Leases

9 Months Ended

Oct. 01, 2021

11. Leases

Most leases held by the Company expire between 2021 and 2034. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years, and options to terminate the leases within one year. The exercise of lease renewal or termination options is at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable lives of the right-of-use assets and leasehold improvements are limited to the expected lease terms.

The following table summarizes the components of lease costs (in thousands):

	Three Months Ended				Nine Months Ended
	October 1,		October 2,		October 1,		October 2,
	2021		2020		2021		2020
Operating lease cost	$	2,418	$	1,786	$	6,213	$	5,693
Finance lease cost
Amortization of right-of-use assets		149		253		451		748
Interest on lease liabilities		85		108		257		326
Variable lease cost		275		320		834		1,043
Total lease cost	$	2,927	$	2,467	$	7,755	$	7,810

The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate):

	October 1,			December 31,
	2021			2020
Operating leases
Operating lease right-of-use assets	$	43,459		$	34,444

Current portion of operating lease liabilities	$	7,575		$	6,188
Operating lease liabilities		40,850			32,802
Total operating lease liabilities	$	48,425		$	38,990

Finance leases
Property, plant and equipment, gross	$	9,582		$	19,819
Accumulated depreciation		(4,918	)		(4,934	)
Finance lease assets included in property, plant and equipment, net	$	4,664		$	14,885

Accrued expenses and other current liabilities	$	590		$	9,720
Other liabilities		5,461			5,908
Total finance lease liabilities	$	6,051		$	15,628

Weighted-average remaining lease term (in years):
Operating leases		8.4			9.3
Finance leases		7.8			3.5
Weighted-average discount rate:
Operating leases		4.96%			5.50	%
Finance leases	5.54%				3.00	%

The following table provides additional details of cash flow information related to the Company’s leases (in thousands):

	Nine Months Ended
	October 1,		October 2,
	2021		2020
Cash paid for amounts included in lease liabilities:
Operating cash flows from finance leases	$	257	$	357
Operating cash flows from operating leases	$	5,562	$	5,088
Financing cash flows from finance leases	$	9,166	$	1,034
Supplemental non-cash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	15,340	$	3,050

During the nine months ended October 1, 2021, the Company paid $8.7 million upon the exercise of an option to purchase a building under a finance lease agreement in Germany. The cash payment is presented as a cash outflow from financing activities in the consolidated statement of cash flows.

Future minimum lease payments under operating and finance leases expiring subsequent to October 1, 2021, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):

Year Ending December 31,	Operating Leases			Finance Leases
2021 (remainder of year)	$	2,141		$	227
2022		9,539			907
2023		8,241			930
2024		7,230			954
2025		6,967			954
Thereafter		27,090			3,486
Total minimum lease payments		61,208			7,458
Less: Interest		(12,783	)		(1,407	)
Present value of lease liabilities	$	48,425		$	6,051