Leases

12 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Leases

The Company primarily leases manufacturing and office spaces. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that are volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."

The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's silicon carbide device fabrication facility in New York.

Balance Sheet

Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):

Operating Leases:	June 30, 2024	June 25, 2023
Right-of-use asset (1)	$99.2	$98.0
Current lease liability (2)	6.9	6.4
Non-current lease liability (3)	114.0	112.0
Total operating lease liabilities	$120.9	$118.4
Finance Leases:
Finance lease assets (4)	$9.1	$9.5
Current portion of finance lease liabilities	0.5	0.5
Finance lease liabilities, less current portion	8.9	9.2
Total finance lease liabilities	$9.4	$9.7

(1) Within other assets on the consolidated balance sheets.

(2) Within other current liabilities on the consolidated balance sheets.

(3) Within other long-term liabilities on the consolidated balance sheets.

(4) Within property and equipment, net on the consolidated balance sheets.

Statement of Operations

Operating lease expense was $13.9 million, $9.3 million and $6.3 million in fiscal 2024, 2023 and 2022, respectively.

Finance lease amortization was $0.8 million, $0.8 million and $1.2 million, and interest expense was $0.3 million, $0.3 million and $0.3 million, in fiscal 2024, 2023 and 2022, respectively.

Cash Flows

Cash flow information consisted of the following (1):

	Fiscal Years Ended
(in millions of U.S. Dollars)	June 30, 2024	June 25, 2023	June 26, 2022
Cash (used in) provided by operating activities:
Cash paid for operating leases	($12.6)	($5.1)	($6.3)
Cash received for tenant allowance on operating leases	0.4	17.8	—
Cash paid for interest portion of financing leases	(0.3)	(0.3)	(0.3)
Cash used in financing activities:
Cash paid for principal portion of finance leases	(0.4)	(0.5)	(0.5)

(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of June 30, 2024 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending	Operating Leases	Finance Leases	Total
June 29, 2025	$14.4	$0.8	$15.2
June 28, 2026	13.7	0.8	14.5
June 27, 2027	13.4	0.5	13.9
June 25, 2028	13.4	0.2	13.6
June 24, 2029	13.5	0.2	13.7
Thereafter	95.7	13.8	109.5
Total lease payments	164.1	16.3	180.4
Future tenant improvement allowances	(4.6)	—	(4.6)
Imputed lease interest	(38.6)	(6.9)	(45.5)
Total lease liabilities	$120.9	$9.4	$130.3

Supplemental Disclosures

	Operating Leases		Finance Leases
Weighted average remaining lease term (in months) (1)	146		471
Weighted average discount rate (2)	4.48	%	2.69	%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 29 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.86%.

Lease Income

As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leased to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $1.0 million, $2.5 million and $3.6 million for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022, respectively.

The Company did not recognize any variable lease income for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022.

Leases

Leases

The Company primarily leases manufacturing and office spaces. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that are volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."

The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's silicon carbide device fabrication facility in New York.

Balance Sheet

Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):

Operating Leases:	June 30, 2024	June 25, 2023
Right-of-use asset (1)	$99.2	$98.0
Current lease liability (2)	6.9	6.4
Non-current lease liability (3)	114.0	112.0
Total operating lease liabilities	$120.9	$118.4
Finance Leases:
Finance lease assets (4)	$9.1	$9.5
Current portion of finance lease liabilities	0.5	0.5
Finance lease liabilities, less current portion	8.9	9.2
Total finance lease liabilities	$9.4	$9.7

(1) Within other assets on the consolidated balance sheets.

(2) Within other current liabilities on the consolidated balance sheets.

(3) Within other long-term liabilities on the consolidated balance sheets.

(4) Within property and equipment, net on the consolidated balance sheets.

Statement of Operations

Operating lease expense was $13.9 million, $9.3 million and $6.3 million in fiscal 2024, 2023 and 2022, respectively.

Finance lease amortization was $0.8 million, $0.8 million and $1.2 million, and interest expense was $0.3 million, $0.3 million and $0.3 million, in fiscal 2024, 2023 and 2022, respectively.

