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Leases | 9 Months Ended
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Jun. 27, 2021
Leases [Abstract] |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain information technology equipment and the related ROU and lease liabilities were immaterial, and included in "Other current liabilities" and "Other long-term liabilities" accordingly on our consolidated balance sheets at June 27, 2021 and September 27, 2020. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. 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. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. The components of lease costs are as follows:
| Three Months Ended |  | Nine Months Ended
| June 27, 2021 |  | June 28, 2020 |  | June 27, 2021 |  | June 28, 2020
| (in thousands)
Operating lease cost | $ | 22,423 |  |  | $ | 21,152 |  |  | $ | 67,132 |  |  | $ | 63,919 |
Sublease income | (21) |  |  | (573) |  |  | (81) |  |  | (1,688) |
Other | — |  |  | 18 |  |  | — |  |  | 54 |
Total lease cost | $ | 22,402 |  |  | $ | 20,597 |  |  | $ | 67,051 |  |  | $ | 62,285 |
Supplemental cash flow information related to leases is as follows:
| Three Months Ended |  | Nine Months Ended
| June 27, 2021 |  | June 28, 2020 |  | June 27, 2021 |  | June 28, 2020
| (in thousands)
Operating cash flows for operating leases | $ | 20,217 |  |  | $ | 18,634 |  |  | $ | 56,616 |  |  | $ | 60,138 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 9,672 |  |  | $ | 7,505 |  |  | $ | 43,394 |  |  | $ | 305,141 |
Supplemental balance sheet and other information related to leases are as follows:
| Balance at
| June 27, 2021 |  | September 27, 2020
| (in thousands)
Operating leases: |  |  |
Right-of-use assets | $ | 213,236 |  |  | $ | 239,396 |
Lease liabilities: |  |  |
Current | 64,911 |  |  | 69,650 |
Long-term | 173,080 |  |  | 191,955 |
Total operating lease liabilities | $ | 237,991 |  |  | $ | 261,605 |
Weighted-average remaining lease term: |  |  |
Operating leases | 5 years |  | 5 years
Weighted-average discount rate: |  |  |
Operating leases | 2.3 | % |  | 2.5 | %
As of June 27, 2021, we do not have any material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities is as follows:
| Balance at
| June 27, 2021 |  | September 27, 2020
| (in thousands)
2021 | $ | 18,813 |  |  | $ | 75,074 |
2022 | 70,378 |  |  | 64,972 |
2023 | 49,755 |  |  | 44,733 |
2024 | 36,221 |  |  | 30,991 |
2025 | 26,810 |  |  | 21,466 |
Beyond | 52,411 |  |  | 44,169 |
Total lease payments | 254,388 |  |  | 281,405 |
Less: imputed interest | (16,397) |  |  | (19,800) |
Total present value of lease liabilities | $ | 237,991 |  |  | $ | 261,605 |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain information technology equipment and the related ROU and lease liabilities were immaterial, and included in "Other current liabilities" and "Other long-term liabilities" accordingly on our consolidated balance sheets at June 27, 2021 and September 27, 2020. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. 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. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. The components of lease costs are as follows:
| Three Months Ended |  | Nine Months Ended
| June 27, 2021 |  | June 28, 2020 |  | June 27, 2021 |  | June 28, 2020
| (in thousands)
Operating lease cost | $ | 22,423 |  |  | $ | 21,152 |  |  | $ | 67,132 |  |  | $ | 63,919 |
Sublease income | (21) |  |  | (573) |  |  | (81) |  |  | (1,688) |
Other | — |  |  | 18 |  |  | — |  |  | 54 |
Total lease cost | $ | 22,402 |  |  | $ | 20,597 |  |  | $ | 67,051 |  |  | $ | 62,285 |
Supplemental cash flow information related to leases is as follows:
| Three Months Ended |  | Nine Months Ended
| June 27, 2021 |  | June 28, 2020 |  | June 27, 2021 |  | June 28, 2020
| (in thousands)
Operating cash flows for operating leases | $ | 20,217 |  |  | $ | 18,634 |  |  | $ | 56,616 |  |  | $ | 60,138 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 9,672 |  |  | $ | 7,505 |  |  | $ | 43,394 |  |  | $ | 305,141 |
Supplemental balance sheet and other information related to leases are as follows:
| Balance at
| June 27, 2021 |  | September 27, 2020
| (in thousands)
Operating leases: |  |  |
Right-of-use assets | $ | 213,236 |  |  | $ | 239,396 |
Lease liabilities: |  |  |
Current | 64,911 |  |  | 69,650 |
Long-term | 173,080 |  |  | 191,955 |
Total operating lease liabilities | $ | 237,991 |  |  | $ | 261,605 |
Weighted-average remaining lease term: |  |  |
Operating leases | 5 years |  | 5 years
Weighted-average discount rate: |  |  |
Operating leases | 2.3 | % |  | 2.5 | %
As of June 27, 2021, we do not have any material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities is as follows:
| Balance at
| June 27, 2021 |  | September 27, 2020
| (in thousands)
2021 | $ | 18,813 |  |  | $ | 75,074 |
2022 | 70,378 |  |  | 64,972 |
2023 | 49,755 |  |  | 44,733 |
2024 | 36,221 |  |  | 30,991 |
2025 | 26,810 |  |  | 21,466 |
Beyond | 52,411 |  |  | 44,169 |
Total lease payments | 254,388 |  |  | 281,405 |
Less: imputed interest | (16,397) |  |  | (19,800) |
Total present value of lease liabilities | $ | 237,991 |  |  | $ | 261,605 |

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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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