LEASE OBLIGATIONS, COMMITMENTS AND GUARANTEES

Lease Obligations

We lease facilities and equipment under non-cancelable operating leases. The terms of each lease agreement vary and may contain renewal or purchase options. Rental payments under operating leases are charged to expense on the straight-line basis over the period of the lease. Rental expense under operating leases of real estate, machinery, vehicles and other equipment was $47.1 million, $46.5 million and $42.3 million in fiscal 2013, 2012 and 2011, respectively.

Future rental commitments under non-cancelable operating leases as of April 28, 2013 are as follows:



Fiscal Year	(in millions)
2014	$	41.9
2015	30.5
2016	24.3
2017	17.0
2018	15.4
Thereafter	37.5
Total	$	166.6

As of April 28, 2013, future minimum lease payments under capital leases were approximately $26.6 million. The present value of the future minimum lease payments was $26.2 million. The long-term portion of capital lease obligations was $25.2 million and $26.1 million as of April 28, 2013 and April 29, 2012, respectively, and the current portion was $1.0 million and $1.0 million as of April 28, 2013 and April 29, 2012, respectively.

Commitments

We have agreements, expiring through fiscal 2022, to use cold storage warehouses owned by partnerships, of which we are 50% partners. We have agreed to pay prevailing competitive rates for use of the facilities, subject to aggregate guaranteed minimum annual fees. In fiscal 2013, 2012 and 2011, we paid $16.6 million, $14.0 million and $18.2 million, respectively, in fees for use of the facilities. We had investments in the partnerships of $2.6 million as of April 28, 2013, and $2.2 million as of April 29, 2012, respectively.

We have purchase commitments with certain livestock producers that obligate us to purchase all the livestock that these producers deliver. Other arrangements obligate us to purchase a fixed amount of livestock. We also use independent farmers and their facilities to raise hogs produced from our breeding stock in exchange for a performance-based service fee payable upon delivery. We estimate the future obligations under these commitments based on available commodity livestock futures prices and internal projections about future hog prices, expected quantities delivered and anticipated performance. Our estimated future obligations under these commitments are as follows:



Fiscal Year	(in millions)
2014	$	1,829.0
2015	1,325.8
2016	1,081.7
2017	929.4
2018	911.4

As of April 28, 2013, we were also committed to purchase approximately $480.3 million under forward grain contracts payable in fiscal 2014.

We had $53.9 million of committed funds related to approved capital expenditure projects as of April 28, 2013. These projects are expected to be funded with cash flows from operations and/or borrowings under credit facilities.

Guarantees

As part of our business, we are a party to various financial guarantees and other commitments as described below. These arrangements involve elements of performance and credit risk that are not included in the consolidated balance sheets as of April 28, 2013. We could become liable in connection with these obligations depending on the performance of the guaranteed party or the occurrence of future events that we are unable to predict. If we consider it probable that we will become responsible for an obligation, we will record the liability on our consolidated balance sheet.

As of April 28, 2013, we continue to guarantee $10.2 million of leases that were transferred to JBS S.A. in connection with the sale of Smithfield Beef, Inc. Some of these lease guarantees may be released in the near future and others may remain in place until the leases expire through February 2022.