Operating leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating leases | Operating leases The Company leases certain warehouses, equipment, vehicles, and office space primarily through operating lease agreements. The Company recorded operating lease costs of $5 million and $12 million for the quarter and year-to-date period ended September 28, 2024, respectively. Operating lease costs for the quarter and year-to-date period ended September 30, 2023 were immaterial to the consolidated financial statements.
At September 28, 2024 future maturities of operating leases were as follows:
During each of the first three quarters of 2024, the Company entered into lease agreements with unrelated third parties for distribution centers previously leased by Kellanova. The leases were either transferred to the Company or subleased directly from Kellanova as outlined in the Separation and Distribution Agreement. Payments for these leases are made on a monthly basis. Prior to the execution of these leases, use of the distribution centers was managed under the Transition Services Agreement. The new sublease agreement executed in the third quarter of 2024 resulted in an increase to operating lease assets of $34 million, which is recorded within Operating lease assets on the Unaudited Consolidated Balance Sheet. This also resulted in an increase to operating lease liabilities of $34 million, of which $4 million is classified as short-term and included in Other current liabilities and $30 million is classified as Long-term operating lease obligations on the Unaudited Consolidated Balance Sheet. For the year-to-date period ended September 28, 2024, the effect of the new lease agreements resulted in an increase to operating lease assets of $82 million, which is recorded within Operating lease assets on the Unaudited Consolidated Balance Sheet. These leases also resulted in an increase to operating lease liabilities of $82 million, of which $9 million is classified as short-term and included in Other current liabilities and $73 million is classified as Long-term operating lease obligations on the Unaudited Consolidated Balance Sheet.
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