Property, Plant and Equipment

9 Months Ended

Sep. 27, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 11–Property, Plant and Equipment

Property, plant and equipment, net consisted of the following:

	September 27, 2019			December 28, 2018
	(in millions)
Computers and other equipment	$	248		$	233
Leasehold improvements	187			206
Office furniture and fixtures	34			36
Buildings and improvements	23			56
Land	4			40
Construction in progress	58			15
	554			586
Less: accumulated depreciation	(326		)	(349		)
	$	228		$	237

Depreciation expense was $16 million and $45 million for the quarter and nine months ended September 27, 2019, respectively, and $14 million and $42 million for the quarter and nine months ended September 28, 2018, respectively.

Sale and Leaseback Agreements

Gaithersburg, MD Property

On December 31, 2018, the Company closed the sale and leaseback agreement relating to its land and building in Gaithersburg, MD. The Company received proceeds of $31 million, net of selling costs for the property, which had a carrying value of $31 million. The term of the lease is expected to end during fiscal 2020.

During the quarter ended March 30, 2018, an impairment charge of $7 million associated with this property was recorded within Corporate.

San Diego, CA Properties

On December 28, 2018, the Company closed the sale and leaseback agreement relating to two buildings and the adjacent land in San Diego, CA for consideration of $79 million, net of selling costs. The carrying value of the land and buildings was $14 million. The Company received cash proceeds of $14 million upon closing in December 2018, and received the remaining $65 million cash proceeds in January 2019. The term of the lease is expected to end during fiscal 2036.

Prior to the adoption of ASC 842, the consideration of $79 million was recorded as a financing transaction. Under ASC 842, the transaction qualified as a sale-leaseback and consequently the debt of $79 million and the carrying value of the property of $14 million, net of the related tax impact of $17 million, were reclassified into retained earnings as a cumulative effect adjustment. The proceeds received in fiscal 2019 were recorded as investing activities on the condensed consolidated statements of cash flows.