Leases

3 Months Ended

Mar. 30, 2019

7. Leases

The Company has operating leases for manufacturing plants, warehouses, offices, machinery and equipment, and farmland. The Company subleases the farmland to third-party growers under operating leases. The Company's operating leases have remaining noncancelable lease terms of less than one year to approximately 15 years, and typically require monthly rental payments that may be adjusted annually to give effect to inflation. Real estate operating leases typically include options to extend the leases for up to 10 years. Machinery and equipment operating leases typically include purchase options for the fair market value of the underlying asset at the end of the lease term. Certain other leases for machinery and equipment include nominal purchase options at the end of the lease term that are reasonably certain of being exercised. These leases are classified as finance leases and have remaining lease terms of less than one year to approximately four years.

The following tables present supplemental information related to leases recognized in the consolidated financial statements:

			Quarter ended
			March 30, 2019
			$
Lease Costs
	Operating lease cost		5,203
	Finance lease cost
		Depreciation of right-of-use assets	297
		Interest on lease liabilities	36
	Sublease income		(120	)
	Net lease cost		5,416

			March 30, 2019
			$
Balance Sheet Classification
	Operating leases
		Operating lease right-of-use assets	75,503

		Current portion of operating lease liabilities	17,432
		Operating lease liabilities	58,910
		Total operating lease liabilities	76,342

	Finance leases
		Property, plant and equipment, gross	9,923
		Accumulated depreciation	(4,840	)
		Property, plant and equipment, net	5,083

		Current portion of long-term debt	1,262
		Long-term debt	1,933
		Total finance lease liabilities	3,195

			Quarter ended
			March 30, 2019
				$
Cash Flow Information
	Cash paid for amounts included in measurement of lease liabilities
		Operating cash flows from operating leases		5,378
		Operating cash flows from finance leases		36
		Financing cash flows from finance leases		392

	Right-of-use assets obtained in exchange for lease liabilities
		Operating leases		-
		Finance Leases		-

			March 30, 2019
Other Information
	Weighted-average remaining lease term (years)
		Operating leases		5.6
		Finance leases		2.0

	Weighted-average discount rate⁽¹⁾
		Operating leases		8.9%
		Finance leases		4.2%

(1) In determining the present value of lease payments, the Company uses the implicit rate in the lease when that rate is readily determinable, which is the case for most of the Company's machinery and equipment leases. In all other cases, including real estate leases, the Company uses its incremental borrowing rate. The Company applied the incremental borrowing rate as at December 30, 2018 (the first day of fiscal 2019) to leases that commenced prior to that date. Discount rates are determined on a lease-by-lease basis.

		Operating leases		Finance leases
		$		$
Maturities of Lease Liabilities
	Remainder of 2019	13,822		1,107
	2020	17,346		715
	2021	14,436		715
	2022	12,611		715
	2023	8,389		179
	Thereafter	47,852		-
	Total lease payments	114,456		3,431
	Less: imputed interest	(38,114	)	(236	)
	Total lease liabilities	76,342		3,195

As at March 30, 2019, the Company had commitments for approximately $15 million of right-of-use assets for which the leases had not commenced.