LEASES (Tables)

9 Months Ended

Jun. 27, 2020

Lease expense and components of lease expense

The following table shows the components of lease expense:



	Three months ended			Nine months ended
(in thousands)	June 27, 2020			June 27, 2020
Operating lease expense ⁽¹⁾	$	(1,646	)	$	(5,030	)

(1)

Operating lease expense includes short-term lease expense, which is immaterial for the three and nine months ended June 27, 2020.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating and finance lease liabilities, and, as such, are excluded from the amounts below:



	Nine months ended
(in thousands)	June 27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	4,677

Weighted-average lease terms and discount rates

The following table shows the weighted-average lease terms and discount rates for operating leases:



	As of
	June 27, 2020
Operating leases:
Weighted-average remaining lease term (in years):	4.7
Weighted-average discount rate:	4.6	%

Future lease payments after ASC 842 adoption

Future lease payments, excluding short-term leases, as of June 27, 2020, are detailed as follows:



(in thousands)	Operating leases
Remainder of 2020	$	1,658
2021	6,288
2022	5,635
2023	5,420
2024	2,985
Thereafter	4,385
Total minimum lease payments	26,371
Less: Interest	2,776
Present value of lease obligations	23,595
Less: Current portion	5,471
Long-term portion of lease obligations	$	18,124

Future lease payments before ASC 842 adoption

Future lease payments under operating leases prior to adoption ASC 842 were as follows:



			Payments due by fiscal year
(in thousands)	Total		2020		2021		2022		2023		2024		Thereafter
Operating lease obligations ⁽¹⁾	$	16,273	$	4,089	$	2,576	$	2,182	$	1,967	$	1,822	$	3,637

(1)

Pursuant to ASC No. 840, Leases ("ASC 840"), for lessee's involvement in asset construction, the Company was considered to be the owner of the Building (as defined in Note 9 below) during the construction phase due to its involvement in the asset construction. As a result of the Company's continued involvement during the lease term, the Company did not fulfill the criteria to apply sale-leaseback accounting under ASC 840. Therefore, at completion of construction, the Building remained on the Consolidated Condensed Balance Sheet, and the corresponding financing obligation was reclassified to long-term liability. As of September 28, 2019, we recorded a financing obligation related to the Building of $15.0 million (see Note 9 below). The financing obligation is not reflected in the table above.