Fair Value Measurements

12 Months Ended

Jun. 29, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 6. Fair Value Measurements

We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: 

Level 1:	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:	Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3:	Inputs are unobservable inputs based on our assumptions.

The fair value of our Level 1 financial instruments, such as money market funds and U.S. Treasury securities, which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our pricing service against fair values obtained from another independent source.

Our pension assets consist of multiple institutional funds (“pension funds”) of which the fair values are based on the quoted prices of the underlying funds. Pension funds are primarily classified as Level 2 assets since such funds are not directly traded in active markets. Refer to “Note 15. Employee Retirement Plans.”

Financial assets measured at fair value on a recurring basis are summarized below (in millions):

	Level 1		Level 2		Level 3		Total
June 29, 2024 (1)
Assets:
Cash equivalents:
Commercial paper	$	—	$	15.9	$	—	$	15.9
Money market funds	$	223.9	$	—	$	—	$	223.9
Short-term investments:
Certificates of deposit	—		0.8		—		0.8
Commercial paper	—		12.6		—		12.6
Corporate debt securities	—		243.9		—		243.9
U.S. Agency securities			80.9				80.9
U.S. Treasury securities	112.1		—		—		112.1
Total assets	$	336.0	$	354.1	$	—	$	690.1

(1) Excludes $196.9 million in cash held in our bank accounts as of June 29, 2024.

	Level 1		Level 2		Level 3		Total
July 1, 2023 (1)
Assets:
Cash equivalents:
Money market funds	$	276.1	$	—	$	—	276.1
U.S. Agency securities	—		4.0		—		4.0
U.S. Treasury securities	324.6		—		—		324.6
Short-term investments:
Certificates of deposit	—		16.5		—		16.5
Commercial paper	—		132.7		—		132.7
Corporate debt securities	—		468.8		—		468.8
U.S. Agency securities	—		206.2		—		206.2
U.S. Treasury securities	330.4		—		—		330.4
Total assets	$	931.1	$	828.2	$	—	$	1,759.3

(1) Excludes $254.3 million in cash held in our bank accounts as of July 1, 2023.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the convertible notes, see “Note 10. Debt”. The estimated fair value of the convertible notes was determined based on the trading price of the convertible notes as of the last day of trading for the period. We consider the fair value of the convertible notes to be a Level 2 measurement as they are not actively traded in markets.

The carrying amounts and estimated fair values of our convertible notes are as follows for the periods presented (in millions):

	June 29, 2024				July 1, 2023
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2029 Notes	$	599.4	$	588.8	$	598.6	$	625.2
2028 Notes	856.6		680.2		855.5		677.8
2026 Notes	1,047.2		948.3		1,045.9		933.2
2024 Notes	—		—		311.6		345.2
	$	2,503.2	$	2,217.3	$	2,811.6	$	2,581.4

Assets Measured at Fair Value on a Non-Recurring Basis

We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. If not recoverable, an impairment loss would be calculated based on the excess of the carrying amount over the fair value.

Management utilizes various valuation methods, including an income approach, a market approach and a cost approach, to estimate the fair value of intangibles and other long-lived assets. During the annual impairment testing performed in the fourth quarter of fiscal 2024, we concluded that our intangible and other long-lived assets were not impaired. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, or any indicators of impairment exist.