Infinera Earnings 2020-09-26

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

infn-20200926

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-33486

INFINERA CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						77-0560433
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

140 Caspian Court

Sunnyvale, CA 94089

(Address of principal executive offices, including zip code)

(408) 572-5200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common stock, par value $0.001 per share

INFN

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated Filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 2, 2020, 193,069,836 shares of the registrant’s Common Stock, $0.001 par value, were issued and outstanding.

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INFINERA CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED SEPTEMBER 26, 2020

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets - As of September 2 6 , 2020 and December 28, 2019	4

	Condensed Consolidated Statements of Operations - Three and Nine Months ended September 2 6 , 2020 and September 2 8 , 2019	5

	Condensed Consolidated Statements of Comprehensive Loss - Three and Nine Months ended September 26 , 2020 and September 2 8 , 2019	6

	Condensed Consolidated Statements of Stockholders' Equity - Three and Nine Months ended September 26 , 2020 and September 2 8 , 2019	7

	Condensed Consolidated Statements of Cash Flows - Nine Months ended September 26 , 2020 and September 2 8 , 2019	9

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	51

Item 4.	Controls and Procedures	52

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	53

Item 1A.	Risk Factors	55

Item 6.	Exhibits	78

	Signature Page	79

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PART I. FINANCIAL INFORMATION

Item 1.Condensed Consolidated Financial Statements (Unaudited)

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INFINERA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par values)

(Unaudited)


	September 26, 2020		December 28, 2019
ASSETS
Current assets:
Cash	$	196,546	$	109,201
Short-term restricted cash	4,503		4,339
Accounts receivable, net of allowance for doubtful accounts of $3,357 in 2020 and $4,005 in 2019	290,316		349,645
Inventory	275,839		340,429
Prepaid expenses and other current assets	158,765		139,217
Total current assets	925,969		942,831
Property, plant and equipment, net	143,878		150,793
Operating lease right-of-use assets	66,458		68,081
Intangible assets	132,559		170,346
Goodwill	256,178		249,848
Long-term restricted cash	14,735		19,257
Other non-current assets	31,690		27,182
Total assets	$	1,571,467	$	1,628,338
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	156,777	$	273,397
Accrued expenses and other current liabilities	164,233		193,168
Accrued compensation and related benefits	47,170		92,221
Short-term debt, net	24,886		31,673
Accrued warranty	19,163		21,107
Deferred revenue	88,106		103,753
Total current liabilities	500,335		715,319
Long-term debt, net	515,739		323,678
Long-term financing lease obligations	1,629		2,394
Accrued warranty, non-current	22,988		22,241
Deferred revenue, non-current	29,952		36,067
Deferred tax liability	4,578		8,700
Operating lease liabilities	71,111		64,210
Other long-term liabilities	75,907		69,194
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding	—		—
Common stock, $0.001 par value Authorized shares – 500,000 as of September 26, 2020 and December 28, 2019 Issued and outstanding shares – 192,879 as of September 26, 2020 and 181,134 as of December 28, 2019	193		181
Additional paid-in capital	1,888,492		1,740,884
Accumulated other comprehensive loss	(22,117)		(34,639)
Accumulated deficit	(1,517,340)		(1,319,891)
Total stockholders' equity	349,228		386,535
Total liabilities and stockholders’ equity	$	1,571,467	$	1,628,338

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INFINERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Revenue:
Product	$	261,906	$	253,754	$	778,325	$	703,627
Services	78,305		71,587		223,746		210,671
Total revenue	340,211		325,341		1,002,071		914,298
Cost of revenue:
Cost of product	185,001		186,205		573,312		521,523
Cost of services	38,100		34,866		115,394		108,373
Amortization of intangible assets	7,287		7,796		24,636		24,146
Acquisition and integration costs	43		8,447		1,828		21,211
Restructuring and related	1,504		1,198		4,252		24,528
Total cost of revenue	231,935		238,512		719,422		699,781
Gross profit	108,276		86,829		282,649		214,517
Operating expenses:
Research and development	65,636		71,748		200,906		219,345
Sales and marketing	28,954		35,756		97,459		113,444
General and administrative	28,183		27,621		87,904		96,337
Amortization of intangible assets	4,696		6,861		13,836		20,663
Acquisition and integration costs	1,045		11,962		13,611		31,260
Restructuring and related	6,679		2,168		17,356		22,827
Total operating expenses	135,193		156,116		431,072		503,876
Loss from operations	(26,917)		(69,287)		(148,423)		(289,359)
Other income (expense), net:
Interest income	7		131		85		1,080
Interest expense	(12,645)		(7,868)		(33,875)		(22,711)
Other gain (loss), net	5,018		(6,195)		(9,656)		(5,908)
Total other income (expense), net	(7,620)		(13,932)		(43,446)		(27,539)
Loss before income taxes	(34,537)		(83,219)		(191,869)		(316,898)
Provision for income taxes	1,359		1,548		4,930		3,126
Net loss	$	(35,896)	$	(84,767)	$	(196,799)	$	(320,024)
Net loss per common share:
Basic	$	(0.19)	$	(0.47)	$	(1.06)	$	(1.79)
Diluted	$	(0.19)	$	(0.47)	$	(1.06)	$	(1.79)
Weighted average shares used in computing net loss per common share:
Basic	189,589		179,988		185,737		178,357
Diluted	189,589		179,988		185,737		178,357

