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LEASES | 12 Months Ended
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May 30, 2021
Leases [Abstract] |
LEASES | 15. LEASES We have operating and finance leases of certain warehouses, plants, land, office space, production and distribution equipment, automobiles, and office equipment. We determine whether an agreement is or contains a lease at lease inception. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. As most of our leases do not provide an implicit interest rate, we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease. We have elected not to separate lease and non-lease components of an agreement for all underlying asset classes prospectively from the ASU 2016-02, Leases, Topic 842 adoption date. Any lease arrangements with an initial term of twelve months or less are not recorded on our Consolidated Balance Sheet. We recognize lease cost for these lease arrangements on a straight-line basis over the lease term. Our lease terms may include options to extend or terminate the lease. We consider these options in determining the lease term used to establish our ROU asset and lease liabilities. A limited number of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases reported in our Consolidated Balance Sheet were as follows:
|  | Operating Leases |
|  | Balance Sheet Location |  | May 30, 2021 |  |  | May 31, 2020 |
ROU assets, net |  | Other assets |  | $ | 188.5 |  |  | $ | 209.3 |
Lease liabilities (current) |  | Other accrued liabilities |  |  | 36.6 |  |  |  | 44.4 |
Lease liabilities (noncurrent) |  | Other noncurrent liabilities |  |  | 188.3 |  |  |  | 206.1 |
|  | Finance Leases |
|  | Balance Sheet Location |  | May 30, 2021 |  |  | May 31, 2020 |
ROU assets, at cost |  | Property, plant and equipment |  | $ | 217.6 |  |  | $ | 220.4 |
Less accumulated depreciation |  | Less accumulated depreciation |  |  | (60.2 | ) |  |  | (53.6 | )
ROU assets, net |  | Property, plant and equipment, net |  |  | 157.4 |  |  |  | 166.8 |
Lease liabilities (current) |  | Current installments of long-term debt |  |  | 23.1 |  |  |  | 22.2 |
Lease liabilities (noncurrent) |  | Senior long-term debt, excluding current installments |  |  | 116.0 |  |  |  | 132.9 |
The components of total lease cost were as follows:
|  |  | 2021 |  |  | 2020 |
Operating lease cost |  |  | $ | 51.0 |  |  | $ | 63.7 |
Finance lease cost |  |  |  |  |  |  |  |  |
Depreciation of leased assets |  |  |  | 19.0 |  |  |  | 15.4 |
Interest on lease liabilities |  |  |  | 8.2 |  |  |  | 9.1 |
Short-term lease cost |  |  |  | 5.1 |  |  |  | 3.8 |
Total lease cost |  |  | $ | 83.3 |  |  | $ | 92.0 |
We recognized accelerated operating lease cost of $9.9 million and impairments of ROU assets of $2.9 million within SG&A expenses in fiscal 2020. These charges are included in the Pinnacle Integration Restructuring Plan. Rent expense under all operating leases was $83.5 million in fiscal 2019. The weighted-average remaining lease terms and weighted-average discount rate for our leases as of May 30, 2021 and May 31, 2020 were as follows:
| Operating Leases |  |  | Finance Leases |
| 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Weighted-average remaining lease term (in years) |  | 8.1 |  |  |  | 8.5 |  |  |  | 7.7 |  |  |  | 8.0 |
Weighted-average discount rate |  | 3.51 | % |  |  | 3.61 | % |  |  | 4.95 | % |  |  | 5.29 | %
Cash flows arising from lease transactions were as follows:
|  |  | 2021 |  |  | 2020 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |
Operating cash outflows from operating leases |  | $ | 56.0 |  |  | $ | 59.5 |
Operating cash outflows from finance leases |  |  | 8.3 |  |  |  | 9.2 |
Financing cash outflows from finance leases |  |  | 24.3 |  |  |  | 22.5 |
ROU assets obtained in exchange for new lease liabilities: |  |  |  |  |  |  |  |  |
Operating leases |  |  | 21.1 |  |  |  | 41.6 |
Finance leases |  |  | 26.1 |  |  |  | 12.2 |
Non-cash issuances of capital lease obligations totaling $23.5 million are excluded from cash flows from investing and financing activities on the Consolidated Statements of Cash Flows for fiscal 2019. Maturities of lease liabilities by fiscal year as of May 30, 2021 were as follows:
| Operating Leases |  |  | Finance Leases |  |  | Total |
2022 | $ | 46.5 |  |  | $ | 28.5 |  |  | $ | 75.0 |
2023 |  | 41.2 |  |  |  | 25.3 |  |  |  | 66.5 |
2024 |  | 32.4 |  |  |  | 20.4 |  |  |  | 52.8 |
2025 |  | 24.4 |  |  |  | 18.3 |  |  |  | 42.7 |
2026 |  | 20.9 |  |  |  | 15.0 |  |  |  | 35.9 |
Later years |  | 102.8 |  |  |  | 63.9 |  |  |  | 166.7 |
Total lease payments |  | 268.2 |  |  |  | 171.4 |  |  |  | 439.6 |
Less: Imputed interest |  | (43.3 | ) |  |  | (32.3 | ) |  |  | (75.6 | )
Total lease liabilities | $ | 224.9 |  |  | $ | 139.1 |  |  | $ | 364.0 |
We have entered into contracts that are or contain a lease that have not yet commenced with aggregate payments totaling $272.2 million as of May 30, 2021. This amount primarily relates to a warehouse facility with a future minimum lease commitment of $257.7 million. We expect to take control of this leased asset in fiscal 2023.

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