MARCUS CORPMCS
MARCUS CORP Leases Disclosure
6. Leases
The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to accounting guidance ASC 842. The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease. The exercise of lease renewal options is done at the Company’s sole discretion. When deemed reasonably certain of exercise, the renewal options are included in the determination of the lease term and related right-of-use asset and lease liability. The depreciable life of the asset is limited to the expected term. The Company’s lease agreements do not contain any residual value guarantees or any restrictions or covenants.
Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, the Company uses the implicit rate in the lease in determining the present value of lease payments. When the lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the fixed rate the Company could borrow for a similar amount, over a similar lease term with similar collateral. The Company recognizes right-of-use assets for all assets subject to operating leases in an amount equal to the operating lease liabilities, adjusted for the balances of long-term prepaid rent, favorable lease intangible assets, deferred lease expense, unfavorable lease liabilities and deferred lease incentive liabilities. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.
The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.
Total lease cost consists of the following:
| Lease Cost | Classification | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||||||||||||||||||||
| Finance lease costs: | ||||||||||||||||||||||||||
| Amortization of finance lease assets | Depreciation and amortization | $ | 2,386 | $ | 2,274 | $ | 2,760 | |||||||||||||||||||
| Interest on lease liabilities | Interest expense | 587 | 664 | 759 | ||||||||||||||||||||||
| $ | 2,973 | $ | 2,938 | $ | 3,519 | |||||||||||||||||||||
| Operating lease costs: | ||||||||||||||||||||||||||
| Operating lease costs | Rent expense | $ | 23,238 | $ | 23,953 | $ | 24,126 | |||||||||||||||||||
| Variable lease cost | Rent expense | 1,812 | 1,724 | 1,892 | ||||||||||||||||||||||
| Short-term lease cost | Rent expense | 193 | 234 | 136 | ||||||||||||||||||||||
| $ | 25,243 | $ | 25,911 | $ | 26,154 | |||||||||||||||||||||
Additional information related to leases is as follows:
| Other Information | Fiscal 2025 | Fiscal 2024 | ||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Financing cash flows from finance leases | $ | 2,742 | $ | 2,470 | ||||||||||
| Operating cash flows from finance leases | 587 | 664 | ||||||||||||
| Operating cash flows from operating leases | 25,552 | 25,183 | ||||||||||||
| Right of use assets obtained in exchange for new lease obligations: | ||||||||||||||
| Finance lease liabilities | 1,098 | 232 | ||||||||||||
| Operating lease liabilities, including from acquisitions | 2,350 | 3,394 | ||||||||||||
| December 31, 2025 | December 26, 2024 | ||||||||||
| Finance leases: | |||||||||||
| Property and equipment – gross | $ | 30,675 | $ | 29,061 | |||||||
| Accumulated depreciation and amortization | (21,350) | (19,078) | |||||||||
| Property and equipment - net | $ | 9,325 | $ | 9,983 | |||||||
Remaining lease terms and discount rates are as follows:
| Lease Term and Discount Rate | December 31, 2025 | December 26, 2024 | ||||||||||||
| Weighted-average remaining lease terms: | ||||||||||||||
| Finance leases | 5 years | 6 years | ||||||||||||
| Operating leases | 10 years | 11 years | ||||||||||||
| Weighted-average discount rates: | ||||||||||||||
| Finance leases | 4.76% | 4.69% | ||||||||||||
| Operating leases | 4.80% | 4.79% | ||||||||||||
Maturities of lease liabilities as of December 31, 2025 are as follows:
| Fiscal Year | Operating Leases | Finance Leases | ||||||||||||
| 2026 | $ | 23,709 | $ | 3,295 | ||||||||||
| 2027 | 23,757 | 2,337 | ||||||||||||
| 2028 | 22,872 | 2,206 | ||||||||||||
| 2029 | 21,386 | 1,762 | ||||||||||||
| 2030 | 18,633 | 1,002 | ||||||||||||
| Thereafter | 100,845 | 2,160 | ||||||||||||
| Total lease payments | 211,202 | 12,762 | ||||||||||||
| Less: amount representing interest | (46,006) | (1,483) | ||||||||||||
| Total lease liabilities | $ | 165,196 | $ | 11,279 | ||||||||||
Deferred rent payments of approximately $450 for the Company’s operating leases are included in the current operating lease obligations as of December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 1, 2024 | |
| 2022 | Mar 2, 2023 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Mar 12, 2019 | |
| 2017 | Mar 13, 2018 | |
| 2016 | Mar 14, 2017 | |
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.