Leases

9 Months Ended

Dec. 28, 2019

The following table summarizes ROU assets and lease liabilities recorded on the Company's consolidated balance sheet as of December 28, 2019:



	December 28, 2019		Location Recorded on Balance Sheet
	(millions)
Assets:
Operating leases	$	1,573.4	Operating lease right-of-use assets
Finance leases	171.1		Property and equipment, net
Total lease assets	$	1,744.5
Liabilities:
Operating leases:
Current portion	$	287.5	Current operating lease liabilities
Non-current portion	1,637.5		Long-term operating lease liabilities
Total operating lease liabilities	1,925.0
Finance leases:
Current portion	10.3		Accrued expenses and other current liabilities
Non-current portion	191.1		Other non-current liabilities
Total finance lease liabilities	201.4
Total lease liabilities	$	2,126.4

The following table summarizes the composition of net lease cost during the three-month and nine-month periods ended December 28, 2019:



	December 28, 2019
	Three Months Ended			Nine Months Ended			Location Recorded in Earnings
	(millions)
Operating lease cost	$	81.5		$	241.6		^(a)
Finance lease costs:
Depreciation of leased assets	4.5			13.4			SG&A expenses
Accretion of lease liabilities	2.0			6.0			Interest expense
Variable lease cost	82.5			236.2			^(b)
Short-term lease cost	0.6			4.1			SG&A expenses
Sublease income	(0.7		)	(2.4		)	Restructuring and other charges
Total lease cost	$	170.4		$	498.9

^(a)

During the three months ended December 28, 2019, $1.1 million included within cost of goods sold, $77.3 million included within SG&A expenses, and $3.1 million included within restructuring and other charges. During the nine months ended December 28, 2019, $3.4 million included within cost of goods sold, $229.7 million included within SG&A expenses, and $8.5 million included within restructuring and other charges.

^(b)

During the three months ended December 28, 2019, $1.3 million included within cost of goods sold, $80.6 million included within SG&A expenses, and $0.6 million included within restructuring and other charges. During the nine months ended December 28, 2019, $3.4 million included within cost of goods sold, $230.7 million included within SG&A expenses, and $2.1 million included within restructuring and other charges.

In accordance with lease accounting guidance in effect prior to its adoption of ASU 2016-02, during the three-month and nine-month periods ended December 29, 2018, the Company recognized rent expense of approximately $115 million and $337 million, respectively, net of insignificant sublease income, related to its operating leases, which included contingent rental charges of approximately $53 million and $146 million, respectively. Such amounts do not include expense recognized related to non-lease components.

The following table summarizes certain cash flow information related to the Company's leases for the nine months ended ended December 28, 2019:



	December 28, 2019
	Nine Months Ended
	(millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	289.2
Operating cash flows from finance leases	5.9
Financing cash flows from finance leases	10.6

See Note 19 for supplemental non-cash information related to ROU assets obtained in exchange for new lease liabilities.

The following table provides a maturity analysis summary of the Company's lease liabilities recorded on the consolidated balance sheet as of December 28, 2019:



	December 28, 2019
	Operating Leases			Finance Leases
	(millions)
Remainder of Fiscal 2020	$	57.5		$	4.7
Fiscal 2021	354.2			16.6
Fiscal 2022	318.5			22.6
Fiscal 2023	286.4			22.4
Fiscal 2024	258.7			22.3
Fiscal 2025 and thereafter	829.5			175.0
Total lease payments	2,104.8			263.6
Less: interest	(179.8		)	(62.2		)
Total lease liabilities	$	1,925.0		$	201.4

Additionally, the Company had approximately $123 million of future payment obligations related to executed lease agreements for which the related leases had not yet commenced as of December 28, 2019.

The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating and finance leases recorded on the consolidated balance sheet as of December 28, 2019:

See Note 3 for discussion of the Company's accounting policies related to its leasing activities.

December 28, 2019

Operating
Leases

Finance
Leases

Weighted-average remaining lease term (years)

Weighted-average discount rate