Lessee ROU Assets and Lease Liabilities

9 Months Ended

Sep. 26, 2020

Lessee, ROU Assets and Lease Liabilities

11. Lessee ROU Assets and Lease Liabilities

The Company leases certain facilities in North and South America, Europe, the Middle East and Asia-Pacific regions under operating lease agreements expiring at various dates through January 2030. In addition, the Company leases equipment in the U.S. and Europe that are classified as operating leases and expire at various dates through December 2023. The majority of these leases are non-cancellable and generally do not contain any material restrictive covenants, material residual value guarantees or other material guarantees. The Company recognizes lease costs under these agreements using a straight-line method based on total lease payments. Certain facility leases contain predetermined price escalations and in some cases renewal options, the longest of which is for five years.

The Company generally estimates the applicable discount rate used to determine the net present value of lease payments based on available information at the lease commencement date. As of September 26, 2020, the weighted-average discount rate used by the Company for all operating leases was approximately 2.7%.

The balance sheet classifications for amounts related to the Company’s operating leases for which it is the lessee are as follows (in thousands):


	Balance sheet classification	September 26, 2020		December 28, 2019
Lessee ROU assets	Other non-current assets	$	26,825	$	19,137

Lessee current lease liabilities	Other current liabilities	4,957		4,653
Lessee non-current lease liabilities	Other non-current liabilities	23,600		15,834
Total operating lease liabilities		$	28,557	$	20,487

The weighted-average remaining lease term for the Company’s operating leases was 7.7 years as of September 26, 2020.

As of September 26, 2020, estimated future operating lease payments for each of the following fiscal years were as follows (in thousands):


Fiscal year	Amount
2020 (balance of year)	$	1,372
2021	5,532
2022	4,417
2023	4,132
2024	3,175
Thereafter⁽¹⁾	13,158
Total	31,786
Imputed interest	(3,229)
Present value	$	28,557

______________

⁽¹⁾ Includes optional renewal period for certain leases.

Lease costs consist of the following (in thousands):


	Three Months Ended						Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019

Operating lease costs	$	1,776	$	1,717	$	5,188	$	5,170
Short-term lease costs	—		—		1		12
Sublease income	—		(52)		—		(156)
Total lease costs	$	1,776	$	1,665	$	5,189	$	5,026