Leases

12 Months Ended

Aug. 27, 2022

Leases

Leases

Note M – Leases

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

(in thousands)	Classification	August 27, 2022		August 28, 2021
Assets:
Operating	Operating lease right-of-use assets	$	2,918,817	$	2,718,712
Finance	Property and equipment		404,442		383,736
Total lease assets		$	3,323,259	$	3,102,448
Liabilities:
Current:
Operating	Current portion of operating lease liabilities	$	243,407	$	236,568
Finance	Accrued expenses and other		92,877		89,932
Noncurrent:
Operating	Operating lease liabilities, less current portion		2,837,973		2,632,842
Finance	Other long-term liabilities		217,428		186,122
Total lease liabilities		$	3,391,685	$	3,145,464

Accumulated amortization related to finance lease assets was $97.2 million as of August 27, 2022 and $107.0 million as of August 28, 2021.

Lease costs for finance and operating leases for the 52 weeks ended August 27, 2022 and August 28, 2021 are as follows:

		For the year ended
(in thousands)	Statement of Income Location	August 27, 2022		August 28, 2021
Finance lease cost:
Amortization of lease assets	Depreciation and amortization	$	65,212	$	53,377
Interest on lease liabilities	Interest expense, net		4,351		2,957
Operating lease cost(1)	Selling, general and administrative expenses		401,000		371,109
Total lease cost		$	470,563	$	427,443

(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 27, 2022 having initial or remaining lease terms in excess of one year are as follows:

	Finance		Operating
(in thousands)	Leases		Leases		Total
2023	$	94,226	$	344,900	$	439,126
2024		73,476		376,444		449,920
2025		64,033		356,757		420,790
2026		45,023		330,200		375,223
2027		15,258		305,640		320,898
Thereafter		44,693		2,236,418		2,281,111
Total lease payments		336,709		3,950,359		4,287,068
Less: Interest		(26,404)		(868,979)		(895,383)
Present value of lease liabilities	$	310,305	$	3,081,380	$	3,391,685

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

	August 27, 2022
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised:
Finance leases – real estate	24
Finance leases – vehicles	4
Operating leases	13
Weighted-average discount rate:
Finance leases – real estate	3.76	%
Finance leases – vehicles	1.17	%
Operating leases	3.57	%

Cash paid for amounts included in the measurement of operating lease liabilities of $316.0 million and $300.6 million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal years 2022 and 2021, respectively.

As of August 27, 2022, 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 $27.2 million and $48.1 million for real estate and vehicles, respectively, and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2023 to fiscal 2024.