XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.19.2

Leases | 6 Months Ended
--- | ---
Jun. 29, 2019
Leases [Abstract] |
Leases |
4. | Leases
Adoption of Lease Standard On December 30, 2018, the Company adopted the updated guidance on leases using the modified retrospective transition method. Results for reporting periods beginning on or after December 30, 2018 are presented under the updated guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical lease accounting. The adoption of the standard had a material impact on the Company’s consolidated balance sheets but did not have a material impact on its consolidated statements of net income. The Company recorded $155,178 as a right of use asset, $163,486 of lease liabilities and $0 for retained earnings for operating leases upon adoption of the updated guidance. The previously reported amounts have been revised by $3,595 due to the impact of prepaid rent. The standard did not have a material impact on the Company’s finance lease contracts. A lease is defined as an arrangement that contractually specifies the right to use and control an identified asset for a specific period of time in exchange for consideration. Operating leases are included in operating lease assets, portion of operating lease liabilities due within one year, and long-term operating lease liabilities in the Company’s 2019 consolidated balance sheet. Finance leases are included in property and equipment, net, other accrued liabilities, and other long-term liabilities in the Company’s 2019 consolidated balance sheet. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term. The lease asset includes scheduled lease payments and excludes lease incentives, such as free rent periods and tenant improvement allowances. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise such option, the Company will include the renewal option terms in determining the lease asset and lease liability. The Company does not have any renewal options that would have a material impact on the terms of the leases and that are also reasonably expected to be exercised at this time. A lease may contain both fixed and variable payments. Variable lease payments that are linked to an index or rate are measured based on the current index or rate at adoption of the updated guidance, or lease commencement date for new leases, with the impact of future changes in the index or rate being recorded as a period expense. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s operating and finance leases are primarily for its studios, corporate offices, data centers and certain equipment, including automobiles. At June 29, 2019, the Company’s lease assets and lease liabilities were as follows:
|  | June 29, 2019 |
Assets: |  |  |  |
Operating lease assets |  | $ | 144,913 |
Finance lease assets |  |  | 522 |
Total leased assets |  | $ | 145,435 |
Liabilities: |  |  |  |
Current |  |  |  |
Operating |  | $ | 32,003 |
Finance |  |  | 287 |
Noncurrent |  |  |  |
Operating |  | $ | 121,318 |
Finance |  |  | 152 |
Total lease liabilities |  | $ | 153,760 |
For the three and six months ended June 29, 2019, the components of the Company’s lease expense were as follows:
|  | Three Months Ended |  | Six Months Ended |
|  | June 29, |  | June 29, |
|  | 2019 |  | 2019 |
Operating lease cost |  | $ | 12,363 |  | $ | 25,735 |
Finance lease cost: |  |  |  |  |  |  |
Amortization of leased assets |  |  | 138 |  |  | 218 |
Interest on lease liabilities |  |  | 5 |  |  | 13 |
Total finance lease cost |  | $ | 143 |  | $ | 231 |
Total lease cost |  | $ | 12,506 |  | $ | 25,966 |
At June 29, 2019, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:
|  | June 29, 2019 |
Weighted Average Remaining Lease Term (years) |  |  |  |
Operating leases |  |  | 7.22 |
Finance leases |  |  | 1.66 |
Weighted Average Discount Rate |  |  |  |
Operating leases |  |  | 7.04 |
Finance leases |  |  | 4.33 |
The Company’s leases have remaining lease terms of 0 to 13 years with a weighted average lease term of 7.21 years. At June 29, 2019, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:
| Operating Leases |  |  | Finance Leases |  |  | Total |
Remainder of fiscal 2019 | $ | 20,478 |  |  | $ | 286 |  |  | $ | 20,764 |
2020 |  | 39,951 |  |  |  | 135 |  |  |  | 40,086 |
2021 |  | 31,371 |  |  |  | 49 |  |  |  | 31,420 |
2022 |  | 21,254 |  |  |  | 20 |  |  |  | 21,274 |
2023 |  | 15,512 |  |  |  | 21 |  |  |  | 15,533 |
Thereafter |  | 74,253 |  |  |  | 4 |  |  |  | 74,257 |
Total lease payments | $ | 202,819 |  |  | $ | 515 |  |  | $ | 203,334 |
Less imputed interest |  | 49,498 |  |  |  | 76 |  |  |  | 49,574 |
Present value of lease liabilities | $ | 153,321 |  |  | $ | 439 |  |  | $ | 153,760 |
Minimum commitments under non-cancelable obligations, primarily for office and rental facilities operating leases at December 29, 2018, consisted of the following:
2019 |  | $ | 63,261 |
2020 |  |  | 38,491 |
2021 |  |  | 22,341 |
2022 |  |  | 14,017 |
2023 |  |  | 9,192 |
2024 and thereafter |  |  | 37,704 |
Total |  | $ | 185,006 |
Total rent expense charged to operations for office and rental facilities under these operating leases for the three and six months ended June 30, 2018 was $10,741 and $21,532, respectively. Supplemental cash flow information related to leases for the six months ended June 29, 2019 were as follows:
|  | Six Months Ended |
|  | June 29, |
|  | 2019 |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 25,738 |
Operating cash flows from finance leases |  | $ | 13 |
Financing cash flows from finance leases |  | $ | 218 |
Leased assets obtained in exchange for new operating lease liabilities |  | $ | 12,084 |
Leased assets obtained in exchange for new finance lease liabilities |  | $ | 92 |
Practical Expedients and Accounting Policy Elections The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company not to reassess whether any expired or existing contracts contained leases, to carry forward existing lease classifications and not to reassess initial direct costs for existing leases. In addition, the Company elected the benefit of hindsight practical expedient in determining the lease term for existing leases upon adoption of the updated guidance. The Company has lease agreements with lease and non-lease components and has elected the practical expedient not to separate non-lease components from lease components and instead to account for each separate lease component and non-lease component as a single lease component. The Company has elected the short-term lease exception accounting policy, whereby the recognition requirements of the updated guidance is not applied and lease expense is recorded on a straight-line basis with respect to leases with an initial term of 12 months or less.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
Name: | us-gaap_LeasesOfLesseeDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration