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Operating Leases | 6 Months Ended
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Jun. 29, 2019
Operating Leases [Abstract] |
Operating Leases | NOTE B – OPERATING LEASES With the exception of the Company’s headquarters in Salt Lake City, Utah, and its facilities in New South Wales, Australia, and in Beijing, China, and Tianjin, China, the Company generally leases its facilities. Each of the facility lease agreements is a non-cancelable operating lease generally structured with renewal options and expires prior to or during 2026. In connection with the production facilities in Beijing and Tianjin, China, the Company has prepaid land use rights that are considered when applying the lease definition under the guidance for lease accounting. The Company utilizes equipment under non-cancelable operating leases, expiring through 2022. At contract inception, the Company determines whether an arrangement is or contains a lease and whether the lease should be classified as an operating or a financing lease. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. ROU assets for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments. ‎ NOTE B – OPERATING LEASES – CONTINUED Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding 12 months. Minimum lease payments include only the fixed lease component of the agreement, as well as any variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Non-lease components are accounted for separately from the fixed lease component for all leases. Most of the Company’s leases do not provide an implicit rate that can readily be determined. Therefore, the applied discount rate is based on the Company’s incremental borrowing rate, which is determined using its credit rating and other information available as of the commencement date and is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Lease terms may include options to renew when it is reasonably certain that the Company will exercise that option. The ROU asset is measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and selling, general and administrative expense in the Company’s consolidated statements of comprehensive income. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases is recognized on a straight-line basis over the lease term. The Company monitors for events or changes in circumstances that require a reassessment of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the ROU asset unless doing so would reduce the ROU asset to an amount less than zero, in which case the remaining adjustment would be recorded in the consolidated statements of comprehensive income. The following table summarizes the classification of lease assets and lease liabilities in the Company’s consolidated balance sheet:
|  |  |  | As of
Leases |  | Classification |  | June 29, 2019
Assets |  |  |  |  |
ROU operating lease assets, net |  | Other assets |  | $ | 25,325
Total ROU assets |  |  |  | $ | 25,325
Liabilities |  |  |  |  |
Current: |  |  |  |  |
Operating lease liabilities |  | Other current liabilities |  | $ | 6,782
Non-current: |  |  |  |  |
Operating lease liabilities |  | Other long-term liabilities |  | $ | 12,650
Total lease liabilities |  |  |  | $ | 19,432
‎ NOTE B – OPERATING LEASES – CONTINUED The following table presents supplemental lease information:
|  | Quarter Ended |  | Six Months Ended
|  | June 29, |  | June 29,
|  | 2019 |  | 2019
Lease cost |  |  |  |  |  |
Operating lease cost |  | $ | 2,328 |  | $ | 4,494
Total lease cost |  | $ | 2,328 |  | $ | 4,494
|  |  |  |  | Six Months Ended
|  |  |  |  | June 29,
|  |  |  |  | 2019
Other information |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  |  | $ | 4,215
ROU assets obtained in exchange for new operating lease liabilities |  |  |  |  | $ | 3,305
Weighted-average remaining lease term—operating leases |  |  |  |  |  | 4.00 yrs.
Weighted-average discount rate—operating leases |  |  |  |  |  | 3.73%
The following table presents the maturity of the Company’s lease liabilities as of June 29, 2019.
Year ending |  |  |  |  |
Remainder of 2019 |  |  |  | $ | 3,953
2020 |  |  |  |  | 6,661
2021 |  |  |  |  | 4,204
2022 |  |  |  |  | 1,836
2023 |  |  |  |  | 1,584
Thereafter |  |  |  |  | 2,618
|  |  |  | $ | 20,856
Less: imputed interest |  |  |  | $ | (1,424)
Present value |  |  |  | $ | 19,432
The future minimum commitments under operating leases at December 29, 2018 having a non-cancelable term in excess of one year as determined prior to the adoption of Topic 842 are as follows:
Year ending |  |
2019 | $ | 9,155
2020 |  | 6,146
2021 |  | 3,825
2022 |  | 1,962
2023 |  | 1,464
Thereafter |  | 2,514
| $ | 25,066
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- Definition Tabular disclosure for lessee's operating leases. Includes, but is not limited to, description of lessee's operating lease, existence and terms of renewal or purchase options and escalation clauses, restrictions imposed by lease, such as those concerning dividends, additional debt, and further leasing, rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 55 -Paragraph 40 -Subparagraph (Note 1,3) -URI http://asc.fasb.org/extlink&oid=82846649&loc=d3e38371-112697 Reference 2: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=77902758&loc=d3e41499-112717 Reference 3: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=118943654&loc=d3e12069-110248 Reference 4: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=77902758&loc=d3e41502-112717 Reference 5: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=84164451&loc=d3e36991-112694 + Details
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