Thereafter

[Table of Contents](#i5830b7ab005a40ba82b3f528662067ae_7)Advance Auto Parts, Inc. and SubsidiariesNotes to the Condensed Consolidated Financial Statements(Amounts presented in thousands, except per share data, unless otherwise stated)(Unaudited)  
  
Debt Guarantees  
We are a guarantor of loans made by banks to various independently owned Carquest-branded stores that are customers of ours. These loans totaled $51.5 million and $31.7 million as of July 16, 2022 and January 1, 2022 and are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized by these agreements was $119.3 million and $86.9 million as of July 16, 2022 and January 1, 2022. We believe that the likelihood of performance under these guarantees is remote.  
7.    Leases  
Substantially all of our leases are for facilities and vehicles. The initial term for facilities is typically five to ten years, with renewal options at five-year intervals, with the exercise of lease renewal options at our sole discretion. Our vehicle and equipment leases are typically three to six years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.  
Operating lease liabilities consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | July 16, 2022 |  | January 1, 2022 |
| Total operating lease liabilities | $ | 2,760,660  |  |  | $ | 2,802,772  |  |
| Less: Current portion of operating lease liabilities | (464,657) |  |  | (465,121) |  |
| Noncurrent operating lease liabilities | $ | 2,296,003  |  |  | $ | 2,337,651  |  |

  
The current portion of operating lease liabilities is included in Other current liabilities in the accompanying Condensed Consolidated Balance Sheets.  
Total lease cost is included in Cost of sales and Selling, general and administrative expenses (“SG&A”) in the accompanying Condensed Consolidated Statements of Operations and is recorded net of immaterial sublease income. Total lease cost was comprised of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Twelve Weeks Ended |  | Twenty-Eight Weeks Ended |
|  | July 16, 2022 |  | July 17, 2021 |  | July 16, 2022 |  | July 17, 2021 |
| Operating lease cost | $ | 130,003  |  |  | $ | 124,184  |  |  | $ | 303,038  |  |  | $ | 286,169  |  |
| Variable lease cost | 41,977  |  |  | 34,195  |  |  | 95,273  |  |  | 77,720  |  |
| Total lease cost | $ | 171,980  |  |  | $ | 158,379  |  |  | $ | 398,311  |  |  | $ | 363,889  |  |

  
The future maturity of lease liabilities as of July 16, 2022 were as follows:  


|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Remainder of 2022 |  | $ | 213,584  |  |
| 2023 |  | 555,398  |  |
| 2024 |  | 491,276  |  |
| 2025 |  | 456,336  |  |
| 2026 |  | 345,486  |  |
| Thereafter |  | 1,035,356  |  |
| Total lease payments |  | 3,097,436  |  |
| Less: Imputed interest |  | (336,776) |  |
| Total operating lease liabilities |  | $ | 2,760,660  |  |

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