Cash Flows

Cash flow information consisted of the following (1):

	Fiscal Years Ended
(in millions of U.S. Dollars)	June 30, 2024	June 25, 2023	June 26, 2022
Cash (used in) provided by operating activities:
Cash paid for operating leases	($12.6)	($5.1)	($6.3)
Cash received for tenant allowance on operating leases	0.4	17.8	—
Cash paid for interest portion of financing leases	(0.3)	(0.3)	(0.3)
Cash used in financing activities:
Cash paid for principal portion of finance leases	(0.4)	(0.5)	(0.5)

(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of June 30, 2024 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending	Operating Leases	Finance Leases	Total
June 29, 2025	$14.4	$0.8	$15.2
June 28, 2026	13.7	0.8	14.5
June 27, 2027	13.4	0.5	13.9
June 25, 2028	13.4	0.2	13.6
June 24, 2029	13.5	0.2	13.7
Thereafter	95.7	13.8	109.5
Total lease payments	164.1	16.3	180.4
Future tenant improvement allowances	(4.6)	—	(4.6)
Imputed lease interest	(38.6)	(6.9)	(45.5)
Total lease liabilities	$120.9	$9.4	$130.3

Supplemental Disclosures

	Operating Leases		Finance Leases
Weighted average remaining lease term (in months) (1)	146		471
Weighted average discount rate (2)	4.48	%	2.69	%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 29 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.86%.

Lease Income

As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leased to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $1.0 million, $2.5 million and $3.6 million for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022, respectively.

The Company did not recognize any variable lease income for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022.

Leases

Leases

The Company primarily leases manufacturing and office spaces. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that are volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."

The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's silicon carbide device fabrication facility in New York.

Balance Sheet

Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):

Operating Leases:	June 30, 2024	June 25, 2023
Right-of-use asset (1)	$99.2	$98.0
Current lease liability (2)	6.9	6.4
Non-current lease liability (3)	114.0	112.0
Total operating lease liabilities	$120.9	$118.4
Finance Leases:
Finance lease assets (4)	$9.1	$9.5
Current portion of finance lease liabilities	0.5	0.5
Finance lease liabilities, less current portion	8.9	9.2
Total finance lease liabilities	$9.4	$9.7

(1) Within other assets on the consolidated balance sheets.

(2) Within other current liabilities on the consolidated balance sheets.

(3) Within other long-term liabilities on the consolidated balance sheets.

(4) Within property and equipment, net on the consolidated balance sheets.

Statement of Operations

Operating lease expense was $13.9 million, $9.3 million and $6.3 million in fiscal 2024, 2023 and 2022, respectively.

Finance lease amortization was $0.8 million, $0.8 million and $1.2 million, and interest expense was $0.3 million, $0.3 million and $0.3 million, in fiscal 2024, 2023 and 2022, respectively.

Cash Flows

Cash flow information consisted of the following (1):

	Fiscal Years Ended
(in millions of U.S. Dollars)	June 30, 2024	June 25, 2023	June 26, 2022
Cash (used in) provided by operating activities:
Cash paid for operating leases	($12.6)	($5.1)	($6.3)
Cash received for tenant allowance on operating leases	0.4	17.8	—
Cash paid for interest portion of financing leases	(0.3)	(0.3)	(0.3)
Cash used in financing activities:
Cash paid for principal portion of finance leases	(0.4)	(0.5)	(0.5)

(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of June 30, 2024 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending	Operating Leases	Finance Leases	Total
June 29, 2025	$14.4	$0.8	$15.2
June 28, 2026	13.7	0.8	14.5
June 27, 2027	13.4	0.5	13.9
June 25, 2028	13.4	0.2	13.6
June 24, 2029	13.5	0.2	13.7
Thereafter	95.7	13.8	109.5
Total lease payments	164.1	16.3	180.4
Future tenant improvement allowances	(4.6)	—	(4.6)
Imputed lease interest	(38.6)	(6.9)	(45.5)
Total lease liabilities	$120.9	$9.4	$130.3

Supplemental Disclosures

	Operating Leases		Finance Leases
Weighted average remaining lease term (in months) (1)	146		471
Weighted average discount rate (2)	4.48	%	2.69	%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 29 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.86%.

Lease Income

As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leased to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $1.0 million, $2.5 million and $3.6 million for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022, respectively.

The Company did not recognize any variable lease income for the fiscal years ended June 30, 2024, June 25, 2023 and June 26, 2022.