Leases (Notes)

3 Months Ended

Mar. 23, 2019

Operating Lease Disclosure Lessee and Lessor [Text Block]

Leases

Lessee

We determine whether an arrangement is a lease at inception. We have operating leases for plants, warehouses, distribution centers, storage facilities, offices and other facilities, as well as machinery and equipment, including fleet. Our leases have remaining lease terms of one year to 20 years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We have lease agreements that contain both lease and non-lease components. For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance).

Components of lease cost are as follows:



	12 Weeks Ended
	3/23/2019
Operating lease cost ^(a)	$	85
Variable lease cost ^(b)	$	19
Short-term lease cost ^(c)	$	84


(a)	Includes right-of-use asset amortization of $74 million.


(b)	Primarily related to adjustments for inflation, common area maintenance and property tax.


(c)	Not recorded on our balance sheet.

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:



	12 Weeks Ended
	3/23/2019
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	96
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	59

Supplemental balance sheet information related to our operating leases is as follows:



	Balance Sheet Classification	3/23/2019
Right-of-use assets	Other assets	$	1,416
Current lease liabilities	Accounts payable and other current liabilities	$	380
Non-current lease liabilities	Other liabilities	$	1,069

Weighted-average remaining lease term and discount rate for our operating leases are as follows:



	3/23/2019
Weighted-average remaining lease term	6 years
Weighted-average discount rate	4	%

Maturities of lease liabilities by fiscal year for our operating leases are as follows:



2019^(a)	$	343
2020	394
2021	288
2022	207
2023	126
2024 and beyond	304
Total lease payments	1,662
Less: Imputed interest	(213		)
Present value of lease liabilities	$	1,449


(a)	Excluding the 12 weeks ended March 23, 2019.

As of December 29, 2018, minimum lease payments under non-cancelable operating leases by period were expected to be as follows:



2019	$	459
2020	406
2021	294
2022	210
2023	161
2024 and beyond	310
Total	$	1,840

A summary of rent expense for the fiscal years ended December 29, 2018 and December 30, 2017 was as follows:



	2018		2017
Rent expense	$	771	$	742

Lessor

We have various arrangements for certain foodservice and vending equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.