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LEASES (Tables)

6 Months Ended

Jul. 02, 2023

The components of lease expense for the three months ended July 2, 2023 and July 3, 2022 were as follows:


		Three Months Ended
Lease expense	Classification	July 2, 2023		July 3, 2022
Operating lease cost	Cost of sales or SM&A (1)	$	12,320	$	12,710
Finance lease cost:
Amortization of ROU assets	Depreciation and amortization (1)	1,834		1,768
Interest on lease liabilities	Interest expense, net	1,092		1,036
Net lease cost (2)		$	15,246	$	15,514

The components of lease expense for the six months ended July 2, 2023 and July 3, 2022 were as follows:


		Six Months Ended
Lease expense	Classification	July 2, 2023		July 3, 2022
Operating lease cost	Cost of sales or SM&A (1)	$	24,363	$	25,497
Finance lease cost:
Amortization of ROU assets	Depreciation and amortization (1)	3,696		3,450
Interest on lease liabilities	Interest expense, net	2,192		2,053
Net lease cost (2)		$	30,251	$	31,000

(1)Supply chain-related amounts were included in cost of sales.

(2)Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.

Information regarding our lease terms and discount rates were as follows:


	July 2, 2023		December 31, 2022
Weighted-average remaining lease term (years)
Operating leases	14.6		15.0
Finance leases	27.3		27.7

Weighted-average discount rate
Operating leases	3.5	%	3.2	%
Finance leases	6.2	%	6.1	%

Supplemental balance sheet information related to leases were as follows:


Leases	Classification	July 2, 2023		December 31, 2022
Assets
Operating lease ROU assets	Other non-current assets	$	322,697	$	326,472

Finance lease ROU assets, at cost	Property, plant and equipment, gross	86,377		86,703
Accumulated amortization	Accumulated depreciation	(17,023)		(14,543)
Finance lease ROU assets, net	Property, plant and equipment, net	69,354		72,160

Total leased assets		$	392,051	$	398,632

Liabilities
Current
Operating	Accrued liabilities	$	33,867	$	31,787
Finance	Current portion of long-term debt	4,686		4,285
Non-current
Operating	Other long-term liabilities	290,655		294,849
Finance	Long-term debt	68,545		69,194
Total lease liabilities		$	397,753	$	400,115

The components of certain asset accounts included within our Consolidated Balance Sheets are as follows:


	July 2, 2023		December 31, 2022
Inventories:
Raw materials	$	461,428	$	372,612
Goods in process	187,536		137,298
Finished goods	1,012,112		855,217
Inventories at First In First Out	1,661,076		1,365,127
Adjustment to Last In First Out	(275,652)		(192,008)
Total inventories	$	1,385,424	$	1,173,119

Prepaid expenses and other:
Prepaid expenses	$	169,948	$	143,888

Other current assets	115,103		128,307
Total prepaid expenses and other	$	285,051	$	272,195

Property, plant and equipment:
Land	$	160,089	$	155,963
Buildings	1,565,474		1,545,053
Machinery and equipment	3,767,778		3,592,251
Construction in progress	538,265		416,220
Property, plant and equipment, gross	6,031,606		5,709,487
Accumulated depreciation	(3,016,730)		(2,939,785)
Property, plant and equipment, net	$	3,014,876	$	2,769,702

Other non-current assets:
Pension	$	54,737	$	53,495
Capitalized software, net	338,499		320,034

Operating lease ROU assets	322,697		326,472
Investments in unconsolidated affiliates	126,114		133,029
Other non-current assets	119,694		111,959
Total other non-current assets	$	961,741	$	944,989


The components of certain liability and stockholders’ equity accounts included within our Consolidated Balance Sheets are as follows:
	July 2, 2023		December 31, 2022
Accounts payable:
Accounts payable—trade	$	663,853	$	636,472
Supplier finance program obligations	147,125		105,293
Other	203,080		228,793
Total accounts payable	$	1,014,058	$	970,558

Accrued liabilities:
Payroll, compensation and benefits	$	203,337	$	293,865
Advertising, promotion and product allowances	346,580		337,024
Operating lease liabilities	33,867		31,787

Other	244,423		169,842
Total accrued liabilities	$	828,207	$	832,518

Other long-term liabilities:
Post-retirement benefits liabilities	$	140,327	$	147,174
Pension benefits liabilities	27,283		27,696
Operating lease liabilities	290,655		294,849
Other	256,267		250,023
Total other long-term liabilities	$	714,532	$	719,742

Accumulated other comprehensive loss:
Foreign currency translation adjustments	$	(89,029)	$	(110,364)
Pension and post-retirement benefit plans, net of tax	(109,233)		(118,254)
Cash flow hedges, net of tax	(22,779)		(23,715)
Total accumulated other comprehensive loss	$	(221,041)	$	(252,333)

The maturity of our lease liabilities as of July 2, 2023 were as follows:

The maturity of our lease liabilities as of July 2, 2023 were as follows:

Supplemental cash flow and other information related to leases were as follows:


	Six Months Ended
	July 2, 2023		July 3, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22,702	$	23,783
Operating cash flows from finance leases	2,192		2,053
Financing cash flows from finance leases	2,349		2,473

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	14,500	$	6,317
Finance leases	292		4,192