Leases

12 Months Ended

Dec. 31, 2019

Lease

I.    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 twelve years.

Total lease expense for the year ended December 31, 2019 was $35.6 million and included $11.1 million of variable lease costs and $2.6 million of costs related to short-term leases, which are not recorded on the consolidated balance sheets.

At December 31, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 4.5 years and 5.0%, respectively.

Supplemental cash flow information related to leases was as follows:

	For the Year Ended
	December 31, 2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows	$	19,400
Right-of-use assets obtained in exchange for new lease obligations		26,739

Maturities of lease liabilities as of December 31, 2019 were as follows:

	Operating Lease
	(in thousands)
2020	$	21,874
2021		17,638
2022		12,944
2023		6,496
2024		5,106
Thereafter		8,388
Total lease payments		72,446
Less imputed interest		(7,121	)
Total lease liabilities	$	65,325

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