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Leases | 3 Months Ended
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Apr. 02, 2023
Leases [Abstract] |
Leases | LeasesWe have operating and finance leases for properties, including manufacturing facilities, warehouses, and office space; as well as vehicles and equipment. We make certain judgments in determining whether a contract contains a lease in accordance with ASU 2016-02. Our leases have remaining lease terms within 1 to 15 years; some of which include extension and termination options. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably certain as of the commencement date of the lease. We have a few short-term operating leases with terms less than twelve months - these leases are not recorded on our balance sheet and the overall rent expense is not material. We also have certain lease contracts that contain both lease and non-lease components. We have elected the practical expedient to account for these components together as a single, combined lease component. T he rate implicit in most of our leases is not readily determinable. As a result, we utilize the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset. Our lease agreements do not contain material residual value gu arantees. Our variable lease expense was approximately $0.8 million for each the three months ended April 2, 2023 and April 3, 2022. The components of lease expense were as follows:
|  | Three Months Ended |  |
|  | April 2, 2023 |  | April 3, 2022 |  |  |  |
|  | (In thousands)
Operating lease cost |  | $ | 5,517 |  |  | $ | 5,428 |  |  |  |  |
Finance lease cost |  |  |  |  |  |  |  |
Amortization of right-of-use asset |  | $ | 201 |  |  | $ | 288 |  |  |  |  |
Interest on lease liabilities |  | 80 |  |  | 6 |  |  |  |  |
Total finance lease cost |  | $ | 281 |  |  | $ | 294 |  |  |  |  |
Supplemental cash flow information related to leases was as follows:
|  | Three Months Ended |  |
|  | April 2, 2023 |  | April 3, 2022 |  |  |  |
|  | (In thousands)
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 4,665 |  |  | $ | 4,776 |  |  |  |  |
Operating cash flows from finance leases were not material during the three months ended April 2, 2023 and April 3, 2022. Supplemental balance sheet information related to leases was as follows:
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands, except lease term and discount rate)
Operating leases: |  |  |  |
Total operating lease right-of-use assets |  | $ | 74,451 |  |  | $ | 73,376 |
Accrued liabilities |  | $ | 16,725 |  |  | $ | 16,442 |
Long-term operating lease liabilities |  | 61,400 |  |  | 59,250 |
Total operating lease liabilities |  | $ | 78,125 |  |  | $ | 75,692 |
Finance leases: |  |  |  |
Other long-lived assets, at cost |  | $ | 6,340 |  |  | $ | 6,323 |
Accumulated depreciation |  | (891) |  |  | (733) |
Other long-lived assets, net |  | $ | 5,449 |  |  | $ | 5,590 |
Accrued liabilities |  | $ | 487 |  |  | $ | 391 |
Other long-term liabilities |  | 5,867 |  |  | 5,928 |
Total finance lease liabilities |  | $ | 6,354 |  |  | $ | 6,319 |
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands, except lease term and discount rate)
Weighted Average Remaining Lease Term |  |  |  |
Operating leases |  | 6 years |  | 6 years
Finance leases |  | 10 years |  | 10 years
Weighted Average Discount Rate |  |  |  |
Operating leases |  | 5.2 | % |  | 5.2 | %
Finance leases |  | 4.2 | % |  | 4.2 | %
The following table summarizes maturities of lease liabilities as of April 2, 2023 and December 31, 2022, respectively:
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands)
2023 |  | $ | 13,153 |  |  | $ | 15,815 |
2024 |  | 15,343 |  |  | 14,809 |
2025 |  | 14,010 |  |  | 13,472 |
2026 |  | 12,495 |  |  | 11,964 |
2027 |  | 6,664 |  |  | 6,464 |
Thereafter |  | 21,094 |  |  | 20,907 |
Total |  | $ | 82,759 |  |  | $ | 83,431 |
In addition, we are party to two lease guarantees. Belden covenanted the lease payments for two Grass Valley property leases which will expire in 2029 and 2035, and collectively have approximately $19 million of fixed lease payments remaining. These lease guarantees were retained by Belden and not transferred to the buyer of Grass Valley. During 2022, Grass Valley defaulted on both property leases. As of April 2, 2023, we have a liability for expected, future payments of $8.8 million. The liability is based on certain assumptions, such as receiving a level of sublease income, that we will reassess on an ongoing basis. We will update the estimated liability balance for changes in assumptions as needed.
