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Leases | 9 Months Ended
--- | ---
Sep. 29, 2019
Leases [Abstract] |
Leases | LEASES General On December 31, 2018, the Company adopted the new lease standard using the transition methodology allowed by the standard to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative prior year periods presented in these financial statements continue to be in accordance with previous GAAP. We have operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. Our leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease terms may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We record a right-of-use asset and lease liability for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region. As of September 29, 2019, there were no significant right-of-use assets and lease obligations from leases that had not commenced as of the end of the third quarter. The table below represents a summary of the balances recorded in the consolidated condensed balance sheet related to our leases as of September 29, 2019:
|  | September 29, 2019
|  | (In thousands)
Balance Sheet Location |  | Operating Leases |  | Finance Leases
Operating lease right-of-use assets |  | $ | 110,051 |  |  |
Current portion of operating lease liabilities |  | $ | 15,780 |  |  |
Operating lease liabilities |  | 91,480 |  |  |
Total operating lease liabilities |  | $ | 107,260 |  |  |
Property and equipment |  |  |  | $ | 3,951 |
Accrued expenses |  |  |  | $ | 1,150 |
Other long-term liabilities |  |  |  | 972 |
Total finance lease liabilities |  |  |  | $ | 2,122 |
Lease Costs
| Three Months Ended |  | Nine Months Ended
| September 29, 2019 |  | September 29, 2019
Lease cost | (In thousands)
Finance lease cost: |  |  |
Amortization of right-of-use assets | $ | 112 |  |  | $ | 536 |
Interest on lease liabilities | 12 |  |  | 31 |
Operating lease cost | 6,023 |  |  | 17,624 |
Short-term lease cost | 363 |  |  | 1,509 |
Variable lease cost | 561 |  |  | 1,319 |
Total lease cost | $ | 7,071 |  |  | $ | 21,019 |
Other supplemental information |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 12 |  |  | $ | 31 |
Operating cash flows from operating leases | 5,653 |  |  | 16,158 |
Financing cash flows from finance leases | 291 |  |  | 808 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 252 |  |  | 803 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,437 |  |  | 7,973 |
| September 29, 2019
Weighted-average remaining lease term – finance leases (in years) | 2.25 |
Weighted-average remaining lease term – operating leases (in years) | 10.75 |
Weighted-average discount rate – finance leases | 2.25 | %
Weighted-average discount rate – operating leases | 5.85 | %
Maturity Analysis Maturity analysis of lease payments under non-cancellable leases were as follows:
Fiscal Year | Operating Leases |  | Finance Leases
| (In thousands)
2019 (excluding the nine months ended September 29, 2019) | $ | 5,690 |  |  | $ | 304 |
2020 | 20,432 |  |  | 1,141 |
2021 | 16,257 |  |  | 469 |
2022 | 13,007 |  |  | 174 |
2023 | 10,924 |  |  | 84 |
Thereafter | 83,263 |  |  | 14 |
Total future minimum lease payments (undiscounted) | 149,573 |  |  | 2,186 |
Less: Present value discount | (42,313 | ) |  | (64 | )
Total lease liability | $ | 107,260 |  |  | $ | 2,122 |
At December 30, 2018, aggregate minimum rent commitments under operating leases with initial or remaining terms of one year or more consisted of the following:
Fiscal Year |  | Amount
|  | (In thousands)
2019 |  | $ | 26,113 |
2020 |  | 22,066 |
2021 |  | 16,453 |
2022 |  | 8,692 |
2023 |  | 5,186 |
Thereafter |  | 15,237 |
Total minimum rent commitments |  | $ | 93,747 |
Practical Expedients and Policy Elections The Company elected the package of practical expedients permitted under the transition guidance of the new lease standard, which, among other things, allows us to carry forward the historical lease classification and not reassess any initial direct costs for existing leases. In addition, we elected the hindsight practical expedient to determine the lease term, which allows us to use hindsight when considering the impact of options to extend or terminate a lease as well as the option to purchase the underlying asset. We also made an accounting policy election not to separate lease and non-lease components for all asset classes, except for data center assets, and will account for the lease payments as a single component. We made an accounting policy election to exclude leases with an initial term of 12 months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated condensed balance sheet. These leases primarily represent month-to-month operating leases for vehicles and office equipment where we were reasonably certain that we would not elect an option to extend the lease.
