Leases

9 Months Ended

Sep. 29, 2019

H. LEASES

On January 1, 2019, Teradyne adopted ASC 842 using the modified retrospective approach. Under this method of adoption, the comparative information in the consolidated financial statements has not been revised and continues to be reported under the previously applicable lease accounting guidance (ASC 840). Adoption of ASC 842 resulted in recording ROU assets and lease liabilities of approximately $50.1 million and $54.3 million, respectively. The adoption of ASC 842 did not have a material impact on beginning retained earnings, the consolidated statement of operations, cash flows, or earnings per share.

Teradyne has facility and auto leases, which are accounted for as operating leases. Teradyne’s facility leases are primarily used for administrative functions, research and development, manufacturing, and storage and distribution. Remaining lease terms range from less than one year to ten years.

Total lease expense for the three months ended September 29, 2019 was $9.1 million and included $3.0 million of variable lease costs and $0.7 million of costs related to short-term leases which are not recorded on the consolidated balance sheets. Total lease expense for the nine months ended September 29, 2019 was $26.6 million and included $8.3 million of variable lease costs and $2.2 million of costs related to short-term leases which are not recorded on the consolidated balance sheets.

At September 29, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 4.7 years and 5.0%, respectively.

Supplemental cash flow information related to leases was as follows:


	For the Three Months Ended		For the Nine Months Ended
	September 29, 2019		September 29, 2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows:	$	4,946	$	14,998
Right-of-use assets obtained in exchange for new lease obligations		8,315		23,727

Maturities of lease liabilities as of September 29, 2019 were as follows:


	Operating Lease
	(in thousands)
2019	$	5,520
2020		20,368
2021		16,045
2022		11,603
2023		6,135
Thereafter		13,285

Total lease payments		72,956
Less imputed interest		(7,757	)

Total lease liabilities	$	65,199

As of December 31, 2018, future

non-cancelable

rent obligations as determined under ASC 840 were as follows:


	Operating Lease
	(in thousands)
2019	$	19,570
2020		18,293
2021		13,578
2022		9,693
2023		5,449
Thereafter		9,472

Total lease payments	$	76,055