Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

NOTE 5 – LEASES

Operating lease commitments:

See Note 1 for further information concerning the Company’s adoption of Accounting Standard Codification 842 - Leases.

The following table summarizes Total lease cost for the year ended December 31, 2019, which was primarily included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income (in thousands):

	For the Year Ended
	December 31, 2019
Operating lease cost	$	320,480
Short-term operating lease cost		5,899
Variable operating lease cost		76,027
Sublease income		(4,112)
Total lease cost	$	398,294

The following table summarizes the Net rent expense amounts, prior to the adoption of Accounting Standard Codification 842 – Leases, for the years ended December 31, 2018 and 2017, which were included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income (in thousands):

	For the Year Ended
	December 31,
	2018		2017
Minimum operating lease expense	$	305,613	$	289,245
Contingent rents		806		1,049
Other lease related occupancy costs		14,449		12,478
Total rent expense		320,868		302,772
Less: sublease income		3,585		4,158
Net rent expense	$	317,283	$	298,614

The following table summarizes other lease related information for the year ended December 31, 2019:

	For the Year Ended
	December 31, 2019
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows from operating leases (in thousands)	$	318,048
Right-of-use assets obtained in exchange for new operating lease liabilities (in thousands)	$	233,584
Weighted-average remaining lease term - operating leases		10.4	Years
Weighted-average discount rate - operating leases		4.1	%

The following table identifies the future minimum lease payments under all of the Company’s operating leases for each of the next five years, and in the aggregate thereafter, and reconciles to the present value of the “Operating lease liabilities, less current portion” included in the accompanying Consolidated Balance Sheet as of December 31, 2019 (in thousands):

	December 31, 2019
	Related Parties		Non-Related Parties		Total
2020	$	4,765	$	311,285	$	316,050
2021		4,347		294,909		299,256
2022		3,590		271,256		274,846
2023		3,218		240,815		244,033
2024		1,472		211,352		212,824
Thereafter		2,801		1,087,409		1,090,210
Total operating lease payments		20,193		2,417,026		2,437,219
Less: present value discount		2,049		463,812		465,861
Total operating lease liabilities		18,144		1,953,214		1,971,358
Less: current portion of operating lease liabilities		4,765		311,296		316,061
Operating lease liabilities, less current portion	$	13,379	$	1,641,918	$	1,655,297

See Note 14 for further information concerning the Company’s related party operating leases.

The future minimum lease payments under the Company’s operating leases, in the table above, do not include potential amounts for percentage rent and other variable operating lease related costs and have not been reduced by expected future minimum sublease income under non-cancelable subleases, which was approximately $18.6 million as of December 31, 2019.  

The present value discount component of the future minimum lease payments under the Company’s operating leases, in the table above, was primarily calculated using the Company’s incremental borrowing rate based on information available at the lease commencement or modification date.  Inputs for the calculation of the Company’s incremental borrowing rate include valuations and yields of U.S. domestic investment grade corporate bonds and the applicable credit spread over comparable U.S. Treasury rates, adjusted to a collateralized basis by estimating the credit spread improvement that would result from an upgrade of one ratings classification. For leases that commenced prior to January 1, 2019, the incremental borrowing rate used was as of January 1, 2019.  When the implicit rate of a lease is available, the implicit rate is used in the calculation and not the Company’s incremental borrowing rate.