Leases | LEASES General On December 31, 2018, the Company adopted the new lease standard using the transition methodology allowed by the standard to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative prior year periods presented in these financial statements continue to be in accordance with previous GAAP. We have operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. Our leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease terms may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We record a right-of-use asset and lease liability for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region. As of September 29, 2019, there were no significant right-of-use assets and lease obligations from leases that had not commenced as of the end of the third quarter. The table below represents a summary of the balances recorded in the consolidated condensed balance sheet related to our leases as of September 29, 2019:
|  | September 29, 2019
|  | (In thousands)
Balance Sheet Location |  | Operating Leases |  | Finance Leases
Operating lease right-of-use assets |  | $ | 110,051 |  |  |
Current portion of operating lease liabilities |  | $ | 15,780 |  |  |
Operating lease liabilities |  | 91,480 |  |  |
Total operating lease liabilities |  | $ | 107,260 |  |  |
Property and equipment |  |  |  | $ | 3,951 |
Accrued expenses |  |  |  | $ | 1,150 |
Other long-term liabilities |  |  |  | 972 |
Total finance lease liabilities |  |  |  | $ | 2,122 |
Lease Costs
| Three Months Ended |  | Nine Months Ended
| September 29, 2019 |  | September 29, 2019
Lease cost | (In thousands)
Finance lease cost: |  |  |
Amortization of right-of-use assets | $ | 112 |  |  | $ | 536 |
Interest on lease liabilities | 12 |  |  | 31 |
Operating lease cost | 6,023 |  |  | 17,624 |
Short-term lease cost | 363 |  |  | 1,509 |
Variable lease cost | 561 |  |  | 1,319 |
Total lease cost | $ | 7,071 |  |  | $ | 21,019 |
Other supplemental information |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 12 |  |  | $ | 31 |
Operating cash flows from operating leases | 5,653 |  |  | 16,158 |
Financing cash flows from finance leases | 291 |  |  | 808 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 252 |  |  | 803 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,437 |  |  | 7,973 |
| September 29, 2019
Weighted-average remaining lease term – finance leases (in years) | 2.25 |
Weighted-average remaining lease term – operating leases (in years) | 10.75 |
Weighted-average discount rate – finance leases | 2.25 | %
Weighted-average discount rate – operating leases | 5.85 | %
Maturity Analysis Maturity analysis of lease payments under non-cancellable leases were as follows:
Fiscal Year | Operating Leases |  | Finance Leases
| (In thousands)
2019 (excluding the nine months ended September 29, 2019) | $ | 5,690 |  |  | $ | 304 |
2020 | 20,432 |  |  | 1,141 |
2021 | 16,257 |  |  | 469 |
2022 | 13,007 |  |  | 174 |
2023 | 10,924 |  |  | 84 |
Thereafter | 83,263 |  |  | 14 |
Total future minimum lease payments (undiscounted) | 149,573 |  |  | 2,186 |
Less: Present value discount | (42,313 | ) |  | (64 | )
Total lease liability | $ | 107,260 |  |  | $ | 2,122 |
At December 30, 2018, aggregate minimum rent commitments under operating leases with initial or remaining terms of one year or more consisted of the following:
Fiscal Year |  | Amount
|  | (In thousands)
2019 |  | $ | 26,113 |
2020 |  | 22,066 |
2021 |  | 16,453 |
2022 |  | 8,692 |
2023 |  | 5,186 |
Thereafter |  | 15,237 |
Total minimum rent commitments |  | $ | 93,747 |
Practical Expedients and Policy Elections The Company elected the package of practical expedients permitted under the transition guidance of the new lease standard, which, among other things, allows us to carry forward the historical lease classification and not reassess any initial direct costs for existing leases. In addition, we elected the hindsight practical expedient to determine the lease term, which allows us to use hindsight when considering the impact of options to extend or terminate a lease as well as the option to purchase the underlying asset. We also made an accounting policy election not to separate lease and non-lease components for all asset classes, except for data center assets, and will account for the lease payments as a single component. We made an accounting policy election to exclude leases with an initial term of 12 months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated condensed balance sheet. These leases primarily represent month-to-month operating leases for vehicles and office equipment where we were reasonably certain that we would not elect an option to extend the lease.

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