In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). UNIFI adopted the new lease guidance utilizing the modified retrospective transition method, applied at the date of adoption, recording existing leases as of the effective date, July 1, 2019. Under this method, no adjustment to comparative prior periods is required and, accordingly, financial statement information and disclosures required under Topic 842 will not be provided for dates and periods prior to July 1, 2019. UNIFI made no adjustment to the July 1, 2019 opening retained earnings balance for fiscal 2020.

UNIFI adopted the following practical expedients and elected the following accounting policies related to this standard update:

UNIFI routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties. The lease terms range from 1 to 15 years with various options for renewal. There are no residual value guarantees or sub-leases related to these leases. The adoption of this standard resulted in the recognition of operating lease right-of-use assets of $9,802 and corresponding lease liabilities of $10,105 with the difference adjusting prepayments and accruals on the consolidated balance sheet as of July 1, 2019. UNIFI’s accounting for finance leases remained substantially unchanged. The standard did not materially impact operating results or liquidity. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included below.

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at September 29, 2019:

Classification	Balance Sheet Location	September 29, 2019
Lease Assets
Operating lease assets	Operating lease assets	$	8,718
Finance lease assets	Property, plant & equipment, net		27,601
Total lease assets		$	36,319

Lease Liabilities
Current operating lease liabilities	Current operating lease liabilities	$	2,791
Current finance lease liabilities	Current portion of long-term debt		4,738
Total current lease liabilities		$	7,529

Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	$	6,224
Noncurrent finance lease liabilities	Long-term debt		5,649
Total noncurrent lease liabilities		$	11,873

Total lease liabilities		$	19,402

The following table sets forth the components of UNIFI’s total lease cost for the three months ended September 29, 2019:

	For the Three Months Ended
Lease Cost	September 29, 2019
Operating lease cost	$	853
Variable lease cost		90
Finance lease cost:
Amortization of lease assets		527
Interest on lease liabilities		100
Short-term lease cost		341
Total lease cost	$	1,911

As of September 29, 2019, UNIFI was committed to commence leasing certain transportation equipment during the second quarter of fiscal 2020. UNIFI anticipates this equipment will qualify as an estimated $5,400 in additional finance leases and will replace approximately $1,600 of existing operating lease assets under a penalty-free early termination agreement.

The following table presents supplemental information related to leases at September 29, 2019:

	For the Three Months Ended
Other Information	September 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	853
Financing cash flows used by finance leases	$	1,608
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	85
Leased assets obtained in exchange for new finance lease liabilities	$	878

UNIFI calculates its operating lease liabilities and finance lease liabilities entered into after the adoption of the new lease standard based upon UNIFI’s incremental borrowing rate (the “IBR”). When determining the IBR, we consider our centralized treasury function and our current credit profile. We then make adjustments to this rate for securitization, the length of the lease term, and leases denominated in foreign currencies. Generally, the IBR for each jurisdiction is the specific risk-free rate for the respective jurisdiction incremented for UNIFI’s corporate credit risk.

The following table sets forth UNIFI's weighted average remaining lease term in years and discount rate percentage used in the calculation of its outstanding lease liabilities as of September 29, 2019:

Weighted Average Remaining Lease Term and Discount Rate	September 29, 2019
Weighted average remaining lease term (years):
Operating leases		4.1
Finance leases		3.1
Weighted average discount rate:
Operating leases		3.7	%
Finance leases		3.8	%

Future minimum finance lease payments and future minimum payments under non-cancelable operating leases (with initial lease terms in excess of one year) under Topic 842 as of September 29, 2019 by fiscal year were:

Maturity of Lease Liabilities	Finance Leases			Operating Leases
Fiscal 2020 (excluding the three months ended September 29, 2019)	$	4,274		$	2,330
Fiscal 2021		3,011			2,709
Fiscal 2022		2,706			1,679
Fiscal 2023		331			1,247
Fiscal 2024		331			1,110
Fiscal years thereafter		1,015			680
Total minimum lease payments	$	11,668		$	9,755
Less estimated executory costs		(626	)		—
Less interest		(655	)		(740	)
Present value of net minimum lease payments		10,387			9,015
Less current portion of lease obligations		(4,738	)		(2,791	)
Long-term portion of lease obligations	$	5,649		$	6,224

As reported in the 2019 Form 10-K (under the previous accounting guidance), future minimum capital lease payments and future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of June 30, 2019 by fiscal year were:

	Capital Leases			Operating Leases
Fiscal 2020	$	5,917		$	3,164
Fiscal 2021		2,870			2,731
Fiscal 2022		2,565			1,492
Fiscal 2023		189			878
Fiscal 2024		189			755
Fiscal years thereafter		675			309
Total minimum lease payments	$	12,405		$	9,329
Less estimated executory costs		(644	)
Less interest		(643	)
Present value of net minimum capital lease payments		11,118
Less current portion of capital lease obligations		(5,519	)
Long-term portion of capital lease obligations	$	5,599

Rental expenses incurred under the operating leases and included in operating income consist of the following:

	For the Fiscal Year Ended
	June 30, 2019		June 24, 2018		June 25, 2017
Rental expenses	$	4,915	$	4,835	$	4,357