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Leases
 6 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
We determine if an arrangement is a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either finance or operating.
Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance lease assets are recorded in property, plant and equipment, net, and finance lease liabilities within other accrued liabilities and other liabilities on our Condensed Consolidated Balance Sheets. Finance lease assets are amortized in operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component for lease liabilities included in interest expense and recognized using the effective interest method over the lease term.
Operating leases are recorded in other assets and operating lease liabilities, current and non-current on the Company’s Condensed Consolidated Balance Sheets. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term.
The Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that Coherent will exercise that option.
The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations.
The following table presents lease costs, which include leases for arrangements with an initial term of more than 12 months, lease term, and discount rates ($000):
Three Months Ended December 31, 2022Six Months Ended
December 31, 2022
Finance lease cost
Amortization of right-of-use assets$417 $833 
Interest on lease liabilities284 572 
Total finance lease cost701 1,405 
Operating lease cost13,045 26,311 
Total lease cost$13,746 $27,716 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$284 $572 
Operating cash flows from operating leases12,354 25,052 
Financing cash flows from finance leases346 688 
Weighted-Average Remaining Lease Term (in Years)
Finance leases9.0
Operating leases6.8
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases5.3 %
Three Months Ended
December 31, 2021		Six Months Ended
December 31, 2021
Finance Lease Cost
Amortization of right-of-use assets$418 $838 
Interest on lease liabilities302 609 
Total finance lease cost$720 $1,447 
Operating lease cost9,176 18,395 
Sublease income143 507 
Total lease cost$9,753 $19,335 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$302 $609 
Operating cash flows from operating leases8,850 17,665 
Financing cash flows from finance leases312 622 
Leases Leases
We determine if an arrangement is a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either finance or operating.
Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance lease assets are recorded in property, plant and equipment, net, and finance lease liabilities within other accrued liabilities and other liabilities on our Condensed Consolidated Balance Sheets. Finance lease assets are amortized in operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component for lease liabilities included in interest expense and recognized using the effective interest method over the lease term.
Operating leases are recorded in other assets and operating lease liabilities, current and non-current on the Company’s Condensed Consolidated Balance Sheets. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term.
The Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that Coherent will exercise that option.
The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations.
The following table presents lease costs, which include leases for arrangements with an initial term of more than 12 months, lease term, and discount rates ($000):
Three Months Ended December 31, 2022Six Months Ended
December 31, 2022
Finance lease cost
Amortization of right-of-use assets$417 $833 
Interest on lease liabilities284 572 
Total finance lease cost701 1,405 
Operating lease cost13,045 26,311 
Total lease cost$13,746 $27,716 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$284 $572 
Operating cash flows from operating leases12,354 25,052 
Financing cash flows from finance leases346 688 
Weighted-Average Remaining Lease Term (in Years)
Finance leases9.0
Operating leases6.8
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases5.3 %
Three Months Ended
December 31, 2021		Six Months Ended
December 31, 2021
Finance Lease Cost
Amortization of right-of-use assets$418 $838 
Interest on lease liabilities302 609 
Total finance lease cost$720 $1,447 
Operating lease cost9,176 18,395 
Sublease income143 507 
Total lease cost$9,753 $19,335 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$302 $609 
Operating cash flows from operating leases8,850 17,665 
Financing cash flows from finance leases312 622