Leases

6 Months Ended

Jul. 04, 2021

The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion. There were no options to extend or terminate that were included in the determination of the lease term for the leases outstanding as of July 4, 2021. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of July 4, 2021.

The total operating lease expense for the three-month and six-month periods ended July 4, 2021 was $2,021,000 and $4,023,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 4, 2021 were $2,014,000 and $4,075,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 4, 2021 was $38,000 and $78,000, respectively.

The total operating lease expense for the three-month and six-month periods ended June 28, 2020 was $2,147,000 and $4,053,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended June 28, 2020 were $2,091,000 and $3,954,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended June 28, 2020 was $23,000 and $62,000, respectively.

Future operating lease cash payments are as follows (in thousands):


Year Ended December 31,	Amount
Remainder of fiscal 2021	$	4,598
2022	7,302
2023	5,531
2024	2,500
2025	1,580
2026	1,018
Thereafter	3,838
	$	26,367

The discounted present value of the future lease cash payments resulted in a lease liability of $24,250,000 and $26,230,000 as of July 4, 2021 and December 31, 2020, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of July 4, 2021 or December 31, 2020.

The weighted-average discount rate was 3.8% and 4.0% for the leases outstanding as of July 4, 2021 and December 31, 2020, respectively. The weighted-average remaining lease term was 4.8 and 5.1 years for the leases outstanding as of July 4, 2021 and December 31, 2020, respectively.

Management closed eleven leased offices in 2020, prior to the end of their lease terms, as a part of the Company's restructuring plan (refer to Note 16). The carrying value of the lease assets associated with the majority of these offices was reduced to zero as of June 28, 2020, resulting in operating lease asset impairment charges of $2,534,000 for the three-month period ended June 28, 2020 that are included in "Restructuring charges" on the Consolidated Statements of Operations. Management is currently negotiating early contract terminations for the remaining lease liability obligations associated with these abandoned offices, which obligations totaled $2,264,000 and $2,877,000 as of July 4, 2021 and December 31, 2020, respectively, and are included in "Operating lease liabilities" on the Consolidated Balance Sheets.