Leases

3 Months Ended

Jan. 02, 2021

Leases [Abstract]

LEASES

LEASES

We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either a finance or operating lease. We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2032. These operating leases are mainly for administrative offices, research-and-development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We assume renewals in our determination of the lease term when the renewals are deemed to be reasonably assured at lease commencement. We have also entered into various finance leases to obtain servers and certain other equipment for our operations. These arrangements are typically for three to six years. Our assets, liabilities and lease costs related to finance leases are immaterial.

As the rates implicit in our leases are not readily determinable, we use incremental borrowing rates based on the information available at the commencement date in determining the present value of future lease payments. We consider both the credit rating and the length of the lease when calculating the incremental borrowing rate. We combine lease and non-lease components into a single lease component for both our operating and finance leases.

For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred.

We generally recognize sublease income on a straight-line basis over the sublease term.

The components of operating lease costs (in thousands), lease term (in years) and discount rate are as follows:

	Three Months Ended
	January 2, 2021		December 28, 2019
Operating lease cost	$	5,344	$	5,023
Variable lease cost	329		376
Short-term lease cost	11		130
Sublease income	(2)		(32)
Total lease cost	$	5,682	$	5,497

	January 2, 2021		December 28, 2019
Weighted average remaining lease term	7.6		8.3
Weighted average discount rate	4.9	%	4.8	%

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

	Three Months Ended
	January 2, 2021		December 28, 2019
Operating cash outflows from operating leases	$	5,023	$	4,887
ROU assets obtained in exchange for new operating lease liabilities	853		1,996

See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases.

As of January 2, 2021, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands):

	Operating Leases
2021 (remainder)	$	15,257
2022	18,673
2023	16,124
2024	12,456
2025	11,143
2026 and thereafter	37,219
Total minimum lease payments	110,872
Amounts representing interest	(20,746)
Present value of total lease liabilities	$	90,126

LEASES

LEASES

We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either a finance or operating lease. We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2032. These operating leases are mainly for administrative offices, research-and-development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We assume renewals in our determination of the lease term when the renewals are deemed to be reasonably assured at lease commencement. We have also entered into various finance leases to obtain servers and certain other equipment for our operations. These arrangements are typically for three to six years. Our assets, liabilities and lease costs related to finance leases are immaterial.

As the rates implicit in our leases are not readily determinable, we use incremental borrowing rates based on the information available at the commencement date in determining the present value of future lease payments. We consider both the credit rating and the length of the lease when calculating the incremental borrowing rate. We combine lease and non-lease components into a single lease component for both our operating and finance leases.

For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred.

We generally recognize sublease income on a straight-line basis over the sublease term.

The components of operating lease costs (in thousands), lease term (in years) and discount rate are as follows:

	Three Months Ended
	January 2, 2021		December 28, 2019
Operating lease cost	$	5,344	$	5,023
Variable lease cost	329		376
Short-term lease cost	11		130
Sublease income	(2)		(32)
Total lease cost	$	5,682	$	5,497

	January 2, 2021		December 28, 2019
Weighted average remaining lease term	7.6		8.3
Weighted average discount rate	4.9	%	4.8	%

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

	Three Months Ended
	January 2, 2021		December 28, 2019
Operating cash outflows from operating leases	$	5,023	$	4,887
ROU assets obtained in exchange for new operating lease liabilities	853		1,996

See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases.

As of January 2, 2021, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands):

	Operating Leases
2021 (remainder)	$	15,257
2022	18,673
2023	16,124
2024	12,456
2025	11,143
2026 and thereafter	37,219
Total minimum lease payments	110,872
Amounts representing interest	(20,746)
Present value of total lease liabilities	$	90,126