Commitments

Leases. The Company leases certain property, facilities and equipment under non-cancelable lease agreements. Land and facility leases expire at various dates through 2082 and contain various provisions for rental adjustments including, in certain cases, a provision based on increases in the Consumer Price Index. Also, certain leases provide for renewal of the lease at the Company's option at expiration of the lease. All of the leases require the Company to pay property taxes, insurance and normal maintenance costs.

Future minimum lease payments for operating leases (including accrued lease payments relating to restructuring plans) with initial or remaining terms of one year or more were as follows at June 27, 2014 (lease payments are shown net of sublease income):



Fiscal Years Ending	Operating Leases
	(Dollars in millions)
2015	$	42
2016	31
2017	21
2018	15
2019	22
Thereafter	69
	$	200

Total rent expense for all land, facility and equipment operating leases, net of sublease income, was $39 million, $35 million and $34 million for fiscal years 2014, 2013 and 2012, respectively. Total sublease rental income for fiscal years 2014, 2013 and 2012 was $2 million, $4 million and $6 million, respectively. The Company subleases a portion of its facilities that it considers to be in excess of current requirements. As of June 27, 2014, total future lease income to be recognized for the Company's existing subleases is approximately $5 million.

The Company recorded amounts for both adverse and favorable leasehold interests and for exit costs that apply directly to the lease commitments assumed through the 2006 acquisition of Maxtor. As of June 27, 2014, the Company had a $4 million adverse leasehold interest related to leases acquired from Maxtor. The adverse leasehold interest is being amortized to Cost of revenue and Operating expenses over the remaining duration of the leases. In addition, the Company had $5 million and $9 million remaining in accrued exit costs related to the planned exit of Maxtor leased excess facilities at June 27, 2014 and June 28, 2013, respectively.

Capital Expenditures. The Company's non-cancelable commitments for construction of manufacturing and product development facilities and purchases of equipment approximated $189 million at June 27, 2014.

LSI Asset Acquisition. On May 29, 2014, the Company and Avago Technologies Limited, a leading semiconductor device supplier to the enterprise storage, wired, wireless and industrial end markets, announced that they had entered into a definitive asset purchase agreement under which the Company will acquire the assets of LSI’s Accelerated Solutions Division (“ASD”) and Flash Components Division (“FCD”) from Avago for $450 million in cash. The acquisition strengthens the Company’s strategy to deliver a full suite of storage solutions, by providing it with established Enterprise PCIe flash and SSD controller capabilities to deliver solutions for the growing flash storage market. The transaction is expected to close in the first quarter of fiscal year 2015, subject to the satisfaction of customary closing conditions and the receipt of certain regulatory approvals, including those required by the Hart-Scott-Rodino Antitrust Improvements Act. Because the transaction was pending at the time this Annual Report on Form 10-K was filed with the Securities and Exchange Commission, certain disclosures required by ASC Topic 805 Business Combinations have not been made herein.