Aveanna Healthcare Holdings, Inc. Leases Disclosure
12. LEASES
The Company has historically entered into operating leases for local branches, its corporate headquarters, and certain equipment. The Company’s current leases have expiration dates through 2030. Certain of these lease arrangements have free rent periods and/or escalating rent payment provisions. Rent is recognized on a straight-line basis over the lease term. Certain of the Company’s leases include termination options and renewal options for periods ranging from to five years. Because the Company is not reasonably certain to exercise termination options, the options are not considered in determining the lease term, and payments for the full lease term are included in lease payments. Because the Company is not reasonably certain to exercise renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s leases do not contain material residual value guarantees.
Management exercises judgment in the determination of whether a financial arrangement includes a lease and in determining the appropriate discount rates to be applied to leases. When available, the Company uses the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, the Company uses its incremental borrowing rate.
Amounts reported in the accompanying consolidated balance sheets as of December 30, 2023 and December 31, 2022 for operating leases were as follows (amounts in thousands):
|
|
As of |
|
||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
||
Operating lease right of use assets |
|
$ |
49,499 |
|
$ |
54,601 |
|
Current portion of operating lease liabilities |
|
$ |
14,881 |
|
$ |
13,070 |
|
Operating lease liabilities, less current portion |
|
|
39,818 |
|
|
45,818 |
|
Total operating lease liabilities |
|
$ |
54,699 |
|
$ |
58,888 |
|
Lease Costs
The components of lease cost for the fiscal years ended December 30, 2023 and December 31, 2022 are as follows (amounts in thousands):
|
|
For the fiscal years ended |
|
||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
||
Operating Lease Costs: |
|
|
|
|
|
||
Operating lease cost |
|
$ |
21,803 |
|
$ |
21,898 |
|
Variable lease costs |
|
|
4,305 |
|
|
3,328 |
|
Short-term lease costs |
|
|
2,460 |
|
|
1,640 |
|
Total lease cost |
|
$ |
28,568 |
|
$ |
26,866 |
|
Supplemental Information
Information related to the Company’s operating lease right of use assets and related operating lease liabilities are as follows (dollar amounts in thousands):
|
|
For the fiscal years ended |
|
||||
|
|
December 30, 2023 |
|
December 31, 2022 |
|
||
Cash payments of operating lease liabilities |
|
$ |
(21,008 |
) |
$ |
(22,626 |
) |
Operating lease right of use assets obtained in exchange for new operating lease liabilities |
|
11,843 |
|
|
20,273 |
|
|
Weighted average remaining lease term |
|
3.74 years |
|
4.27 years |
|
||
Weighted average discount rate |
|
|
8.97 |
% |
|
7.48 |
% |
Maturity of Operating Lease Liabilities
Maturities of operating lease liabilities as of December 30, 2023 are as follows (amounts in thousands):
Year Ending: |
|
|
|
|
|
December 28, 2024 |
|
|
$ |
18,968 |
|
January 3, 2026 |
|
|
|
17,717 |
|
January 2, 2027 |
|
|
|
12,949 |
|
January 1, 2028 |
|
|
|
7,595 |
|
December 30, 2028 |
|
|
|
4,322 |
|
Thereafter |
|
|
|
3,374 |
|
Total undiscounted lease payments |
|
|
|
64,925 |
|
Less: Imputed Interest |
|
|
|
(10,226 |
) |
Total |
|
|
|
54,699 |
|
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 14, 2024 | Showing above |
| 2022 | Mar 28, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.