FINANCING OBLIGATION

6 Months Ended

Mar. 29, 2024

We are party to a power purchase agreement for the use of electric power and thermal energy producing systems at our fabrication facility in Lowell, Massachusetts. These systems are expected to reduce our consumption of energy while delivering sustainable, resilient energy for heating and cooling. We do not own these systems; however, we control the use of the assets during operation. As of March 29, 2024 and September 29, 2023, the net book value of the systems in Property and equipment, net was $8.5 million and $8.9 million, respectively, and the corresponding liability was $9.4 million and $9.6 million, respectively, primarily classified in Financing obligation on our condensed consolidated balance sheet. The initial financing obligation was calculated based on future fixed payments allocated to the power generator of $16.8 million over the 15-year term, discounted at an implied discount rate of 7.4%, and the remaining future minimum payments are for power purchases. As of March 29, 2024 and September 29, 2023, we have $24.8 million and $25.5 million, respectively, in remaining fixed payments over a 14-year term associated with the power purchase agreement, of which $15.4 million and $15.9 million, respectively, is included in our consolidated balance sheets on a discounted basis.

As of March 29, 2024, expected future minimum payments for the financing obligation were as follows (in thousands):


Fiscal year ending:	Amount
2024	$	481
2025	982
2026	1,007
2027	1,031
2028	1,057
Thereafter	10,858
Total payments	$	15,416
Less: interest	5,980
Present value of liabilities	$	9,436