| Leases |
At September 30, 2023 and December 31, 2022, the Company’s lease assets and lease liabilities, primarily for its studios and corporate offices, were as follows:
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September 30, 2023 |
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December 31, 2022 |
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Assets: |
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Operating leases |
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$ |
55,414 |
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$ |
75,696 |
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Finance leases |
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10 |
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54 |
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Total lease assets |
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$ |
55,424 |
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$ |
75,750 |
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Liabilities: |
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Current |
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Operating leases |
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$ |
9,804 |
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$ |
17,955 |
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Finance leases |
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9 |
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31 |
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Noncurrent |
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Operating leases |
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56,643 |
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68,099 |
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Finance leases |
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0 |
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7 |
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Total lease liabilities |
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$ |
66,456 |
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$ |
86,092 |
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For the three and nine months ended September 30, 2023 and October 1, 2022, the components of the Company’s lease expense were as follows:
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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October 1, |
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September 30, |
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October 1, |
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2023 |
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2022 |
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2023 |
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2022 |
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Operating lease cost: |
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Fixed lease cost |
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$ |
4,312 |
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$ |
9,071 |
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$ |
17,423 |
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$ |
24,974 |
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Lease termination (benefit) cost |
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(538 |
) |
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(189 |
) |
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11,512 |
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1,912 |
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Variable lease cost |
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15 |
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7 |
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46 |
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20 |
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Total operating lease cost |
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$ |
3,789 |
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$ |
8,889 |
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$ |
28,981 |
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$ |
26,906 |
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Finance lease cost: |
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Amortization of leased assets |
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5 |
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25 |
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$ |
43 |
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$ |
86 |
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Interest on lease liabilities |
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0 |
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4 |
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1 |
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6 |
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Total finance lease cost |
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$ |
5 |
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$ |
29 |
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$ |
44 |
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$ |
92 |
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Total lease cost |
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$ |
3,794 |
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$ |
8,918 |
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$ |
29,025 |
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$ |
26,998 |
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As previously disclosed, in conjunction with the continued rationalization of its real estate portfolio, the Company entered into subleases with commencement dates in the first quarter of fiscal 2023. The Company recorded $931 and $2,455 of sublease income for the three and nine months ended September 30, 2023, respectively, as an offset to general and administrative expenses. At September 30, 2023 and December 31, 2022, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:
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September 30, 2023 |
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December 31, 2022 |
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Weighted Average Remaining Lease Term (years) |
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Operating leases |
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7.42 |
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6.90 |
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Finance leases |
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0.62 |
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1.00 |
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Weighted Average Discount Rate |
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Operating leases |
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7.48 |
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7.03 |
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Finance leases |
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3.91 |
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3.52 |
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The Company’s leases have remaining lease terms of 0 to 9 years with a weighted average lease term of 7.42 years as of September 30, 2023. At September 30, 2023, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:
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Operating
Leases |
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Finance
Leases |
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Total |
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Remainder of fiscal 2023 |
$ |
2,778 |
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$ |
2 |
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$ |
2,780 |
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Fiscal 2024 |
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15,307 |
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7 |
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15,314 |
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Fiscal 2025 |
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13,054 |
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— |
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13,054 |
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Fiscal 2026 |
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10,056 |
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— |
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10,056 |
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Fiscal 2027 |
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9,590 |
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— |
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9,590 |
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Fiscal 2028 |
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9,277 |
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— |
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9,277 |
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Thereafter |
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26,919 |
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— |
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26,919 |
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Total lease payments |
$ |
86,981 |
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$ |
9 |
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$ |
86,990 |
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Less imputed interest |
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20,534 |
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0 |
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20,534 |
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Present value of lease liabilities |
$ |
66,447 |
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$ |
9 |
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$ |
66,456 |
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Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and October 1, 2022 were as follows:
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Nine Months Ended |
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September 30, |
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October 1, |
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2023 |
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|
2022 |
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Cash paid for amounts included in the measurement of lease liabilities |
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Operating cash flows from operating leases |
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$ |
17,826 |
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$ |
24,244 |
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Operating cash flows from finance leases |
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$ |
1 |
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$ |
6 |
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Financing cash flows from finance leases |
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$ |
43 |
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$ |
86 |
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Lease assets (modified) obtained in exchange for (modified) new operating lease liabilities |
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$ |
(6,683 |
) |
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$ |
11,160 |
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Lease assets obtained in exchange for new finance lease liabilities |
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$ |
— |
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$ |
44 |
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