Leases

9 Months Ended

Apr. 02, 2021

The Company is a lessee in several operating leases related to real estate facilities for warehouse and office space.

The Company’s lease arrangements comprise operating leases with various expiration dates through 2067. The lease term includes the non-cancelable period of the lease, adjusted for options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

Operating lease costs include short-term lease costs and are shown net of immaterial sublease income. The components of lease costs and other information related to leases were as follows:


	For the Three Months Ended				For the Nine Months Ended
(Dollars in millions)	April 2, 2021		April 3, 2020		April 2, 2021		April 3, 2020
Operating lease cost	$	4	$	6	$	11	$	17
Variable lease cost	1		1		3		3
Total lease cost	$	5	$	7	$	14	$	20

Operating cash outflows from operating leases	$	5	$	4	$	14	$	13


	April 2, 2021		July 3, 2020
Weighted-average remaining lease term	7.1 years		13.2 years
Weighted-average discount rate	6.02	%	6.53	%

Right-of-use (“ROU”) assets and lease liabilities are included on the Company’s Condensed Consolidated Balance Sheets as follows:


(Dollars in millions)	Balance Sheet Location	April 2, 2021		July 3, 2020
ROU assets	Other assets, net	$	102	$	103
Current lease liabilities	Accrued expenses	$	15	$	14
Non-current lease liabilities	Other non-current liabilities	$	43	$	49

At April 2, 2021, future lease payments included in the measurement of lease liabilities were as follows (in millions):


Fiscal Year	Amount
Remainder of 2021	$	4
2022	16
2023	12
2024	7
2025	5
Thereafter	25
Total lease payments	69
Less: imputed interest	(11)
Present value of lease liabilities	$	58