Leases (Notes)

12 Months Ended

Oct. 03, 2020

Leases of Lessee Disclosure [Text Block]

LEASES

We lease certain equipment, buildings and land related to transportation, distribution, storage, production, livestock grower assets and office activities. These lease arrangements can be structured as a standard lease agreement or embedded in a service or supply agreement and are primarily classified as operating leases. For further description of our lease accounting policy, refer to Note 1: Business and Summary of Significant Accounting Policies. Operating lease ROU assets and liabilities presented in our Consolidated Balance Sheets were as follows (in millions):



	October 3, 2020
Other Assets	$	532
Other current liabilities	161
Other Liabilities	368

The components of lease costs were as follows (in millions):



	Twelve Months Ended
	October 3, 2020
Operating lease cost (a)	$	199
Variable lease cost (b)	451
Short-term lease cost	38
Total	$	688

(a) Sublease income is immaterial and not deducted from operating lease cost.

(b) Variable lease costs are determined based on volume of output received, flocks placed or other performance metrics.

Other operating lease information includes the following:


Twelve months ended October 3, 2020
Operating cash outflows from operating leases (in millions)	$	211
ROU assets obtained in exchange for new operating lease liabilities (in millions)	$	167
Weighted-average remaining lease term	5 years
Weighted-average discount rate	3		%

At October 3, 2020, future maturities of operating leases were as follows (in millions):



Operating Lease Commitments
2021	$	173
2022	129
2023	88
2024	64
2025	45
2026 and beyond	63
Total undiscounted operating lease payments	$	562
Less: Imputed interest	33
Present value of total operating lease liabilities	$	529

At October 3, 2020, our leases that had not yet commenced were not significant.

Prior Year Lease Disclosures

The following pertains to previously disclosed information set forth in the Company's 2019 Form 10-K, Part II, Item 8, Notes to the Consolidated Financial Statements, Note 20: Commitments and Contingencies.

We lease equipment, properties and certain farms for which total rentals approximated $220 million and $200 million, in fiscal 2019 and 2018, respectively. Most leases have initial terms of up to seven years, some with varying renewal periods. Minimum lease commitments under non-cancelable leases at September 28, 2019 were (in millions):



Operating Lease Commitments
2020	$	159
2021	113
2022	74
2023	49
2024	40
2025 and beyond	54
Total	$	489

We enter into agreements with livestock growers that can have fixed and variable payment structures, but are generally cancelable and based on flocks placed with growers. Livestock grower fixed or estimable non-cancelable commitments at September 28, 2019 were (in millions):




Livestock Grower Commitments
2020	$	253
2021	131
2022	86
2023	58
2024	49
2025 and beyond	122
Total	$	699