LEASES

12 Months Ended

Jan. 03, 2020

LEASES

The Company adopted ASU 2016-02, Leases, as of December 29, 2018, using the modified retrospective approach. Prior year financial statements were not recast under the new standard and, therefore, certain prior period amounts have been disclosed in conformity with prior year presentation.

Substantially all of Anixter's office and warehouse facilities are leased under operating leases. The Company also leases certain equipment and vehicles primarily as operating leases. A certain number of Anixter's leases are long-term operating leases and expire at various dates through 2038. Lease costs are included within "Operating expenses" in the Company's Consolidated Statements of Income and were as follows:


	Year Ended
(In millions)	January 3, 2020
Lease cost
Operating lease cost	$	79.0
Variable lease cost	22.2
Short-term lease cost	1.2
Total lease cost	$	102.4

Total rental expense was $107.3 million and $100.9 million in 2018 and 2017, respectively.

The weighted-average remaining lease term and weighted-average discount rate under operating leases were as follows:


	January 3, 2020
Lease term and discount rate
Weighted-average remaining lease term	6.5 years
Weighted-average discount rate ^(a)	5.9	%

(a)Upon adoption of ASU 2016-02, the discount rate used for existing leases was established as of December 29, 2018.

Maturities of operating lease liabilities at January 3, 2020 were as follows:


(In millions)
2020	$	75.4
2021	59.2
2022	54.4
2023	40.8
2024	32.0
2025 and thereafter	81.6
Total lease payments	$	343.4
Less imputed interest	61.4
Present value of lease liabilities	$	282.0

Operating lease payments include $17.4 million related to options to extend lease terms that are reasonably certain of being exercised. As of January 3, 2020, the Company has additional leases related to facilities that have not yet commenced of $7.5 million. These operating leases will commence in fiscal year 2020 with lease terms of three to eleven years. Anixter subleases certain real estate to third parties. During the year ended January 3, 2020, the Company recognized income of $1.1 million, which was included within "Operating expenses" in the Company's Consolidated Statements of Income. Aggregate future minimum rentals to be received under non-cancelable subleases at January 3, 2020 were $3.7 million.

During the year ended January 3, 2020, leased assets obtained in exchange for operating lease obligations were $348.3 million. The operating cash outflow for amounts included in the measurement of operating lease obligations was $63.5 million.