Company Quick10K Filing
Infinera
Price5.60 EPS-3
Shares181 P/E-2
MCap1,011 P/FCF-6
Net Debt198 EBIT-426
TEV1,210 TEV/EBIT-3
TTM 2019-09-28, in MM, except price, ratios
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8-K 2020-11-20
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8-K 2018-02-15
8-K 2018-02-07

INFN 10Q Quarterly Report

Part I. Financial Information
Item 1.Condensed Consolidated Financial Statements (Unaudited)
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
Part II. Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 6.Exhibits
EX-31.1 infn-09262020exhibit311.htm
EX-31.2 infn-09262020exhibit312.htm
EX-32.1 infn-09262020exhibit321.htm

Infinera Earnings 2020-09-26

Balance SheetIncome StatementCash Flow
1.91.51.10.80.40.02012201420172020
Assets, Equity
0.40.30.20.0-0.1-0.22012201420172020
Rev, G Profit, Net Income
0.40.30.20.0-0.1-0.22012201420172020
Ops, Inv, Fin

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Table of Contents

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
or
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)
Delaware77-0560433
(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 classTrading Symbol(s) Name of exchange on which registered
Common stock, par value $0.001 per shareINFN 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.


Table of Contents
INFINERA CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED SEPTEMBER 26, 2020
INDEX
 
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 6.


Table of Contents
PART I. FINANCIAL INFORMATION
 

Item 1.Condensed Consolidated Financial Statements (Unaudited)
3

Table of Contents
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 
Inventory275,839 340,429 
Prepaid expenses and other current assets158,765 139,217 
Total current assets925,969 942,831 
Property, plant and equipment, net143,878 150,793 
Operating lease right-of-use assets66,458 68,081 
Intangible assets132,559 170,346 
Goodwill256,178 249,848 
Long-term restricted cash14,735 19,257 
Other non-current assets31,690 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 liabilities164,233 193,168 
Accrued compensation and related benefits47,170 92,221 
Short-term debt, net24,886 31,673 
Accrued warranty19,163 21,107 
Deferred revenue88,106 103,753 
Total current liabilities500,335 715,319 
Long-term debt, net515,739 323,678 
Long-term financing lease obligations1,629 2,394 
Accrued warranty, non-current22,988 22,241 
Deferred revenue, non-current29,952 36,067 
Deferred tax liability4,578 8,700 
Operating lease liabilities71,111 64,210 
Other long-term liabilities75,907 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 capital1,888,492 1,740,884 
Accumulated other comprehensive loss(22,117)(34,639)
Accumulated deficit(1,517,340)(1,319,891)
Total stockholders' equity349,228 386,535 
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 EndedNine Months Ended
 September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Revenue:
Product$261,906 $253,754 $778,325 $703,627 
Services78,305 71,587 223,746 210,671 
Total revenue340,211 325,341 1,002,071 914,298 
Cost of revenue:
Cost of product185,001 186,205 573,312 521,523 
Cost of services38,100 34,866 115,394 108,373 
Amortization of intangible assets7,287 7,796 24,636 24,146 
Acquisition and integration costs43 8,447 1,828 21,211 
Restructuring and related1,504 1,198 4,252 24,528 
Total cost of revenue231,935 238,512 719,422 699,781 
Gross profit108,276 86,829 282,649 214,517 
Operating expenses:
Research and development65,636 71,748 200,906 219,345 
Sales and marketing28,954 35,756 97,459 113,444 
General and administrative28,183 27,621 87,904 96,337 
Amortization of intangible assets4,696 6,861 13,836 20,663 
Acquisition and integration costs1,045 11,962 13,611 31,260 
Restructuring and related6,679 2,168 17,356 22,827 
Total operating expenses135,193 156,116 431,072 503,876 
Loss from operations(26,917)(69,287)(148,423)(289,359)
Other income (expense), net:
Interest income7 131 85 1,080 
Interest expense(12,645)(7,868)(33,875)(22,711)
Other gain (loss), net5,018 (6,195)(9,656)(5,908)
Total other income (expense), net(7,620)(13,932)(43,446)(27,539)
Loss before income taxes(34,537)(83,219)(191,869)(316,898)
Provision for income taxes1,359 1,548 4,930 3,126 
Net loss$(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:
Basic189,589 179,988 185,737 178,357 
Diluted189,589 179,988 185,737 178,357 
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 EndedNine 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 adjustment4,913 (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 StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Stockholders' Equity
 SharesAmount
Balance at June 27, 2020187,299 $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 costs4,050 4 30,626 30,630 
ESPP shares issued1,162 1 7,9517,952 
Restricted stock units released465 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, 2020192,880 $193 $1,888,492 $(22,117)$(1,517,340)$349,228 


Nine Months Ended September 26, 2020
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Stockholders' Equity
 SharesAmount
Balance at December 28, 2019181,134 $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 costs4,050 4 30,626 30,630 
ESPP shares issued3,001 3 15,343 — — 15,346 
Restricted stock units released5,013 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, 2020192,880 $193 $1,888,492 $(22,117)$(1,517,340)$349,228 



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Three Months Ended September 28, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total Stockholders' Equity
 SharesAmount
Balance at June 29, 2019179,339 $179 $1,715,657 $(32,236)$(1,168,530)$515,070 
ESPP shared issued1,073 1 4,311 — — 4,312 
Restricted stock units released196 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, 2019180,595 $181 $1,729,875 $(50,060)$(1,253,297)$426,699 



Nine Months Ended September 28, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total Stockholders' Equity
 SharesAmount
Balance at December 29, 2018175,452 $175 $1,685,916 $(25,300)$(956,970)703,821 
ESPP shares issued2,898 3 12,049 — — 12,052 
Restricted stock units released2,338 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, 2019180,595 $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 amortization74,263 91,181 
Non-cash restructuring charges and related costs2,893 17,194 
Amortization of debt discount and issuance costs20,475 14,107 
Operating lease expense14,123 25,922 
Stock-based compensation expense36,542 31,565 
Other, net3,891 579 
Changes in assets and liabilities:
Accounts receivable55,252 27,521 
Inventory63,201 (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 Notes194,500  
Proceeds from revolving line of credit55,000 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 stock15,352 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 activities276,849 48,673 
Effect of exchange rate changes on cash and restricted cash(2,198)(3,260)
Net change in cash, cash equivalents and restricted cash82,987 (121,707)
Cash, cash equivalents and restricted cash at beginning of period132,797 242,337 
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 cash4,503  
Long-term restricted cash14,735 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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Table of Contents
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
11


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
12


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 
202120,807 
202218,579 
202315,443 
202413,420 
Thereafter40,977 
Total lease payments115,929 
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 term6.75 years
Weighted average discount rate9.15 %
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
13


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 $