WOLFSPEED, INC.WOLF
WOLFSPEED, INC. Leases Disclosure
Leases
The Company primarily leases manufacturing and office spaces and bulk gas equipment. 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 are 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 29, 2025 | June 30, 2024 | |||||||||
Right-of-use assets (1) | $123.1 | $99.2 | |||||||||
Current lease liability (2) | 9.9 | 6.9 | |||||||||
Non-current lease liability (3) | 139.5 | 114.0 | |||||||||
| Total operating lease liabilities | $149.4 | $120.9 | |||||||||
| Finance Leases: | |||||||||||
Finance lease assets (4) | $8.3 | $9.1 | |||||||||
| Current portion of finance lease liabilities | 0.5 | 0.5 | |||||||||
| Finance lease liabilities, less current portion | 8.4 | 8.9 | |||||||||
| Total finance lease liabilities | $8.9 | $9.4 | |||||||||
(1) Within on the consolidated balance sheets.
(2) Within on the consolidated balance sheets.
(3) Within on the consolidated balance sheets.
(4) Within on the consolidated balance sheets.
Statement of Operations
| Fiscal Years Ended | |||||||||||||||||
| (in millions of U.S. Dollars) | June 29, 2025 | June 30, 2024 | June 25, 2023 | ||||||||||||||
| Operating lease expense | $16.7 | $13.9 | $9.3 | ||||||||||||||
| Finance lease amortization | 0.8 | 0.8 | 0.8 | ||||||||||||||
Interest expense for finance leases was immaterial for all periods presented.
Cash Flows
Cash flow information consisted of the following (1):
| Fiscal Years Ended | |||||||||||||||||
| (in millions of U.S. Dollars) | June 29, 2025 | June 30, 2024 | June 25, 2023 | ||||||||||||||
| Cash (used in) provided by operating activities: | |||||||||||||||||
| Cash paid for operating leases | ($15.5) | ($12.6) | ($5.1) | ||||||||||||||
| Cash received for tenant allowance on operating leases | 1.8 | 0.4 | 17.8 | ||||||||||||||
| Cash paid for interest portion of financing leases | (0.2) | (0.3) | (0.3) | ||||||||||||||
| Cash used in financing activities: | |||||||||||||||||
| Cash paid for principal portion of finance leases | (0.5) | (0.4) | (0.5) | ||||||||||||||
(1) See "Statements of Cash Flows - non-cash activities" in Note 2, "Basis of Presentation and Summary of Significant Accounting Policies," for non-cash activities related to leases.
Lease Liability Maturities
Maturities of operating and finance lease liabilities as of June 29, 2025 were as follows (in millions of U.S. Dollars):
| Fiscal Year Ending | Operating Leases | Finance Leases | Total | ||||||||
| June 28, 2026 | $16.5 | $0.8 | $17.3 | ||||||||
| June 27, 2027 | 16.4 | 0.5 | 16.9 | ||||||||
| June 25, 2028 | 16.2 | 0.2 | 16.4 | ||||||||
| June 24, 2029 | 16.3 | 0.2 | 16.5 | ||||||||
| June 30, 2030 | 15.8 | 0.2 | 16.0 | ||||||||
| Thereafter | 118.5 | 13.6 | 132.1 | ||||||||
| Total lease payments | 199.7 | 15.5 | 215.2 | ||||||||
| Future tenant improvement allowances | — | — | — | ||||||||
| Imputed lease interest | (50.3) | (6.6) | (56.9) | ||||||||
| Total lease liabilities | $149.4 | $8.9 | $158.3 | ||||||||
Supplemental Disclosures
| Operating Leases | Finance Leases | |||||||
Weighted average remaining lease term (in months) (1) | 151 | 484 | ||||||
Weighted average discount rate (2) | 4.67 | % | 2.65 | % | ||||
(1) Weighted average remaining lease term of finance leases without the 49-year ground lease is 17 months.
(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.87%.
As of June 29, 2025, the Company has entered into an agreement containing operating leases for bulk gas equipment. This arrangement contains approximately $35.0 million of additional ROU liability obligations that have not yet commenced. The Company expects these operating leases will commence in future periods with initial lease terms of 15 years.
Lease Income
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 $0.7 million, $1.0 million and $2.5 million for the fiscal years ended June 29, 2025, June 30, 2024 and June 25, 2023, respectively.
The Company did not recognize any variable lease income for the fiscal years ended June 29, 2025, June 30, 2024 and June 25, 2023.
Lease Impairment
For the fiscal year ended June 29, 2025, the Company recorded $4.8 million of non-cash impairment charges for the abandonment of ROU assets as a result of the ongoing factory consolidation and optimization initiatives. The impairment of the ROU assets is included in "restructuring and other expenses" within the accompanying consolidated statement of operations. Refer to Note 16 - "Restructuring" for additional details.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 26, 2025 | Showing above |
| 2024 | Aug 22, 2024 | |
| 2023 | Aug 23, 2023 | |
| 2022 | Aug 22, 2022 | |
| 2021 | Aug 18, 2021 | |
| 2020 | Aug 19, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.