Leases

12 Months Ended

Jun. 29, 2024

Leases [Abstract]

Leases

Note 8. Leases

We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2033. These operating leases are primarily for administrative offices, research and development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement.

As of June 29, 2024, we sublease a portion of our offices in the Japan, United Kingdom, the United States and Canada. These subleases will expire at various dates through fiscal year 2028. We anticipate receiving approximately $0.8 million in sublease income over the next fiscal year.

The components of lease costs, lease term, and discount rate are as follows (in millions, except for weighted average data):

	June 29, 2024			July 1, 2023			July 2, 2022
Operating lease cost	$	16.8		$	14.4		$	13.0
Short-term and variable lease cost	4.6			2.7			2.0
Sublease income	(2.0)			(2.6)			(3.0)
Total lease cost	$	19.4		$	14.5		$	12.0
Weighted average remaining lease term (in years):
Operating leases	5.2			5.8			6.9
Weighted average discount rate (in percentages):
Operating leases	3.5		%	3.1		%	3.0		%

As of June 29, 2024, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, were as follows (in millions):

Fiscal Years	Operating Leases (1)
2025	$	15.3
2026	12.9
2027	11.7
2028	8.0
2029	5.7
Thereafter	8.2
Total minimum lease payments	61.8
Less: amount representing interest	(5.4)
Present value of total lease liabilities	$	56.4

(1) Non-cancellable sublease proceeds for fiscal 2025 of $0.8 million are not included in the table above.

In July 2024, we purchased the land and building of our wafer fabrication facility located in Sagamihara, Japan for a total transaction price of $46.5 million including related fees and refundable consumption taxes. Our lease of the building at the premises, which was originally scheduled to end in March 2033, was terminated as a result of the purchase. We derecognized the related right-of-use assets of $31.9 million and lease liability of $17.4 million at the purchase completion date. Refer to “Note 19. Subsequent Events”.

Leases

Note 8. Leases

We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2033. These operating leases are primarily for administrative offices, research and development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement.

As of June 29, 2024, we sublease a portion of our offices in the Japan, United Kingdom, the United States and Canada. These subleases will expire at various dates through fiscal year 2028. We anticipate receiving approximately $0.8 million in sublease income over the next fiscal year.

The components of lease costs, lease term, and discount rate are as follows (in millions, except for weighted average data):

	June 29, 2024			July 1, 2023			July 2, 2022
Operating lease cost	$	16.8		$	14.4		$	13.0
Short-term and variable lease cost	4.6			2.7			2.0
Sublease income	(2.0)			(2.6)			(3.0)
Total lease cost	$	19.4		$	14.5		$	12.0
Weighted average remaining lease term (in years):
Operating leases	5.2			5.8			6.9
Weighted average discount rate (in percentages):
Operating leases	3.5		%	3.1		%	3.0		%

As of June 29, 2024, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, were as follows (in millions):

Fiscal Years	Operating Leases (1)
2025	$	15.3
2026	12.9
2027	11.7
2028	8.0
2029	5.7
Thereafter	8.2
Total minimum lease payments	61.8
Less: amount representing interest	(5.4)
Present value of total lease liabilities	$	56.4

(1) Non-cancellable sublease proceeds for fiscal 2025 of $0.8 million are not included in the table above.

In July 2024, we purchased the land and building of our wafer fabrication facility located in Sagamihara, Japan for a total transaction price of $46.5 million including related fees and refundable consumption taxes. Our lease of the building at the premises, which was originally scheduled to end in March 2033, was terminated as a result of the purchase. We derecognized the related right-of-use assets of $31.9 million and lease liability of $17.4 million at the purchase completion date. Refer to “Note 19. Subsequent Events”.