Leases

3 Months Ended

Jan. 01, 2023

Leases [Abstract]

Leases

Leases

Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to ten years, some of which may include options to extend the leases for up to five years.

We determine if an arrangement is a lease at inception. Operating leases are included in "Right-of-use assets, operating leases", "Short-term lease liabilities, operating leases" and "Long-term lease liabilities, operating leases" in the consolidated balance sheets. Our finance leases are primarily for certain information technology equipment, and are included in "Other non-current assets", "Other current liabilities" and "Other non-current liabilities" in the consolidated balance sheets at January 1, 2023 and October 2, 2022.

Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

The components of lease costs are as follows (in thousands):

	Three Months Ended
	January 1, 2023		January 2, 2022
Operating lease cost	$	20,961	$	21,751
Sublease income	(32)		(125)
Total lease cost	$	20,929	$	21,626

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended
	January 1, 2023		January 2, 2022
Operating cash flows for operating leases	$	16,493	$	17,519
Financing cash flows for finance leases	1,316		945
Right-of-use assets obtained in exchange for new operating lease liabilities	11,117		12,347
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,431	$	1,349

Supplemental balance sheet and other information related to leases are as follows (in thousands):

	Balance at
	January 1, 2023			October 2, 2022
Operating leases:
Right-of-use assets	$	182,500		$	182,319
Lease liabilities:
Current	55,809			57,865
Non-current	148,034			146,285
Total operating lease liabilities	$	203,843		$	204,150
Finance leases:
Other non-current assets	$	9,932		$	9,564
Other current liabilities	$	4,582		$	4,481
Other non-current liabilities	$	5,343		$	4,745
Weighted-average remaining lease term:
Operating leases	5 years			5 years
Finance leases	2 years			2 years
Weighted-average discount rate:
Operating leases	2.2		%	2.2		%
Finance leases	3		%	3		%

At January 1, 2023, we have approximately $8 million of operating leases that have not yet commenced.

A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at January 1, 2023 is as follows (in thousands):

	Operating Leases		Finance Leases
2023 (remaining)	$	49,216	$	3,787
2024	51,833		3,699
2025	39,744		2,182
2026	25,234		574
2027	17,870		211
Beyond	32,484		—
Total lease payments	216,381		10,453
Less: imputed interest	(12,538)		(521)
Total present value of lease liabilities	$	203,843	$	9,932

Leases

Leases

Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to ten years, some of which may include options to extend the leases for up to five years.

We determine if an arrangement is a lease at inception. Operating leases are included in "Right-of-use assets, operating leases", "Short-term lease liabilities, operating leases" and "Long-term lease liabilities, operating leases" in the consolidated balance sheets. Our finance leases are primarily for certain information technology equipment, and are included in "Other non-current assets", "Other current liabilities" and "Other non-current liabilities" in the consolidated balance sheets at January 1, 2023 and October 2, 2022.

Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

The components of lease costs are as follows (in thousands):

	Three Months Ended
	January 1, 2023		January 2, 2022
Operating lease cost	$	20,961	$	21,751
Sublease income	(32)		(125)
Total lease cost	$	20,929	$	21,626

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended
	January 1, 2023		January 2, 2022
Operating cash flows for operating leases	$	16,493	$	17,519
Financing cash flows for finance leases	1,316		945
Right-of-use assets obtained in exchange for new operating lease liabilities	11,117		12,347
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,431	$	1,349

Supplemental balance sheet and other information related to leases are as follows (in thousands):

	Balance at
	January 1, 2023			October 2, 2022
Operating leases:
Right-of-use assets	$	182,500		$	182,319
Lease liabilities:
Current	55,809			57,865
Non-current	148,034			146,285
Total operating lease liabilities	$	203,843		$	204,150
Finance leases:
Other non-current assets	$	9,932		$	9,564
Other current liabilities	$	4,582		$	4,481
Other non-current liabilities	$	5,343		$	4,745
Weighted-average remaining lease term:
Operating leases	5 years			5 years
Finance leases	2 years			2 years
Weighted-average discount rate:
Operating leases	2.2		%	2.2		%
Finance leases	3		%	3		%

At January 1, 2023, we have approximately $8 million of operating leases that have not yet commenced.

A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at January 1, 2023 is as follows (in thousands):

	Operating Leases		Finance Leases
2023 (remaining)	$	49,216	$	3,787
2024	51,833		3,699
2025	39,744		2,182
2026	25,234		574
2027	17,870		211
Beyond	32,484		—
Total lease payments	216,381		10,453
Less: imputed interest	(12,538)		(521)
Total present value of lease liabilities	$	203,843	$	9,932