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LEASES

12 Months Ended

Dec. 29, 2019



	Capital Lease Obligations			Noncancellable Operating Lease Obligations
For the fiscal years ending December:
2019	$	2,971		$	84,220
2020	1,033			63,196
2021	36			53,908
2022	3			45,557
2023	—			36,136
Thereafter	—			66,637
Net minimum lease payments	4,043			$	349,654
Amount representing interest	(337		)
Present value of net minimum lease payments	$	3,706

Lease liabilities as of December 29, 2019 are included in our Consolidated Balance Sheets as follows (in thousands):



	Operating Leases		Finance Leases^(a)
Accrued expenses and other current liabilities	$	66,239	$	—
Current maturities of long-term debt	—		486
Noncurrent operating lease liability, less current maturities	235,382		—
Long-term debt, less current maturities	—		1,664
Total lease liabilities	$	301,621	$	2,150


(a)	Additional information regarding finance lease assets is included in “Note 10. Property, Plant and Equipment.”

As of December 29, 2019, the Company had immaterial operating leases and did not have finance leases that have not commenced.

LEASES

The Company is party to operating lease agreements for warehouses, office space, vehicle maintenance facilities and livestock growing farms in the U.S., distribution centers, hatcheries and office space in Mexico and farms, processing facilities and office space in the U.K. and Europe. Additionally, the Company leases equipment, over-the-road transportation vehicles and other assets in all three reportable segments. The Company is also party to a limited number of finance lease agreements in the U.S.

Our leases have remaining lease terms of one year to 16 years, some of which may include options to extend the lease for up to one year and some of which may include options to terminate the lease within one year. The exercise of options to extend lease terms is at our sole discretion. Certain leases also include options to purchase the leased property.

Certain lease agreements include rental payment increases over the lease term that can be either fixed or variable. Fixed payment increases and variable payment increases based on an index or rate are included in the initial lease liability using the index or rate at commencement date. Variable payment increases not based on an index are recognized as incurred. Certain lease agreements contain residual value guarantees, primarily vehicle and transportation equipment leases.

The following table presents components of lease expense (in thousands). Operating lease cost, finance lease amortization and finance lease interest are respectively included in Cost of sales, Selling, general and administrative expense and Interest expense, net of capitalized interest in the Consolidated and Combined Statements of Income.



	Fifty-Two Weeks Ended
	December 29, 2019
Operating lease cost^(a)	$	99,242
Amortization of finance lease assets	167
Interest on finance leases	32
Short-term lease cost	59,225
Variable lease cost	3,031
Net lease cost	$	161,697


(a)	Sublease income is immaterial and not included in operating lease costs.

Rent expense was $86.0 million for the fifty-two weeks ended December 30, 2018.

The weighted-average remaining lease term and discount rate for lease liabilities included in our Consolidated Balance Sheets are as follows:



	December 29, 2019
Weighted-average remaining lease term (years):
Operating leases	5.77
Finance leases	4.54
Weighted-average discount rate:
Operating leases	4.80	%
Finance leases	5.21	%

Supplemental cash flow information related to leases is as follows (in thousands):



	Fifty-Two Weeks Ended
	December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	100,473
Operating cash flow from finance leases	32
Financing cash flows from finance leases	167

Operating lease assets obtained in exchange for operating lease liabilities	$	34,648
Finance lease assets obtained in exchange for finance lease liabilities	2,182

Future minimum lease payments under noncancellable leases as of December 29, 2019 are as follows (in thousands):



	Operating Leases			Finance Leases
For the fiscal years ending December:
2020	$	81,544		$	586
2021	67,082			494
2022	57,210			494
2023	46,897			494
2024	34,648			346
Thereafter	60,008			—
Total future minimum lease payments	347,389			2,414
Less: imputed interest	(45,768		)	(264		)
Present value of lease liabilities	$	301,621		$	2,150

Future minimum lease payments under capital and noncancellable operating leases with terms exceeding one year as of December 30, 2018 were as follows (in thousands):



	Capital Lease Obligations			Noncancellable Operating Lease Obligations
For the fiscal years ending December:
2019	$	2,971		$	84,220
2020	1,033			63,196
2021	36			53,908
2022	3			45,557
2023	—			36,136
Thereafter	—			66,637
Net minimum lease payments	4,043			$	349,654
Amount representing interest	(337		)
Present value of net minimum lease payments	$	3,706

Lease liabilities as of December 29, 2019 are included in our Consolidated Balance Sheets as follows (in thousands):



	Operating Leases		Finance Leases^(a)
Accrued expenses and other current liabilities	$	66,239	$	—
Current maturities of long-term debt	—		486
Noncurrent operating lease liability, less current maturities	235,382		—
Long-term debt, less current maturities	—		1,664
Total lease liabilities	$	301,621	$	2,150


(a)	Additional information regarding finance lease assets is included in “Note 10. Property, Plant and Equipment.”

As of December 29, 2019, the Company had immaterial operating leases and did not have finance leases that have not commenced.