XML 26 R13.htm IDEA: XBRL DOCUMENT v3.22.2.2
Leases
 12 Months Ended
Jun. 26, 2022
Leases [Abstract]  
Leases Leases
The Company primarily leases manufacturing and office space. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."
The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's Silicon Carbide device fabrication facility in New York.
Balance Sheet
Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):
Operating Leases:June 26, 2022June 27, 2021
Right-of-use asset (1)
$48.5 $12.1 
Current lease liability (2)
4.6 4.5 
Non-current lease liability (3)
43.6 7.5 
Total operating lease liabilities48.2 12.0 
Finance Leases:
Finance lease assets (4)
$10.3 $15.5 
Current portion of finance lease liabilities0.5 5.2 
Finance lease liabilities, less current portion9.6 10.0 
Total finance lease liabilities10.1 15.2 
(1) Within other assets on the consolidated balance sheets.
(2) Within other current liabilities on the consolidated balance sheets.
(3) Within other long-term liabilities on the consolidated balance sheets.
(4) Within property and equipment, net on the consolidated balance sheets.
Statement of Operations
Operating lease expense was $8.1 million, $5.5 million and $5.4 million in fiscal 2022, 2021 and 2020, respectively.
Short-term lease expense was $0.8 million in fiscal 2022. In fiscal 2021 and 2020, short-term lease expense was immaterial.
Finance lease amortization was $1.2 million, $1.0 million and $0.7 million, and interest expense was $0.3 million, $0.3 million and $0.2 million, in fiscal 2022, 2021 and 2020, respectively.
Cash Flows
Cash flow information consisted of the following (1):
Fiscal Years Ended
(in millions of U.S. Dollars)June 26, 2022June 27, 2021June 28, 2020
Cash used in operating activities:
Cash paid for operating leases$8.1 $5.7 $5.5 
Cash paid for interest portion of financing leases0.3 0.3 0.1 
Cash used in financing activities:
Cash paid for principal portion of finance leases0.5 0.4 0.8 
(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.
Lease Liability Maturities
Maturities of operating and finance lease liabilities as of June 26, 2022 were as follows (in millions of U.S. Dollars):
Fiscal Year EndingOperating LeasesFinance LeasesTotal
June 25, 2023$5.5 $0.7 $6.2 
June 30, 20247.3 0.7 8.0 
June 29, 20257.9 0.7 8.6 
June 28, 20267.8 0.7 8.5 
June 27, 20276.8 0.4 7.2 
Thereafter53.8 14.2 68.0 
Total lease payments89.1 17.4 106.5 
Future tenant improvement allowances(19.0)— (19.0)
Imputed lease interest(21.9)(7.3)(29.2)
Total lease liabilities$48.2 $10.1 $58.3 
Supplemental Disclosures
Operating LeasesFinance Leases
Weighted average remaining lease term (in months) (1)
134562
Weighted average discount rate (2)
4.22 %2.68 %
(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 51 months.
(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.33%.
Lease Income
As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leases to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term is 24 months and expires on February 28, 2023. Subject to certain provisions in the LED RELA, CreeLED may terminate its rights or a portion of its rights under the agreement at any time with sixty days written notice. A notice of thirty days is permitted under certain circumstances as defined in the agreement. The agreement does not contain any renewal provisions.
The Company recognized lease income of $3.6 million and $1.2 million for the fiscal years ended June 26, 2022 and June 27, 2021, respectively. The Company did not recognize any variable lease income for the fiscal year ended June 28, 2020.
Total future minimum rental income relating to the LED RELA is $2.4 million, all of which is expected to occur in the fiscal year ending June 25, 2023.
Leases Leases
The Company primarily leases manufacturing and office space. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."
The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's Silicon Carbide device fabrication facility in New York.
Balance Sheet
Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):
Operating Leases:June 26, 2022June 27, 2021
Right-of-use asset (1)
$48.5 $12.1 
Current lease liability (2)
4.6 4.5 
Non-current lease liability (3)
43.6 7.5 
Total operating lease liabilities48.2 12.0 
Finance Leases:
Finance lease assets (4)
$10.3 $15.5 
Current portion of finance lease liabilities0.5 5.2 
Finance lease liabilities, less current portion9.6 10.0 
Total finance lease liabilities10.1 15.2 
(1) Within other assets on the consolidated balance sheets.
(2) Within other current liabilities on the consolidated balance sheets.
(3) Within other long-term liabilities on the consolidated balance sheets.
(4) Within property and equipment, net on the consolidated balance sheets.
Statement of Operations
Operating lease expense was $8.1 million, $5.5 million and $5.4 million in fiscal 2022, 2021 and 2020, respectively.
Short-term lease expense was $0.8 million in fiscal 2022. In fiscal 2021 and 2020, short-term lease expense was immaterial.
Finance lease amortization was $1.2 million, $1.0 million and $0.7 million, and interest expense was $0.3 million, $0.3 million and $0.2 million, in fiscal 2022, 2021 and 2020, respectively.
Cash Flows
Cash flow information consisted of the following (1):
Fiscal Years Ended
(in millions of U.S. Dollars)June 26, 2022June 27, 2021June 28, 2020
Cash used in operating activities:
Cash paid for operating leases$8.1 $5.7 $5.5 
Cash paid for interest portion of financing leases0.3 0.3 0.1 
Cash used in financing activities:
Cash paid for principal portion of finance leases0.5 0.4 0.8 
(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.
