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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 29, 2019

Accounting Policies [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following tables represent the Company’s financial assets (in thousands), measured at fair value on a recurring basis as of June 29, 2019:

																	Reported as
	Adjusted Basis Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Estimated Fair Value				Cash and Cash Equivalents				Short-Term Investments
Cash	$	408,784			$	—			$	—			$	408,784			$	408,784			$	—
Level 1:
Certificates of deposit	180,000				—				—				180,000				—				180,000
Subtotal	180,000				—				—				180,000				—				180,000
Level 2:
None	—				—				—				—				—				—
Level 3:
None	—				—				—				—				—				—
Total assets measured at fair value	$	588,784			$	—			$	—			$	588,784			$	408,784			$	180,000

Property, Plant and Equipment

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows:

	Useful Lives
Aircraft and components	10 to 20 years
Buildings	39 years
Building improvements	7 to 15 years
Computer equipment	2 to 6 years
Demonstration units	3 years
Furniture and office equipment	2 to 6 years
Leasehold improvements	Lesser of useful life or term of lease
Machinery and equipment	5 to 10 years
Tooling	3 years
Vehicles	5 years

Property and equipment, net, consists of the following (in thousands):

	June 29, 2019				December 29, 2018
Building and building improvements	$	91,595			$	88,449
Machinery and equipment	58,077				54,525
Land	40,216				23,762
Aircraft and vehicles	25,595				25,555
Computer equipment	18,649				16,582
Leasehold improvements	17,167				16,428
Tooling	14,742				14,212
Furniture and office equipment	10,670				10,459
Demonstration units	474				470
Construction-in-progress (CIP)	32,125				13,320
Total property and equipment	309,310				263,762
Accumulated depreciation and amortization	(106,500		)		(97,790		)
Property and equipment, net	$	202,810			$	165,972

Changes in Product Warranty Accrual

Changes in the product warranty accrual were as follows (in thousands):

	Six Months Ended
	June 29, 2019				June 30, 2018
Warranty accrual, beginning of period	$	1,910			$	1,149
Accrual for warranties issued	1,877				643
Changes to pre-existing warranties (including changes in estimates)(1)	1,601				551
Settlements made	(719		)		(502		)
Warranty accrual, end of period	$	4,669			$	1,841

______________

⁽¹⁾

In connection with its adoption of ASC 842 on December 30, 2018, the Company recorded an adjustment to pre-existing warranties of $2.5 million related to equipment previously capitalized under its deferred equipment agreements where the embedded leases were treated as operating leases under prior guidance. See “Recently Adopted Accounting Pronouncements” to these condensed consolidated financial statements for additional information related to the Company’s adoption of ASC 842.

Changes in Accumulated Other Comprehensive Loss

The change in accumulated other comprehensive loss was as follows (in thousands):

	Six Months Ended   June 29, 2019
Accumulated other comprehensive loss, beginning of period	$	(6,199	)
Unrealized gains from foreign currency translation	(285		)
Accumulated other comprehensive loss, end of period	$	(6,484	)

Reconciliation of Basic and Diluted Net Income Per Share

A reconciliation of basic and diluted net income per share is as follows (in thousands, except per share amounts):

	Three Months Ended								Six Months Ended
	June 29, 2019				June 30, 2018				June 29, 2019				June 30, 2018
Net income	$	44,888			$	43,853			$	94,210			$	89,483
Basic net income per share:
Weighted-average shares outstanding - basic	53,356				51,999				53,283				52,047
Net income per basic share	$	0.84			$	0.84			$	1.77			$	1.72
Diluted net income per share:
Weighted-average shares outstanding - basic	53,356				51,999				53,283				52,047
Diluted share equivalent: stock options, RSUs and PSUs	3,710				3,743				3,657				3,795
Weighted-average shares outstanding - diluted	57,066				55,742				56,940				55,842
Net income per diluted share	$	0.79			$	0.79			$	1.65			$	1.60

Supplemental Cash Flow Information

Supplemental cash flow information includes the following (in thousands):

	Six Months Ended
	June 29, 2019				June 30, 2018
Cash paid during the year for:
Interest	$	73			$	229
Income taxes	26,975				21,771
Capitalized operating leases	3,409				—
Non-cash operating activities:
ROU assets obtained in exchange for lease liabilities(1)	$	24,093			$	—
Non-cash investing activities:
Unpaid purchases of property, plant and equipment	$	1,216			$	663
Non-cash financing activities:
Unsettled common stock proceeds from option exercises	$	283			$	—
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	408,784			$	429,647
Restricted cash	155				147
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	408,939			$	429,794

______________

⁽¹⁾

In connection with its adoption of ASC 842 on December 30, 2018, the Company recorded a lessee operating lease ROU asset of $22.5 million. See “Recently Adopted Accounting Pronouncements” to these condensed consolidated financial statements for additional information related to the Company’s adoption of ASC 842.

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