V2X, Inc. - 10-Q filing on 2019-08-06

Leases

6 Months Ended

Jun. 28, 2019

We determine whether an arrangement contains a lease at inception. We have operating leases for office space, apartments, vehicles, and machinery and equipment. Our operating leases have lease terms of less than one year to ten years.

We do not separate lease components (e.g., fixed payments for rent) from non-lease components (e.g., common area maintenance) but account for the non-lease components and non-components (e.g., property taxes and insurance) in a contract as part of the single lease component to which they are related.

The components of lease expense are as follows:



	Three Months Ended		Six Months Ended
(In thousands)	June 28, 2019		June 28, 2019
Operating lease expense	$	3,647	$	7,063
Variable lease expense	225		398
Short-term lease expense	11,422		22,619
Total lease expense	$	15,294	$	30,080

Supplemental balance sheet information related to our operating leases is as follows:



(In thousands)	June 28, 2019
Right-of-use assets	$	17,987

Current lease liabilities (recorded in other accrued liabilities)	$	10,112
Long-term lease liabilities (recorded in other non-current liabilities)	8,658
Total operating lease liabilities	$	18,770

Initial ROU assets of $19.2 million were recognized as non-cash asset additions when the new lease accounting standard was adopted on January 1, 2019. Additional ROU assets of $5.2 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the first half of 2019.

The weighted average remaining lease term and discount rate for our operating leases at June 28, 2019 were 3.9 years and 6.0%, respectively.

Maturities of lease liabilities at June 28, 2019 were as follows:



(In thousands)
2019 (excluding the six months ended June 28, 2019)	$	7,143
2020	5,511
2021	2,076
2022	1,248
2023	1,282
2024 and beyond	4,543
Total lease payments	21,803
Less: Imputed interest	3,033
Total	$	18,770