Lease Liability Maturities
Maturities of operating and finance lease liabilities as of June 26, 2022 were as follows (in millions of U.S. Dollars):
Fiscal Year EndingOperating LeasesFinance LeasesTotal
June 25, 2023$5.5 $0.7 $6.2 
June 30, 20247.3 0.7 8.0 
June 29, 20257.9 0.7 8.6 
June 28, 20267.8 0.7 8.5 
June 27, 20276.8 0.4 7.2 
Thereafter53.8 14.2 68.0 
Total lease payments89.1 17.4 106.5 
Future tenant improvement allowances(19.0)— (19.0)
Imputed lease interest(21.9)(7.3)(29.2)
Total lease liabilities$48.2 $10.1 $58.3 
Supplemental Disclosures
Operating LeasesFinance Leases
Weighted average remaining lease term (in months) (1)
134562
Weighted average discount rate (2)
4.22 %2.68 %
(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 51 months.
(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.33%.
Lease Income
As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leases to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term is 24 months and expires on February 28, 2023. Subject to certain provisions in the LED RELA, CreeLED may terminate its rights or a portion of its rights under the agreement at any time with sixty days written notice. A notice of thirty days is permitted under certain circumstances as defined in the agreement. The agreement does not contain any renewal provisions.
The Company recognized lease income of $3.6 million and $1.2 million for the fiscal years ended June 26, 2022 and June 27, 2021, respectively. The Company did not recognize any variable lease income for the fiscal year ended June 28, 2020.
Total future minimum rental income relating to the LED RELA is $2.4 million, all of which is expected to occur in the fiscal year ending June 25, 2023.
Leases Leases
The Company primarily leases manufacturing and office space. The Company also has a number of bulk gas leases. Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, as well as non-lease components incurred with respect to actual terms rather than contractually fixed amounts. For details on the Company's lease policies, see the significant accounting policy disclosures in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies."
The Company's finance lease obligations primarily relate to contract manufacturing space in Malaysia and a 49-year ground lease on the Company's Silicon Carbide device fabrication facility in New York.
Balance Sheet
Lease assets and liabilities and the corresponding balance sheet classifications are as follows (in millions of U.S. Dollars):
Operating Leases:June 26, 2022June 27, 2021
Right-of-use asset (1)
$48.5 $12.1 
Current lease liability (2)
4.6 4.5 
Non-current lease liability (3)
43.6 7.5 
Total operating lease liabilities48.2 12.0 
Finance Leases:
Finance lease assets (4)
$10.3 $15.5 
Current portion of finance lease liabilities0.5 5.2 
Finance lease liabilities, less current portion9.6 10.0 
Total finance lease liabilities10.1 15.2 
(1) Within other assets on the consolidated balance sheets.
(2) Within other current liabilities on the consolidated balance sheets.
(3) Within other long-term liabilities on the consolidated balance sheets.
(4) Within property and equipment, net on the consolidated balance sheets.
Statement of Operations
Operating lease expense was $8.1 million, $5.5 million and $5.4 million in fiscal 2022, 2021 and 2020, respectively.
Short-term lease expense was $0.8 million in fiscal 2022. In fiscal 2021 and 2020, short-term lease expense was immaterial.
Finance lease amortization was $1.2 million, $1.0 million and $0.7 million, and interest expense was $0.3 million, $0.3 million and $0.2 million, in fiscal 2022, 2021 and 2020, respectively.
Cash Flows
Cash flow information consisted of the following (1):
Fiscal Years Ended
(in millions of U.S. Dollars)June 26, 2022June 27, 2021June 28, 2020
Cash used in operating activities:
Cash paid for operating leases$8.1 $5.7 $5.5 
Cash paid for interest portion of financing leases0.3 0.3 0.1 
Cash used in financing activities:
Cash paid for principal portion of finance leases0.5 0.4 0.8 
(1) See Note 6, "Financial Statement Details," for non-cash activities related to leases.
Lease Liability Maturities
Maturities of operating and finance lease liabilities as of June 26, 2022 were as follows (in millions of U.S. Dollars):
Fiscal Year EndingOperating LeasesFinance LeasesTotal
June 25, 2023$5.5 $0.7 $6.2 
June 30, 20247.3 0.7 8.0 
June 29, 20257.9 0.7 8.6 
June 28, 20267.8 0.7 8.5 
June 27, 20276.8 0.4 7.2 
Thereafter53.8 14.2 68.0 
Total lease payments89.1 17.4 106.5 
Future tenant improvement allowances(19.0)— (19.0)
Imputed lease interest(21.9)(7.3)(29.2)
Total lease liabilities$48.2 $10.1 $58.3 
Supplemental Disclosures
Operating LeasesFinance Leases
Weighted average remaining lease term (in months) (1)
134562
Weighted average discount rate (2)
4.22 %2.68 %
(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 51 months.
(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.33%.
Lease Income
As mentioned in Note 3, "Discontinued Operations," on March 1, 2021 and in connection with the LED Business Divestiture, the Company entered into the LED RELA pursuant to which the Company leases to CreeLED approximately 58,000 square feet of the Company’s property and certain facilities in Durham, North Carolina for a total of $3.6 million per year. The lease term is 24 months and expires on February 28, 2023. Subject to certain provisions in the LED RELA, CreeLED may terminate its rights or a portion of its rights under the agreement at any time with sixty days written notice. A notice of thirty days is permitted under certain circumstances as defined in the agreement. The agreement does not contain any renewal provisions.
The Company recognized lease income of $3.6 million and $1.2 million for the fiscal years ended June 26, 2022 and June 27, 2021, respectively. The Company did not recognize any variable lease income for the fiscal year ended June 28, 2020.
Total future minimum rental income relating to the LED RELA is $2.4 million, all of which is expected to occur in the fiscal year ending June 25, 2023.