Company: FWRG
Filing Date: 2025-04-08
Form Type: ARS
Source: 0001789940-25-000033
Chunk: 116

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-04-08
Form: ARS
Chunk 116
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.42% on the notional amount and will receive payments from the counterparties based on the three-month SOFR rate. The fair value measurement of the interest rate swaps was based on the contractual terms and used observable market- based inputs. The interest rate swaps were valued using a discounted cash flow analysis on the expected cash flows using observable inputs including interest rate curves and credit spreads. Although the majority of the inputs used to value the instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and the counterparties. The Company has determined that the impact of the credit valuation adjustments was not significant to the overall valuation. As a result, the derivative was classified as Level 2 of the fair value hierarchy. Amounts reported in Other comprehensive income (loss) related to the interest rate swaps will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the fiscal years ended December 29, 2024 and December 31, 2023, a total of $1.0 million and $0.5 million was reclassified from Other comprehensive income (loss) as a reduction to interest expense, respectively. Over the next 12 months, the Company estimates that $0.2 million will be reclassified as an increase to interest expense. FIRST WATCH RESTAURANT GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 77

12. Leases The following table includes a detail of lease assets and liabilities: (in thousands) Consolidated Balance Sheets Classification DECEMBER 29, 2024 DECEMBER 31, 2023 Operating lease right-of-use assets Operating lease right-of-use assets $ 527,674 $ 420,001 Finance lease assets Property, fixtures and equipment, net 2,724 1,033 Total lease assets $ 530,398 $ 421,034 Operating lease liabilities (1) - current Current portion of operating lease liabilities 55,704 40,281 Operating lease liabilities - non- current Operating lease liabilities 555,576 441,290 Finance lease liabilities - current Current portion of long-term debt 587 628 Finance lease liabilities - non-current Long-term debt, net 2,179 448 Total lease liabilities $ 614,046 $ 482,647 _____________ (1) Excludes all variable lease expense. The components of lease expense were as follows