,214

 
90,983

2021
2,201

 
88,914

2022
2,184

 
87,183

2023
1,956

 
84,806

After 2023
13,266

 
457,277

Future minimum lease payments
24,003

 
901,598

Less amounts representing interest
(10,996
)
 
 
Present value of future minimum lease payments
13,007

 
 
Less current portion
(677
)
 
 
Finance lease liability, net of current portion
$
12,330

 
 
Lease, Cost [Table Text Block]
 
 
Six Months Ended
 
June 30, 2019
 
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
43,888

Operating cash flows for finance leases
757

Financing cash flows for finance leases
347

Right-of-use assets obtained in exchange for lease obligations:
 
Operating lease liabilities
 
5,940

Finance lease liabilities
 


The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:
 
Financing
 
Operating
Fiscal Years
(in thousands)
2019
2,182

 
92,435

2020
2,214

 
90,983

2021
2,201

 
88,914

2022
2,184

 
87,183

2023
1,956

 
84,806

After 2023
13,266

 
457,277

Future minimum lease payments
24,003

 
901,598

Less amounts representing interest
(10,996
)
 
 
Present value of future minimum lease payments
13,007

 
 
Less current portion
(677
)
 
 
Finance lease liability, net of current portion
$
12,330

 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
June 30, 2019
 
June 30, 2019
 
 
Statement of Earnings Classification
 
(in thousands)
 
(in thousands)
Operating lease cost (1)
 
Lease costs
 
$
27,516

 
$
54,543

Operating lease cost (2)
 
General and administrative
 
327

 
650

Finance lease cost
 
 
 
 
 
 
Amortization of leased assets
 
Depreciation and amortization
 
248

 
496

Interest on lease liabilities
 
Net interest expense
 
376

 
757

Net lease cost
 
 
 
$
28,467

 
$
56,446


__________________
(1) Includes common area maintenance charges of $3.6 million and $7.1 million for the three and six months ended June 30, 2019, respectively.
(2) Represents the lease cost associated with operating leases relating to our corporate offices and warehouse facilities.
    
The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of June 30, 2019:
 
 
Operating
Leases (1)
 
Finance
Leases (2)
 
Total
 
 
(in thousands)
Remainder of 2019
 
$
46,438

 
$
2,152

 
$
48,590

2020
 
92,308

 
2,164

 
94,472

2021
 
89,789

 
2,148

 
91,937

2022
 
87,200

 
2,147

 
89,347

2023
 
84,750

 
1,920

 
86,670

After 2023
 
461,590

 
13,331

 
474,921

Total lease payments
 
862,075

 
23,862

 
885,937

Less: interest
 
290,096

 
11,197

 
301,293

Present value of minimum lease payments (3)
 
$
571,979

 
$
12,665

 
$
584,644


 
 
Six Months Ended
Lease Term and Discount Rate
June 30, 2019
Weighted average remaining lease term (years):
 
Operating leases
 
10.2

Finance leases
 
11.2

Weighted average discount rate:
 
 
Operating leases
 
8.0
%
Finance leases
 
13.6
%
Lessee Lease Balance Sheet Amounts [Table Text Block]
 
 
June 30, 2019
 
Balance Sheet Classification
(in thousands)
Assets
 
 
Operating
Operating lease right-of-use assets, net (1)
$
537,031

Finance
Property and equipment, net (2)
9,593

Total leased assets
 
$
546,624

 
 
 
Liabilities
 
 
Current
 
 
Operating
Operating lease liability, current portion
$
48,381

Finance
Other current liabilities
777

Noncurrent
 
 
Operating
Operating lease obligations, less current portion
523,598

Finance
Other noncurrent liabilities
11,888

Total leased liabilities
 
$
584,644

__________________
(1) During the three and six months ended June 30, 2019, we recognized impairment charges of $0.2 million against our operating right-of-use lease assets related to three Peter Piper Pizza venues in Oklahoma that were closed in 2018. These impairment charges represent a change in the sublease income assumptions for these locations to reflect a longer than expected period to secure subtenants.
(2) Finance lease assets are recorded net of accumulated amortization of $5.5 million as of June 30, 2019.
As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the current cost of debt on our secured credit facilities at commencement date in determining the present value of lease payments.
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
June 30, 2019
 
June 30, 2019
 
 
Statement of Earnings Classification
 
(in thousands)
 
(in thousands)
Operating lease cost (1)
 
Lease costs
 
$
27,516

 
$
54,543

Operating lease cost (2)
 
General and administrative
 
327

 
650

Finance lease cost
 
 
 
 
 
 
Amortization of leased assets
 
Depreciation and amortization
 
248

 
496

Interest on lease liabilities
 
Net interest expense
 
376

 
757

Net lease cost
 
 
 
$
28,467

 
$
56,446


cec_ScheduleofSupplementalCashFlowInformationRelatedtoLeasesTable [Table Text Block]
 
 
Six Months Ended
 
June 30, 2019
 
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
43,888

Operating cash flows for finance leases
757

Financing cash flows for finance leases
347

Right-of-use assets obtained in exchange for lease obligations:
 
Operating lease liabilities
 
5,940

Finance lease liabilities
 

Lessee, Operating Lease, Liability, Maturity [Table Text Block]
 
 
Operating
Leases (1)
 
Finance
Leases (2)
 
Total
 
 
(in thousands)
Remainder of 2019
 
$
46,438

 
$
2,152

 
$
48,590

2020
 
92,308

 
2,164

 
94,472

2021
 
89,789

 
2,148

 
91,937

2022
 
87,200

 
2,147

 
89,347

2023
 
84,750

 
1,920

 
86,670

After 2023
 
461,590

 
13,331

 
474,921

Total lease payments
 
862,075

 
23,862

 
885,937

Less: interest
 
290,096

 
11,197

 
301,293

Present value of minimum lease payments (3)
 
$
571,979

 
$
12,665

 
$
584,644


__________________
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.
(2) Finance lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.
Finance Lease, Liability, Maturity [Table Text Block]
 
 
Operating
Leases (1)
 
Finance
Leases (2)
 
Total
 
 
(in thousands)
Remainder of 2019
 
$
46,438

 
$
2,152

 
$
48,590

2020
 
92,308

 
2,164

 
94,472

2021
 
89,789

 
2,148

 
91,937

2022
 
87,200

 
2,147

 
89,347

2023
 
84,750

 
1,920

 
86,670

After 2023
 
461,590

 
13,331

 
474,921

Total lease payments
 
862,075

 
23,862

 
885,937

Less: interest
 
290,096

 
11,197

 
301,293

Present value of minimum lease payments (3)
 
$
571,979

 
$
12,665

 
$
584,644


__________________
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.
(2) Finance lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude legally binding minimum lease payments for leases signed but not yet commenced.