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Leases
 9 Months Ended
Jul. 04, 2020
Leases [Abstract]  
Leases Leases
The Company’s lease portfolio includes both real estate and non-real estate type leases which are accounted for as either finance or operating leases. Real estate leases generally include office, warehouse and manufacturing facilities and non-real estate leases generally include office equipment and vehicles. The Company determines if a contract is or contains a lease at inception. The Company’s leases have remaining lease terms of less than 1 year to 40 years. Renewal options that are deemed reasonably certain are included as part of the lease term for purposes of calculating the right-of-use (“ROU”) assets and lease liability. Variable lease payments are generally expensed as incurred and include certain index-based changes in rent, certain nonlease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. The Company elected the practical expedient to not separate lease and nonlease components, as such nonlease components are included in the calculation of the ROU asset and lease liability and included in the lease expense over the term of the lease. The Company uses a discount rate to calculate the ROU asset and lease liability. When the implicit rate is known or provided in the lease documents, the Company is required to use this rate. In cases in which the implicit rate is not known, the Company uses an estimated incremental borrowing rate.

Operating lease ROU assets and lease liabilities are recorded on the date the Company takes possession of the leased assets with expense recognized on a straight-line basis over the lease term. Leases with an estimated total term of 12 months or less are not recorded on the balance sheet and the lease expense is recognized on a straight-line basis over the lease term. Generally, the Company's lease agreements do not contain material residual value guarantees or material restrictive covenants.

Upon adoption of ASU 2016-02, the Company recorded $45.5 million of right-of-use assets and lease liabilities, related to its existing operating lease portfolio. The Company also reclassified amounts previously held on the balance sheet to operating right-of-use assets and operating lease liabilities upon adoption due to existing arrangements subject to the new standard, including $30.2 million of prepaid leases in other non-current assets. The accounting for the Company’s finance leases remained substantially unchanged. In addition, the company recognized a $1.1 million reduction to retained earnings as a result of two existing build-to-suit arrangements for the facilities in Guadalajara, Mexico that were reassessed to be finance leases under the new standard. The adoption of this new standard did not have a material impact on the Condensed Consolidated Statements of Cash Flows or Condensed Consolidated Statements of Comprehensive Income.
As a result of the adoption, the following adjustments were made to the opening balances of the Company's Condensed Consolidated Balance Sheets (in thousands):
September 28, 2019Impacts due to adoption of Topic 842September 29, 2019
ASSETS
   Prepaid expenses and other$31,974  $(170) $31,804  
   Operating right-of-use assets—  75,790  75,790  
   Property, plant and equipment, net384,224  (1,833) 382,391  
   Deferred income taxes13,654  432  14,086  
   Other non-current assets64,714  (30,193) 34,521  
LIABILITIES AND SHAREHOLDERS' EQUITY
   Other accrued liabilities$106,461  $7,939  $114,400  
   Long-term debt and finance lease obligations, net of current portion187,278  (207) 187,071  
   Long-term operating lease liabilities—  37,371  37,371  
   Retained earnings1,178,677  (1,077) 1,177,600  

The components of lease expense for three and nine months ended July 4, 2020 were as follows (in thousands):
Three Months EndedNine Months Ended
July 4, 2020July 4, 2020
Finance lease expense:
   Amortization of right-of-use assets$951  $3,220  
   Interest on lease liabilities1,236  3,738  
Operating lease expense2,898  8,977  
Other lease expense957  2,216  
Total$6,042  $18,151  

Based on the nature of the ROU asset, amortization of finance right-of-use assets, operating lease expense and other lease expense are recorded within either cost of goods sold or selling and administrative expenses and interest on finance lease liabilities is recorded within interest expense on the Condensed Consolidated Statements of Comprehensive Income. Other lease expense includes lease expense for leases with an estimated total term of twelve months or less and variable lease expense related to variations in lease payments as a result of a change in factors or circumstances occurring after the lease possession date.
The following tables sets forth the amount of lease assets and lease liabilities included in the Company’s Condensed Consolidated Balance Sheets (in thousands):
Financial Statement Line ItemJuly 4, 2020
ASSETS
   Finance lease assetsProperty, plant and equipment, net$37,484  
   Operating lease assetsRight-of-use operating lease assets71,885  
      Total lease assets$109,369  
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
  Finance lease liabilitiesCurrent portion of long-term debt and finance lease obligations$2,765  
  Operating lease liabilitiesOther accrued liabilities8,061  
Non-current
  Finance lease liabilitiesLong-term debt and finance lease obligations, net of current portion37,387  
  Operating lease liabilitiesLong-term operating lease liabilities38,077  
        Total lease liabilities$86,290  

Other information related to the Company’s leases was as follows:
July 4, 2020
Weighted-average remaining lease term (in years)
   Finance leases12.8
   Operating leases18.5
Weighted-average discount rate
   Finance leases17.6 %
   Operating leases3.0 %
Three Months EndedNine Months Ended
July 4, 2020July 4, 2020
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
   Operating cash flows used in finance leases$1,152  $3,401  
   Operating cash flows used in operating leases2,445  8,283  
   Finance cash flows used in finance leases989  2,553  
ROU assets obtained in exchange for lease liabilities (in thousands)
   Operating leases$83  $7,592  
   Finance leases2,133  2,490  
Future minimum lease payments required under finance and operating leases as of July 4, 2020, were as follows (in thousands):
Operating leasesFinance leases
Remaining 2020$2,581  $1,782  
20218,787  7,285  
20228,013  6,811  
20237,570  5,785  
20245,963  4,993  
2025 and thereafter20,457  98,762  
Total minimum lease payments53,371  125,418  
Less: imputed interest(7,233) (85,266) 
Present value of lease liabilities$46,138  $40,152  

As of July 4, 2020, the Company’s future operating leases that have not yet commenced are immaterial.
Future minimum lease payments required under long-term operating and capital leases as of September 28, 2019, were as follows (in thousands):
Operating leasesCapital leases
2020$10,395  $6,734  
20216,554  3,490  
20225,584  2,884  
20235,153  1,652  
20243,713  958  
Thereafter9,426  34,143  
Total $40,825  $49,861