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Leases | 3 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
Leases | LeasesThe Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction contracts, IT assets and vehicles. The Company’s leases have remaining lease terms of one year to thirteen years. The Company’s lease obligations are primarily for the use of office space and are primarily operating leases. Certain of the Company’s leases contain renewal, extension, or termination options. The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term. The Company generally considers the base term to be the term provided in the contract. None of the Company’s lease agreements contain material options to purchase the lease property, material residual value guarantees, or material restrictions or covenants Long-term project asset and vehicle leases (leases with terms greater than twelve months), along with all real estate and IT asset leases, are recorded on the consolidated balance sheet at the present value of the minimum lease payments not yet paid, net of impairments taken. Because the Company primarily acts as a lessee and the rates implicit in its leases are not readily determinable, the Company generally uses its incremental borrowing rate on the lease commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the right-of-use ("ROU") asset and lease liability and are initially measured using the index or rate at the lease commencement date. Other variable lease payments, such as payments based on use and for property taxes, insurance, or common area maintenance that are based on actual assessments are excluded from the ROU asset and lease liability and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. Certain lease contracts contain nonlease components such as maintenance and utilities. The Company has made an accounting policy election, as allowed under ASC 842-10-15-37 and discussed above, to capitalize both the lease component and nonlease components of its contracts as a single lease component for all of its right-of-use assets. Short-term project asset and vehicle leases (project asset and vehicle leases with an initial term of twelve months or less or leases that are cancellable by the lessee and lessor without significant penalties) are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects. These leases are entered into at agreed upon hourly, daily, weekly or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months. The components of lease expense (reflected in selling, general and administrative expenses) for th e three months ended December 31, 2021 and January 1, 2021 were as follows (in thousands):
|  | Three Months Ended
|  | December 31, 2021 |  | January 1, 2021
Lease expense |  |  |  |
Operating lease expense |  | $ | 40,538 |  |  | $ | 39,444 |
Variable lease expense |  | 7,084 |  |  | 8,183 |
Sublease income |  | (3,668) |  |  | (3,396) |
Total lease expense |  | $ | 43,954 |  |  | $ | 44,231 |
Supplemental information related to the Company's leases for the three months ended December 31, 2021 was as follows (in thousands):
|  | Three Months Ended
|  | December 31, 2021
Cash paid for amounts included in the measurements of lease liabilities |  | $ | 65,430
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 1,262
Weighted average remaining lease term - operating leases |  | 7 years
Weighted average discount rate - operating leases |  | 2.7%
Total remaining lease payments under the Company's leases for the remainder of fiscal 2022 and for the succeeding years is as follows (in thousands):
Fiscal Year |  | Operating Leases
2022 |  | $ | 141,807 |
2023 |  | 159,136 |
2024 |  | 146,064 |
2025 |  | 122,723 |
2026 |  | 105,223 |
Thereafter |  | 278,300 |
|  | 953,253 |
Less Interest |  | (84,016) |
|  | $ | 869,237 |
Right-of-Use and Other Long-Lived Asset Impairment In the first quarter of fiscal 2022, as a result of the Company's transformation initiatives including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio. These initiatives during the current quarter resulted in the abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company. In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360. As a result of the analysis, the Company recognized an impairment loss during the first quarter of fiscal 2022 of $72.3 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the current fiscal quarter. The impairment loss recorded includes $54.9 million related to right-of-use lease assets and $17.4 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements. The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs. The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflect the level of risk associated with receiving future cash flows.
Leases | LeasesThe Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction contracts, IT assets and vehicles. The Company’s leases have remaining lease terms of one year to thirteen years. The Company’s lease obligations are primarily for the use of office space and are primarily operating leases. Certain of the Company’s leases contain renewal, extension, or termination options. The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term. The Company generally considers the base term to be the term provided in the contract. None of the Company’s lease agreements contain material options to purchase the lease property, material residual value guarantees, or material restrictions or covenants Long-term project asset and vehicle leases (leases with terms greater than twelve months), along with all real estate and IT asset leases, are recorded on the consolidated balance sheet at the present value of the minimum lease payments not yet paid, net of impairments taken. Because the Company primarily acts as a lessee and the rates implicit in its leases are not readily determinable, the Company generally uses its incremental borrowing rate on the lease commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an index or rate. These variable lease payments are included in the calculation of the right-of-use ("ROU") asset and lease liability and are initially measured using the index or rate at the lease commencement date. Other variable lease payments, such as payments based on use and for property taxes, insurance, or common area maintenance that are based on actual assessments are excluded from the ROU asset and lease liability and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions. Certain lease contracts contain nonlease components such as maintenance and utilities. The Company has made an accounting policy election, as allowed under ASC 842-10-15-37 and discussed above, to capitalize both the lease component and nonlease components of its contracts as a single lease component for all of its right-of-use assets. Short-term project asset and vehicle leases (project asset and vehicle leases with an initial term of twelve months or less or leases that are cancellable by the lessee and lessor without significant penalties) are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects. These leases are entered into at agreed upon hourly, daily, weekly or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months. The components of lease expense (reflected in selling, general and administrative expenses) for th e three months ended December 31, 2021 and January 1, 2021 were as follows (in thousands):
|  | Three Months Ended
|  | December 31, 2021 |  | January 1, 2021
Lease expense |  |  |  |
Operating lease expense |  | $ | 40,538 |  |  | $ | 39,444 |
Variable lease expense |  | 7,084 |  |  | 8,183 |
Sublease income |  | (3,668) |  |  | (3,396) |
Total lease expense |  | $ | 43,954 |  |  | $ | 44,231 |
Supplemental information related to the Company's leases for the three months ended December 31, 2021 was as follows (in thousands):
|  | Three Months Ended
|  | December 31, 2021
Cash paid for amounts included in the measurements of lease liabilities |  | $ | 65,430
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 1,262
Weighted average remaining lease term - operating leases |  | 7 years
Weighted average discount rate - operating leases |  | 2.7%
Total remaining lease payments under the Company's leases for the remainder of fiscal 2022 and for the succeeding years is as follows (in thousands):
Fiscal Year |  | Operating Leases
2022 |  | $ | 141,807 |
2023 |  | 159,136 |
2024 |  | 146,064 |
2025 |  | 122,723 |
2026 |  | 105,223 |
Thereafter |  | 278,300 |
|  | 953,253 |
Less Interest |  | (84,016) |
|  | $ | 869,237 |
Right-of-Use and Other Long-Lived Asset Impairment In the first quarter of fiscal 2022, as a result of the Company's transformation initiatives including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio. These initiatives during the current quarter resulted in the abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company. In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360. As a result of the analysis, the Company recognized an impairment loss during the first quarter of fiscal 2022 of $72.3 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the current fiscal quarter. The impairment loss recorded includes $54.9 million related to right-of-use lease assets and $17.4 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements. The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs. The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflect the level of risk associated with receiving future cash flows.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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