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Leases

6 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

The Company primarily leases manufacturing and office spaces. 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.

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:			December 31, 2023						June 25, 2023
Right-of-use asset (1)			$95.4						$98.0
Current lease liability (2)			6.6						6.4
Non-current lease liability (3)			111.0						112.0
Total operating lease liabilities			$117.6						$118.4
Finance Leases:
Finance lease assets (4)			$9.2						$9.5
Current portion of finance lease liabilities			0.4						0.4
Finance lease liabilities, less current portion			9.0						9.2
Total finance lease liabilities			$9.4						$9.6

(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 $3.9 million and $7.2 million for the three and six months ended December 31, 2023, respectively, and $2.0 million and $3.8 million for the three and six months ended December 25, 2022, respectively.

Finance lease amortization was $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively, and $0.2 million and $0.4 million for the three and six months ended December 25, 2022, respectively. Interest expense for all periods presented was immaterial.

Cash Flows

Cash flow information consisted of the following (1):

			Six months ended
(in millions of U.S. Dollars)			December 31, 2023						December 25, 2022
Cash (used in) provided by operating activities from continuing operations:
Cash paid for operating leases			($5.6)						($2.1)
Cash received for tenant allowance on operating lease			0.4						3.1
Cash paid for interest portion of financing leases			(0.1)						(0.1)
Cash used in financing activities:
Cash paid for principal portion of finance leases			(0.3)						(0.3)

(1) See Note 5, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of December 31, 2023 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending			Operating Leases			Finance Leases			Total
June 30, 2024 (remainder of fiscal 2024)			$7.1			$0.3			$7.4
June 29, 2025			13.3			0.7			14.0
June 28, 2026			13.0			0.7			13.7
June 27, 2027			11.9			0.4			12.3
June 25, 2028			11.5			0.2			11.7
Thereafter			104.3			14.1			118.4
Total lease payments			161.1			16.4			177.5
Future tenant improvement allowances			(4.7)			—			(4.7)
Imputed lease interest			(38.8)			(7.0)			(45.8)
Total lease liabilities			$117.6			$9.4			$127.0

Supplemental Disclosures

			Operating Leases			Finance Leases
Weighted average remaining lease term (in months) (1)			153			479
Weighted average discount rate (2)			4.35		%	2.65		%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 35 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.40%.

Lease Income

On December 1, 2023 and in connection with the RF Business Divestiture discussed in Note 2, “Discontinued Operations,” the Company entered into the RF RELA pursuant to which the Company leases to MACOM approximately 25,659 square feet of its property and certain facilities in the Research Triangle Park, North Carolina for a total of $0.7 million per year. The lease term is the earlier of (i) 24 full fiscal months following the RF Closing or (ii) the date on which the Company and MACOM enter into the RTP Fab Lease Agreement. The Company in its sole discretion may extend the term for two additional periods of 12 months by providing notice to MACOM at least six months prior to the last day of the then-current term.

Additionally, as mentioned in Note 2, "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 leased 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 was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively. The Company recognized lease income of $0.9 million and $1.8 million for the three and six months ended December 25, 2022, respectively.

Leases

Leases

The Company primarily leases manufacturing and office spaces. 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.

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:			December 31, 2023						June 25, 2023
Right-of-use asset (1)			$95.4						$98.0
Current lease liability (2)			6.6						6.4
Non-current lease liability (3)			111.0						112.0
Total operating lease liabilities			$117.6						$118.4
Finance Leases:
Finance lease assets (4)			$9.2						$9.5
Current portion of finance lease liabilities			0.4						0.4
Finance lease liabilities, less current portion			9.0						9.2
Total finance lease liabilities			$9.4						$9.6

(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 $3.9 million and $7.2 million for the three and six months ended December 31, 2023, respectively, and $2.0 million and $3.8 million for the three and six months ended December 25, 2022, respectively.

Finance lease amortization was $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively, and $0.2 million and $0.4 million for the three and six months ended December 25, 2022, respectively. Interest expense for all periods presented was immaterial.

Cash Flows

Cash flow information consisted of the following (1):

			Six months ended
(in millions of U.S. Dollars)			December 31, 2023						December 25, 2022
Cash (used in) provided by operating activities from continuing operations:
Cash paid for operating leases			($5.6)						($2.1)
Cash received for tenant allowance on operating lease			0.4						3.1
Cash paid for interest portion of financing leases			(0.1)						(0.1)
Cash used in financing activities:
Cash paid for principal portion of finance leases			(0.3)						(0.3)

(1) See Note 5, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of December 31, 2023 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending			Operating Leases			Finance Leases			Total
June 30, 2024 (remainder of fiscal 2024)			$7.1			$0.3			$7.4
June 29, 2025			13.3			0.7			14.0
June 28, 2026			13.0			0.7			13.7
June 27, 2027			11.9			0.4			12.3
June 25, 2028			11.5			0.2			11.7
Thereafter			104.3			14.1			118.4
Total lease payments			161.1			16.4			177.5
Future tenant improvement allowances			(4.7)			—			(4.7)
Imputed lease interest			(38.8)			(7.0)			(45.8)
Total lease liabilities			$117.6			$9.4			$127.0

Supplemental Disclosures

			Operating Leases			Finance Leases
Weighted average remaining lease term (in months) (1)			153			479
Weighted average discount rate (2)			4.35		%	2.65		%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 35 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.40%.

