Leases

9 Months Ended

Mar. 31, 2022

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 II-VI will exercise that option.

The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Leased assets are tested for impairment in the same manner as long-lived assets used in operations.

The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):


	Three Months Ended March 31, 2022		Nine months ended March 31, 2022
Finance Lease Cost
Amortization of right-of-use assets	$	417	$	1,255
Interest on lease liabilities	298		907
Total finance lease cost	$	715	$	2,162
Operating lease cost	9,240		27,635
Sublease income	—		507
Total lease cost	$	9,955	$	29,290

Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$	298	$	907
Operating cash flows from operating leases	8,899		26,565
Financing cash flows from finance leases	332		954

Weighted-Average Remaining Lease Term (in Years)
Finance leases	9.8
Operating leases	6.7

Weighted-Average Discount Rate
Finance leases	5.6 %
Operating leases	5.8 %


	Three Months Ended March 31, 2021		Nine Months Ended March 31, 2021
Finance Lease Cost
Amortization of right-of-use assets	$	417	$	1,250
Interest on lease liabilities	315		957
Total finance lease cost	$	732	$	2,207
Operating lease cost	9,212		27,147
Sublease income	368		1,103
Total lease cost	$	9,576	$	28,251

Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$	315	$	957
Operating cash flows from operating leases	9,150		26,003
Financing cash flows from finance leases	298		849

Leases

The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):


	Three Months Ended March 31, 2022		Nine months ended March 31, 2022
Finance Lease Cost
Amortization of right-of-use assets	$	417	$	1,255
Interest on lease liabilities	298		907
Total finance lease cost	$	715	$	2,162
Operating lease cost	9,240		27,635
Sublease income	—		507
Total lease cost	$	9,955	$	29,290

Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$	298	$	907
Operating cash flows from operating leases	8,899		26,565
Financing cash flows from finance leases	332		954

Weighted-Average Remaining Lease Term (in Years)
Finance leases	9.8
Operating leases	6.7

Weighted-Average Discount Rate
Finance leases	5.6 %
Operating leases	5.8 %


	Three Months Ended March 31, 2021		Nine Months Ended March 31, 2021
Finance Lease Cost
Amortization of right-of-use assets	$	417	$	1,250
Interest on lease liabilities	315		957
Total finance lease cost	$	732	$	2,207
Operating lease cost	9,212		27,147
Sublease income	368		1,103
Total lease cost	$	9,576	$	28,251

Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$	315	$	957
Operating cash flows from operating leases	9,150		26,003
Financing cash flows from finance leases	298		849