Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

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Commitments and Contingencies
9 Months Ended
Sep. 27, 2018
Commitments and Contingencies.  
Commitments and Contingencies

7. Commitments and Contingencies

Lease Commitments

We lease our corporate office, retail locations and distribution centers through F&D, under long‑term operating lease agreements that expire in various years through 2038. Additionally, certain equipment is leased under short‑term operating leases.

Certain lease agreements include escalating rents over the lease terms. We expense rent on a straight‑line basis over the life of the lease, which commences on the date we have the right to control the property. The cumulative expense recognized on a straight‑line basis in excess of the cumulative payments is included in deferred rent in the accompanying balance sheets. Future minimum lease payments under non‑cancelable operating leases (with initial or remaining lease terms in excess of one year) as of September 27, 2018, were:

 

 

 

 

(in thousands)

    

Amount

Thirteen weeks ended December 27, 2018

 

$

24,439

2019

 

 

108,061

2020

 

 

112,264

2021

 

 

108,499

2022

 

 

102,196

Thereafter

 

 

653,461

Total minimum lease payments

 

$

1,108,920

 

Lease expense for the thirty-nine weeks ended September 27, 2018 and September 28, 2017 was approximately $67,990 thousand and $51,956 thousand, respectively.

Litigation

We are subject to other various legal actions, claims and proceedings arising in the ordinary course of business, which may include claims related to general liability, workers’ compensation, product liability, intellectual property and employment-related matters resulting from our business activities. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. These proceedings are not expected to have a material impact on our consolidated financial position, cash flows or results of operations.