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INFINERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net loss	$	(35,896)	$	(84,767)	$	(196,799)	$	(320,024)
Other comprehensive income (loss), net of tax:
Change in unrealized gain on available-for-sale investments	—		2		—		91
Foreign currency translation adjustment	4,913		(10,525)		11,874		(18,031)
Amortization of actuarial gain (loss)	536		(7,301)		648		(6,820)
Net change in accumulated other comprehensive income (loss)	5,449		(17,824)		12,522		(24,760)
Comprehensive loss	$	(30,447)	$	(102,591)	$	(184,277)	$	(344,784)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INFINERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Three Months Ended September 26, 2020
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at June 27, 2020	187,299	$	187	$	1,838,677	$	(27,566)	$	(1,481,444)	$	329,854

Shares of common stock sold in at-the-market equity offering, net of issuance costs	4,050	4		30,626						30,630
ESPP shares issued	1,162	1		7,951						7,952
Restricted stock units released	465	1		—		—		—		1
Shares withheld for tax obligations	(96)	—		(640)		—		—		(640)
Stock-based compensation	—	—		11,878		—		—		11,878
Other comprehensive Income	—	—		—		5,449		—		5,449
Net loss	—	—		—		—		(35,896)		(35,896)
Balance at September 26, 2020	192,880	$	193	$	1,888,492	$	(22,117)	$	(1,517,340)	$	349,228


	Nine Months Ended September 26, 2020
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 28, 2019	181,134	$	181	$	1,740,884	$	(34,639)	$	(1,319,891)	$	386,535

Shares of common stock sold in at-the-market equity offering, net of issuance costs	4,050	4		30,626						30,630
ESPP shares issued	3,001	3		15,343		—		—		15,346
Restricted stock units released	5,013	5		—		—		—		5
Shares withheld for tax obligations	(318)	—		(1,959)		—		—		(1,959)
Stock-based compensation	—	—		35,801		—		—		35,801
Cumulative-effect adjustment from adoption of Topic 326	—	—		—		—		(650)		(650)
Conversion option related to convertible senior notes, net of allocated costs	—	—		67,797		—		—		67,797
Other comprehensive Income	—	—		—		12,522		—		12,522
Net loss	—	—		—		—		(196,799)		(196,799)
Balance at September 26, 2020	192,880	$	193	$	1,888,492	$	(22,117)	$	(1,517,340)	$	349,228

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	Three Months Ended September 28, 2019
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at June 29, 2019	179,339	$	179	$	1,715,657	$	(32,236)	$	(1,168,530)	$	515,070
ESPP shared issued	1,073	1		4,311		—		—		4,312
Restricted stock units released	196	1		—		—		—		1
Shares withheld for tax obligations	(13)	—		(39)		—		—		(39)
Stock-based compensation	—	—		9,946		—		—		9,946
Other comprehensive loss	—	—		—		(17,824)		—		(17,824)
Net loss	—	—		—		—		(84,767)		(84,767)
Balance at September 28, 2019	180,595	$	181	$	1,729,875	$	(50,060)	$	(1,253,297)	$	426,699


	Nine Months Ended September 28, 2019
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 29, 2018	175,452	$	175	$	1,685,916	$	(25,300)	$	(956,970)	703,821
ESPP shares issued	2,898	3		12,049		—		—		12,052
Restricted stock units released	2,338	3		(2)		—		—		1
Shares withheld for tax obligations	(93)	—		(393)		—		—		(393)
Stock-based compensation	—	—		32,305		—		—		32,305
Cumulative-effect adjustment from adoption of Topic 842	—	—		—		—		23,697		23,697
Other comprehensive loss	—	—		—		(24,760)		—		(24,760)
Net loss	—	—		—		—		(320,024)		(320,024)
Balance at September 28, 2019	180,595	$	181	$	1,729,875	$	(50,060)	$	(1,253,297)	$	426,699

