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Balance Sheet and Other Details

12 Months Ended

Jun. 27, 2020

Note 6. Balance Sheet and Other Details

Contract Balances

Unbilled Receivables: The Company records a receivable when an unconditional right to consideration exists and transfer of control has occurred, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of customer invoicing. Payment terms vary based on product or service offerings and payment is generally required within 30 to 90 days from date of invoicing. Certain performance obligations may require payment before delivery of the service to the customer.

Contract assets: A Contract Asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract Assets include fixed fee professional services, where the transfer of services has occurred in advance of the Company's right to invoice. Contract Assets, included in accounts receivable, net, on the Consolidated Balance Sheets, are not material to the Consolidated Financial Statements. Contract Asset balances will fluctuate based upon the timing of transfer of services, billings and customers’ acceptance of contractual milestones.

Gross receivables include both billed and Unbilled Receivables/Contract Assets. As of June 27, 2020 and June 29, 2019, the Company had total unbilled receivables (Unbilled Receivables/Contract Assets) of $3.8 million and $11.5 million, respectively

Deferred revenue: Deferred revenue consists of contract liabilities primarily related to support, solution deployment services, software maintenance, product, professional services, and training when the Company has a right to invoice or payments have been received and transfer of control has not occurred. Revenue is recognized on these items when the revenue recognition criteria are met, generally resulting in ratable recognition over the contract term. Contract liabilities are included in other current liabilities on the consolidated balance sheets.

The Company also has short-term and long-term deferred revenues related to undelivered hardware and professional services, consisting of installations and consulting engagements, which are recognized as the Company's performance obligations under the contract are completed and accepted by the customer.

The following tables summarize the activity related to deferred revenue, for the year ended June 27, 2020 (in millions):



	June 27, 2020
Deferred revenue:
Balance at beginning of period	$	68.5
Revenue deferrals for new contracts ⁽¹⁾	107.5
Revenue recognized during the period ⁽²⁾	(101.4		)
Balance at end of period	$	74.6

Short-term deferred revenue	$	54.6
Long-term deferred revenue	$	20.0


(1)	Included in these amounts is the impact from foreign currency exchange rate fluctuations.


(2)	Revenue recognized during the period represents releases from the balance at the beginning of the period as well as releases from the following period quarter-end deferrals.

Remaining performance obligations: Remaining performance obligations represent the aggregate amount of the transaction price allocated to performance obligations not delivered or are incomplete, as of June 27, 2020. Remaining performance obligations include deferred revenue plus unbilled amounts not yet recorded. The aggregate amount of the transaction price allocated to remaining performance obligations does not include amounts owed under cancelable contracts where there is no substantive termination penalty.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidation, adjustments for revenue that has not materialized, and adjustments for currency.

The value of the transaction price allocated to remaining performance obligations as of June 27, 2020, was $204.6 million. The Company expects to recognize 87% of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

Accounts Receivable Allowances

The table below presents the activities and balances for allowance for doubtful accounts, as follows (in millions):



	Balance at Beginning of Period		Acquisitions (1)		Charged to Costs and Expenses			Deduction (2)			Balance at End of Period
Year Ended June 27, 2020	$	2.0	$	—	$	2.0		$	(1.0	)	$	3.0
Year Ended June 29, 2019	2.4		—		1.4			(1.8		)	2.0
Year Ended June 30, 2018	1.6		0.7		(0.4		)	0.5			2.4


(1)	See “Note 5. Acquisitions” of the Notes to Consolidated Financial Statements for detail of acquisition.


(2)	Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries.

Inventories, Net

The following table presents the components of inventories, net, as follows (in millions):



	June 27, 2020		June 29, 2019
Finished goods	$	30.0	$	36.7
Work in process	22.5		26.5
Raw materials	30.8		39.5
Inventories, net	$	83.3	$	102.7

Prepayments and Other Current Assets

The following table presents the components of prepayments and other current assets, as follows (in millions):



	June 27, 2020		June 29, 2019
Prepayments	$	10.9	$	14.2
Assets held for sale	2.5		2.5
Advances to contract manufacturers	7.3		5.1
Refundable income taxes	10.8		8.9
Transaction tax receivables	10.6		11.8
Other current assets	8.7		7.4
Prepayments and other current assets	$	50.8	$	49.9

Property, Plant and Equipment, net

The following table presents the components of property, plant and equipment, net, as follows (in millions):



	June 27, 2020			June 29, 2019
Land	$	16.8		$	20.8
Buildings and improvements	22.9			36.9
Machinery and equipment	298.5			280.0
Furniture, fixtures, software and office equipment	74.3			103.5
Leasehold improvements	66.8			56.8
Construction in progress	15.6			31.1
Property, plant and equipment, gross	494.9			529.1
Less: Accumulated depreciation and amortization	(322.4		)	(349.2		)
Property, plant and equipment, net	$	172.5		$	179.9

Other current liabilities

The following table presents the components of other current liabilities, as follows (in millions):



	June 27, 2020		June 29, 2019
Customer prepayments	$	0.5	$	30.2
Restructuring accrual	6.5		8.6
Income tax payable	10.7		8.5
Warranty accrual	4.6		4.7
Transaction tax payable	3.2		3.8
Operating lease liabilities (Note 12)	11.7		—
Foreign exchange forward contracts liability	1.5		4.0
Other	9.7		12.6
Other current liabilities	$	48.4	$	72.4

Other Non-current Liabilities

The following table presents the components of other non-current liabilities, as follows (in millions):



	June 27, 2020		June 29, 2019
Pension and post-employment benefits	$	102.7	$	103.2
Deferred tax liability	23.9		14.6
Financing obligation	16.2		25.5
Fair value of contingent consideration ⁽¹⁾	9.4		37.7
Long-term deferred revenue	20.0		13.2
Operating lease liabilities (Note 12)	28.1		—
Uncertain tax position	11.6		13.6
Other	19.3		18.7
Other non-current liabilities	$	231.2	$	226.5


(1)	See “Note 5. Acquisitions” and “Note 7. Investments and Forward Contracts” of the Notes to the Company’s Consolidated Financial Statements for more detail.

Interest Income and Other Income, net

The following table presents the components of interest income and other income, net, as follows (in millions):



	Years Ended
	June 27, 2020			June 29, 2019			June 30, 2018
Interest income	$	7.1		$	8.1		$	16.0
Foreign exchange gains (loss), net	2.1			(2.9		)	(1.3		)
Loss on extinguishment of debt ⁽¹⁾	—			—			(5.0		)
Other income, net	0.5			1.5			0.1
Loss on sale of investments	(0.1		)	(0.5		)	(0.1		)
Interest income and other income, net	$	9.6		$	6.2		$	9.7

⁽¹⁾

In connection with the debt extinguishment, a loss of $5.0 million was recognized in fiscal 2018. Refer to “Note 11. Debt” for more information.