Leases | LeasesWe have operating and finance leases for properties, including manufacturing facilities, warehouses, and office space; as well as vehicles and equipment. We make certain judgments in determining whether a contract contains a lease in accordance with ASU 2016-02. Our leases have remaining lease terms within 1 to 15 years; some of which include extension and termination options. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably certain as of the commencement date of the lease. We have a few short-term operating leases with terms less than twelve months - these leases are not recorded on our balance sheet and the overall rent expense is not material. We also have certain lease contracts that contain both lease and non-lease components. We have elected the practical expedient to account for these components together as a single, combined lease component. T he rate implicit in most of our leases is not readily determinable. As a result, we utilize the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset. Our lease agreements do not contain material residual value gu arantees. Our variable lease expense was approximately $0.8 million for each the three months ended April 2, 2023 and April 3, 2022. The components of lease expense were as follows:
|  | Three Months Ended |  |
|  | April 2, 2023 |  | April 3, 2022 |  |  |  |
|  | (In thousands)
Operating lease cost |  | $ | 5,517 |  |  | $ | 5,428 |  |  |  |  |
Finance lease cost |  |  |  |  |  |  |  |
Amortization of right-of-use asset |  | $ | 201 |  |  | $ | 288 |  |  |  |  |
Interest on lease liabilities |  | 80 |  |  | 6 |  |  |  |  |
Total finance lease cost |  | $ | 281 |  |  | $ | 294 |  |  |  |  |
Supplemental cash flow information related to leases was as follows:
|  | Three Months Ended |  |
|  | April 2, 2023 |  | April 3, 2022 |  |  |  |
|  | (In thousands)
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 4,665 |  |  | $ | 4,776 |  |  |  |  |
Operating cash flows from finance leases were not material during the three months ended April 2, 2023 and April 3, 2022. Supplemental balance sheet information related to leases was as follows:
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands, except lease term and discount rate)
Operating leases: |  |  |  |
Total operating lease right-of-use assets |  | $ | 74,451 |  |  | $ | 73,376 |
Accrued liabilities |  | $ | 16,725 |  |  | $ | 16,442 |
Long-term operating lease liabilities |  | 61,400 |  |  | 59,250 |
Total operating lease liabilities |  | $ | 78,125 |  |  | $ | 75,692 |
Finance leases: |  |  |  |
Other long-lived assets, at cost |  | $ | 6,340 |  |  | $ | 6,323 |
Accumulated depreciation |  | (891) |  |  | (733) |
Other long-lived assets, net |  | $ | 5,449 |  |  | $ | 5,590 |
Accrued liabilities |  | $ | 487 |  |  | $ | 391 |
Other long-term liabilities |  | 5,867 |  |  | 5,928 |
Total finance lease liabilities |  | $ | 6,354 |  |  | $ | 6,319 |
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands, except lease term and discount rate)
Weighted Average Remaining Lease Term |  |  |  |
Operating leases |  | 6 years |  | 6 years
Finance leases |  | 10 years |  | 10 years
Weighted Average Discount Rate |  |  |  |
Operating leases |  | 5.2 | % |  | 5.2 | %
Finance leases |  | 4.2 | % |  | 4.2 | %
The following table summarizes maturities of lease liabilities as of April 2, 2023 and December 31, 2022, respectively:
|  | April 2, 2023 |  | December 31, 2022
|  | (In thousands)
2023 |  | $ | 13,153 |  |  | $ | 15,815 |
2024 |  | 15,343 |  |  | 14,809 |
2025 |  | 14,010 |  |  | 13,472 |
2026 |  | 12,495 |  |  | 11,964 |
2027 |  | 6,664 |  |  | 6,464 |
Thereafter |  | 21,094 |  |  | 20,907 |
Total |  | $ | 82,759 |  |  | $ | 83,431 |
In addition, we are party to two lease guarantees. Belden covenanted the lease payments for two Grass Valley property leases which will expire in 2029 and 2035, and collectively have approximately $19 million of fixed lease payments remaining. These lease guarantees were retained by Belden and not transferred to the buyer of Grass Valley. During 2022, Grass Valley defaulted on both property leases. As of April 2, 2023, we have a liability for expected, future payments of $8.8 million. The liability is based on certain assumptions, such as receiving a level of sublease income, that we will reassess on an ongoing basis. We will update the estimated liability balance for changes in assumptions as needed.

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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 https://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 https://asc.fasb.org/subtopic&trid=77888251 + Details
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