Lease Income

On December 1, 2023 and in connection with the RF Business Divestiture discussed in Note 2, “Discontinued Operations,” the Company entered into the RF RELA pursuant to which the Company leases to MACOM approximately 25,659 square feet of its property and certain facilities in the Research Triangle Park, North Carolina for a total of $0.7 million per year. The lease term is the earlier of (i) 24 full fiscal months following the RF Closing or (ii) the date on which the Company and MACOM enter into the RTP Fab Lease Agreement. The Company in its sole discretion may extend the term for two additional periods of 12 months by providing notice to MACOM at least six months prior to the last day of the then-current term.

Additionally, as mentioned in Note 2, "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 leased 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 was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively. The Company recognized lease income of $0.9 million and $1.8 million for the three and six months ended December 25, 2022, respectively.

Leases

Leases

The Company primarily leases manufacturing and office spaces. 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.

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:			December 31, 2023						June 25, 2023
Right-of-use asset (1)			$95.4						$98.0
Current lease liability (2)			6.6						6.4
Non-current lease liability (3)			111.0						112.0
Total operating lease liabilities			$117.6						$118.4
Finance Leases:
Finance lease assets (4)			$9.2						$9.5
Current portion of finance lease liabilities			0.4						0.4
Finance lease liabilities, less current portion			9.0						9.2
Total finance lease liabilities			$9.4						$9.6

(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 $3.9 million and $7.2 million for the three and six months ended December 31, 2023, respectively, and $2.0 million and $3.8 million for the three and six months ended December 25, 2022, respectively.

Finance lease amortization was $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively, and $0.2 million and $0.4 million for the three and six months ended December 25, 2022, respectively. Interest expense for all periods presented was immaterial.

Cash Flows

Cash flow information consisted of the following (1):

			Six months ended
(in millions of U.S. Dollars)			December 31, 2023						December 25, 2022
Cash (used in) provided by operating activities from continuing operations:
Cash paid for operating leases			($5.6)						($2.1)
Cash received for tenant allowance on operating lease			0.4						3.1
Cash paid for interest portion of financing leases			(0.1)						(0.1)
Cash used in financing activities:
Cash paid for principal portion of finance leases			(0.3)						(0.3)

(1) See Note 5, "Financial Statement Details," for non-cash activities related to leases.

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of December 31, 2023 were as follows (in millions of U.S. Dollars):

Fiscal Year Ending			Operating Leases			Finance Leases			Total
June 30, 2024 (remainder of fiscal 2024)			$7.1			$0.3			$7.4
June 29, 2025			13.3			0.7			14.0
June 28, 2026			13.0			0.7			13.7
June 27, 2027			11.9			0.4			12.3
June 25, 2028			11.5			0.2			11.7
Thereafter			104.3			14.1			118.4
Total lease payments			161.1			16.4			177.5
Future tenant improvement allowances			(4.7)			—			(4.7)
Imputed lease interest			(38.8)			(7.0)			(45.8)
Total lease liabilities			$117.6			$9.4			$127.0

Supplemental Disclosures

			Operating Leases			Finance Leases
Weighted average remaining lease term (in months) (1)			153			479
Weighted average discount rate (2)			4.35		%	2.65		%

(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 35 months.

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.40%.

Lease Income

On December 1, 2023 and in connection with the RF Business Divestiture discussed in Note 2, “Discontinued Operations,” the Company entered into the RF RELA pursuant to which the Company leases to MACOM approximately 25,659 square feet of its property and certain facilities in the Research Triangle Park, North Carolina for a total of $0.7 million per year. The lease term is the earlier of (i) 24 full fiscal months following the RF Closing or (ii) the date on which the Company and MACOM enter into the RTP Fab Lease Agreement. The Company in its sole discretion may extend the term for two additional periods of 12 months by providing notice to MACOM at least six months prior to the last day of the then-current term.

Additionally, as mentioned in Note 2, "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 leased 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 was 24 months and expired on February 26, 2023.

In addition, the Company leases space to a third party at one of its owned facilities.

The Company recognized lease income of $0.2 million and $0.4 million for the three and six months ended December 31, 2023, respectively. The Company recognized lease income of $0.9 million and $1.8 million for the three and six months ended December 25, 2022, respectively.

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