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INFINERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended
	September 26, 2020		September 28, 2019
Cash Flows from Operating Activities:
Net loss	$	(196,799)	$	(320,024)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	74,263		91,181
Non-cash restructuring charges and related costs	2,893		17,194
Amortization of debt discount and issuance costs	20,475		14,107
Operating lease expense	14,123		25,922
Stock-based compensation expense	36,542		31,565
Other, net	3,891		579
Changes in assets and liabilities:
Accounts receivable	55,252		27,521
Inventory	63,201		(23,339)
Prepaid expenses and other assets	(25,479)		(53,470)
Accounts payable	(117,824)		16,487
Accrued liabilities and other expenses	(73,509)		23,190
Deferred revenue	(21,545)		(8,073)
Net cash used in operating activities	(164,516)		(157,160)
Cash Flows from Investing Activities:
Proceeds from sale of non-marketable equity investments	—		1,009
Proceeds from maturities of investments	—		26,584
Acquisition of business, net of cash acquired	—		(10,000)
Proceeds from sale of assets	—		778
Purchase of property and equipment, net	(27,148)		(28,331)
Net cash used in investing activities	(27,148)		(9,960)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock from at-the-market equity offering, net of issuance costs of $954	31,022		—
Proceeds from issuance of 2027 Notes	194,500		—
Proceeds from revolving line of credit	55,000		37,334
Repayment of revolving line of credit	(8,000)		—
Repayment of third party manufacturing funding	(5,346)		—
Payment of debt issuance cost	(2,437)		(124)
Repayment of mortgage payable	(233)		(197)
Principal payments on financing lease obligations	(1,050)		—
Proceeds from issuance of common stock	15,352		12,053
Minimum tax withholding paid on behalf of employees for net share settlement	(1,959)		(393)

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Net cash provided by financing activities	276,849		48,673
Effect of exchange rate changes on cash and restricted cash	(2,198)		(3,260)
Net change in cash, cash equivalents and restricted cash	82,987		(121,707)
Cash, cash equivalents and restricted cash at beginning of period	132,797		242,337
Cash, cash equivalents and restricted cash at end of period(1)	$	215,784	$	120,630

Supplemental disclosures of cash flow information:
Cash paid (refund) for income taxes, net	$	(4,962)	$	15,924
Cash paid for interest	$	14,415	$	13,369
Supplemental schedule of non-cash investing and financing activities:
Unpaid debt issuance cost	$	31	$	1,931
Third-party manufacturer funding for transfer expenses incurred	$	—	$	6,541
Transfer of inventory to fixed assets	$	453	$	2,440

(1) Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:


	September 26, 2020		September 28, 2019

	(In thousands)
Cash and cash equivalents	$	196,546	$	94,804
Short-term restricted cash	4,503		—
Long-term restricted cash	14,735		25,826
Total cash, cash equivalents and restricted cash	$	215,784	$	120,630

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INFINERA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Infinera Corporation (the “Company”) prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, employee benefit and pension plans, inventory valuation, accrued warranty, operating lease liabilities, business combinations, fair value measurement of investments and accounting for income taxes. Other less significant estimates, assumptions and judgments made by management include allowances for sales returns, allowances for doubtful accounts, useful life of intangible assets, and property, plant and equipment. Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. The Company expects uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the recent outbreak of a novel strain of the coronavirus (“COVID-19”). These estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in the Company's condensed consolidated financial statements.

The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated.

This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

To date, a few of the Company’s customers have accounted for a significant portion of its revenue. For the three months ended September 26, 2020, one customer accounted for 15% of the Company's total revenue. The same customer also accounted for 15% of the Company's total revenue for the three months ended September 28, 2019. For each of the nine months ended September 26, 2020 and September 28, 2019, the same customer accounted for 13% of the Company's total revenue.

Certain reclassifications have been made to prior period balances in order to conform to the current period presentation within the cash flows from operating activities in the condensed consolidated statements of cash flows. Certain other reclassifications have been made to prior period balances in order to conform to the current period presentation of accrued expenses and other current liabilities in Note 8, “Balance Sheet Details” to the Notes to Condensed Consolidated Financial Statements. These reclassifications were not material and had no impact on previously reported net cash used in operating activities in the Company's Condensed Consolidated Statements of Cash Flows for any periods presented or to the Company's Condensed consolidated Balance sheets for the periods ended September 26, 2020 and December 28, 2019.

