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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 28, 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 September 28, 2019:

																	Reported as
	Adjusted Basis Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Estimated Fair Value				Cash and Cash Equivalents				Short-Term Investments
Cash	$	513,360			$	—			$	—			$	513,360			$	513,360			$	—
Level 1:
Certificates of deposit	120,000				—				—				120,000				—				120,000
Subtotal	120,000				—				—				120,000				—				120,000
Level 2:
None	—				—				—				—				—				—
Level 3:
None	—				—				—				—				—				—
Total assets measured at fair value	$	633,360			$	—			$	—			$	633,360			$	513,360			$	120,000

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):

	September 28, 2019				December 29, 2018
Building and building improvements	$	91,704			$	88,449
Machinery and equipment	58,582				54,525
Land	40,216				23,762
Aircraft and vehicles	28,818				25,555
Computer equipment	19,214				16,582
Leasehold improvements	17,574				16,428
Tooling	15,070				14,212
Furniture and office equipment	10,708				10,459
Demonstration units	792				470
Construction-in-progress (CIP)	37,309				13,320
Total property and equipment	319,987				263,762
Accumulated depreciation	(110,529		)		(97,790		)
Property and equipment, net	$	209,458			$	165,972

Changes in Product Warranty Accrual

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

	Nine Months Ended
	September 28, 2019				September 29, 2018
Warranty accrual, beginning of period	$	1,910			$	1,149
Accrual for warranties issued	1,920				943
Changes to pre-existing warranties (including changes in estimates)(1)	1,404				779
Settlements made	(1,276		)		(974		)
Warranty accrual, end of period	$	3,958			$	1,897

______________

⁽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):

	Nine Months Ended   September 28, 2019
Accumulated other comprehensive loss, beginning of period	$	(6,199	)
Unrealized gains from foreign currency translation adjustments	(1,595		)
Accumulated other comprehensive loss, end of period	$	(7,794	)

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								Nine Months Ended
	September 28, 2019				September 29, 2018				September 28, 2019				September 29, 2018
Net income	$	49,085			$	57,126			$	143,295			$	146,609
Basic net income per share:
Weighted-average shares outstanding - basic	53,535				52,432				53,367				52,046
Net income per basic share	$	0.92			$	1.09			$	2.69			$	2.82
Diluted net income per share:
Weighted-average shares outstanding - basic	53,535				52,432				53,367				52,046
Diluted share equivalent: stock options, RSUs and PSUs	3,727				3,805				3,688				3,829
Weighted-average shares outstanding - diluted	57,262				56,237				57,055				55,875
Net income per diluted share	$	0.86			$	1.02			$	2.51			$	2.62

Supplemental Cash Flow Information

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

	Nine Months Ended
	September 28, 2019				September 29, 2018
Cash paid during the year for:
Interest	$	134			$	184
Income taxes	34,123				29,003
Operating lease liabilities	5,076				—
Non-cash operating activities:
ROU assets obtained in exchange for lease liabilities(1)	$	25,965			$	—
Non-cash investing activities:
Unpaid purchases of property, plant and equipment	$	4,170			$	2,023
Non-cash financing activities:
Unsettled common stock proceeds from option exercises	$	—			$	259
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	513,360			$	493,488
Restricted cash	152				157
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	513,512			$	493,645

______________

⁽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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