There have been no material changes in the Company’s significant accounting policies for the nine months ended September 26, 2020 compared to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019, with the exception of updates to the policy noted below as a result of the adoption of Accounting Standards Update ("ASU") 2016-13 "Financial Instruments-Credit Losses (Topic 326)" as of December 29, 2019.

Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated credit losses resulting from the inability of its customers to make required payments and reviews the allowance quarterly. The Company determines expected credit losses by performing credit evaluations of its customers' financial condition, establishing both a general reserve and specific reserves for customers in an adverse financial condition and adjusting for its expectations of changes in conditions that may impact the collectability of outstanding receivables. The Company considers a customer's receivable balance past due when the amount is due beyond the credit terms extended. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks. Amounts are written off when receivables are determined to be uncollectible.

2.Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board ("FASB") issued Topic 326, in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. Topic 326 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior U.S. GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted Topic 326 on a modified retrospective basis in the first quarter of 2020 through a cumulative-effect adjustment at the beginning of the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of the Company’s customers, and external market factors. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). This update eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 was effective for the Company in its first quarter of 2020. The Company adopted ASU 2018-13 in the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements.

Accounting Pronouncements Not Yet Effective

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40). The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. This update removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. This update also simplifies the diluted net income per share calculation in certain areas. The update is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2020-06 would have on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04 (Topic 848), "Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the impact the adoption of ASU 2020-04 would have on its consolidated financial statements.

In December 2019, FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" (“ASU 2019-12”), as part of its simplification initiative. ASU 2019-12 removes certain exceptions from Accounting Standards Codification ("ASC") 740, "Income Taxes" ("ASC 740"), including (i) the exception to the incremental approach for intra period tax allocation when there is a loss from continuing operations and income or a gain from other items such as discontinued operations or other comprehensive income; (ii) the exception to accounting for outside basis differences of equity method investments and foreign subsidiaries; and (iii) the exception to limit tax benefit recognized in interim period in cases when the year-to-date losses exceeds anticipated losses. ASU

2019-12 also simplifies U.S. GAAP in several other areas of ASC 740 such as (i) franchise taxes and other taxes partially based on income; (ii) step-up in tax basis goodwill considered part of a business combination in which the book goodwill was originally recognized or should be considered a separate transaction; (iii) separate financial statements of entities not subject to tax; and (iv) interim recognition of enactment of tax laws or rate changes. ASU 2019-12 is effective for the Company for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2020, with early adoption permitted. The Company elected not to early adopt ASU 2019-12 as of September 26, 2020. The Company is currently evaluating the impact the adoption of ASU 2019-12 would have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”). This update eliminates, adds and modifies certain disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 is effective for the Company in its first quarter of 2021, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2018-14 would have on its consolidated financial statements.

3. Leases

The Company has operating leases for real estate and automobiles. The operating lease expense for the three months and nine months ended September 26, 2020 was $6.4 million and $21.5 million (including $1.8 million of rent expense due to restructuring resulting in abandonment of certain lease facilities), respectively. The operating lease expense for the three and nine months ended September 28, 2019 was $8.0 million and $31.3 million (including $11.9 million of accelerated rent expense due to restructuring resulting in abandonment of certain lease facilities), respectively. Variable lease cost, short-term lease cost and sublease income were immaterial during the three months and nine months ended September 26, 2020 and September 28, 2019.

As of September 26, 2020, $15.1 million was included in accrued expenses and other current liabilities and $71.1 million as long-term operating lease liabilities. As of December 28, 2019, $18.1 million was included in accrued expenses and other current liabilities and $64.2 million as long-term operating lease liabilities.

The following table presents maturity of lease liabilities under the Company's non-cancelable operating leases as of September 26, 2020 (in thousands):


Remainder of 2020	$	6,703
2021	20,807
2022	18,579
2023	15,443
2024	13,420
Thereafter	40,977
Total lease payments	115,929
Less: interest(1)	29,742
Present value of lease liabilities	$	86,187

(1) Calculated using the interest rate for each lease.

The following table presents supplemental information for the Company's non-cancelable operating leases for the nine months ended September 26, 2020 (in thousands, except for weighted average and percentage data):


Weighted average remaining lease term	6.75 years
Weighted average discount rate	9.15		%
Cash paid for amounts included in the measurement of lease liabilities	$	19,665
Operating cash flow from operating leases	$	19,665
Leased assets obtained in exchange for new operating lease liabilities	$	13,156

Financing Lease Obligations

During the three and nine months ended September 26, 2020, there were no new finance lease arrangements. The lease terms for existing arrangements range from three to five with options to purchase at the

end of the term. Finance lease expense for the three months and nine months ended September 26, 2020 was approximately $0.2 million and $0.7 million, respectively. Finance lease expense for each of the three and nine months ended September 28, 2019 was $0.2 million.

As of September 26, 2020, $1.3 million was included in accrued expenses and other current liabilities and $1.6 million as long-term finance lease obligation related to these equipment finance lease arrangements. As of December 28, 2019, $1.4 million was included in accrued expenses and other current liabilities and $

Price	5.60	EPS	-3
Shares	181	P/E	-2
MCap	1,011	P/FCF	-6
Net Debt	198	EBIT	-426
TEV	1,210	TEV/EBIT	-3
TTM 2019-09-28, in MM, except price, ratios

10-Q	2020-09-26	Filed 2020-11-05
10-Q	2020-06-27	Filed 2020-08-06
10-Q	2020-03-28	Filed 2020-05-15
10-K	2019-12-28	Filed 2020-03-04
10-Q	2019-09-28	Filed 2019-11-12
10-Q	2019-06-29	Filed 2019-08-08
10-Q	2019-03-30	Filed 2019-05-09
10-K	2018-12-29	Filed 2019-03-14
10-Q	2018-09-29	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-30	Filed 2018-02-28
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-07-01	Filed 2017-08-08
10-Q	2017-04-01	Filed 2017-05-10
10-K	2016-12-31	Filed 2017-02-23
10-Q	2016-09-24	Filed 2016-11-01
10-Q	2016-06-25	Filed 2016-08-02
10-Q	2016-03-26	Filed 2016-05-04
10-K	2015-12-26	Filed 2016-02-23
10-Q	2015-09-26	Filed 2015-11-05
10-Q	2015-06-27	Filed 2015-07-31
10-Q	2015-03-28	Filed 2015-05-04
10-K	2014-12-27	Filed 2015-02-18
10-Q	2014-09-27	Filed 2014-10-29
10-Q	2014-06-28	Filed 2014-08-01
10-Q	2014-03-29	Filed 2014-04-30
10-K	2013-12-28	Filed 2014-02-21
10-Q	2013-09-28	Filed 2013-11-01
10-Q	2013-06-29	Filed 2013-08-05
10-Q	2013-03-30	Filed 2013-05-07
10-K	2012-12-29	Filed 2013-03-05
10-Q	2012-09-29	Filed 2012-11-06
10-Q	2012-06-30	Filed 2012-08-07
10-Q	2012-03-31	Filed 2012-05-07
10-K	2011-12-31	Filed 2012-03-06
10-Q	2011-09-24	Filed 2011-11-01
10-Q	2011-06-25	Filed 2011-08-02
10-Q	2011-03-26	Filed 2011-05-03
10-K	2010-12-25	Filed 2011-03-01
10-Q	2010-09-25	Filed 2010-11-02
10-Q	2010-06-26	Filed 2010-08-03
10-Q	2010-03-27	Filed 2010-05-05
10-K	2009-12-26	Filed 2010-03-01

8-K	2020-11-20
8-K	2020-11-05
8-K	2020-08-10
8-K	2020-08-05
8-K	2020-08-05
8-K	2020-05-29
8-K	2020-05-21
8-K	2020-05-11
8-K	2020-04-30
8-K	2020-04-13
8-K	2020-03-04
8-K	2020-03-04
8-K	2020-02-25
8-K	2020-01-03
8-K	2019-12-23
8-K	2019-11-12
8-K	2019-11-05
8-K	2019-08-20
8-K	2019-08-07
8-K	2019-08-01
8-K	2019-08-01
8-K	2019-06-03
8-K	2019-05-23
8-K	2019-05-08
8-K	2019-03-04
8-K	2019-02-21
8-K	2019-01-24
8-K	2018-12-10
8-K	2018-11-06
8-K	2018-10-01
8-K	2018-09-06
8-K	2018-08-07
8-K	2018-07-23
8-K	2018-05-24
8-K	2018-05-09
8-K	2018-02-15
8-K	2018-02-07

EX-31.1	infn-09262020exhibit311.htm
EX-31.2	infn-09262020exhibit312.htm
EX-32.1	infn-09262020exhibit321.htm

INFN 10Q Quarterly Report

Infinera Earnings 2020-09-26