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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2021
 OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
 Commission File Number 001-36861
Lumentum Holdings Inc.
(Exact name of Registrant as specified in its charter)
Delaware 47-3108385
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
1001 Ridder Park Drive, San Jose, California 95131
(Address of principal executive offices including Zip code)
(408) 546-5483
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value of $0.001 per shareLITENasdaq Global Select Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x        No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No x
As of October 29, 2021, the Registrant had 72.3 million shares of common stock outstanding.




TABLE OF CONTENTS
Page

1


PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
Three Months Ended
 October 2, 2021September 26, 2020
Net revenue$448.4 $452.4 
Cost of sales200.4 231.7 
Amortization of acquired developed intangibles 15.8 15.0 
Gross profit232.2 205.7 
Operating expenses:
    Research and development54.1 50.4 
    Selling, general and administrative63.3 56.3 
    Restructuring and related charges(1.1) 
Total operating expenses116.3 106.7 
Income from operations115.9 99.0 
Interest expense(16.9)(16.0)
Other income, net0.6 0.6 
Income before income taxes99.6 83.6 
Provision for income taxes18.1 16.5 
Net income$81.5 $67.1 
Net income per share:
    Basic$1.12 $0.89 
    Diluted$1.08 $0.86 
Shares used to compute net income per share:
    Basic 72.7 75.3 
    Diluted75.4 78.2 
    

See accompanying Notes to Condensed Consolidated Financial Statements.
2

LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(Unaudited)

 Three Months Ended
 October 2, 2021September 26, 2020
Net income$81.5 $67.1 
Other comprehensive income (loss), net of tax:
Net change in unrealized gain (loss) on available-for-sale securities0.3 (1.5)
Other comprehensive income (loss), net of tax0.3 (1.5)
Comprehensive income, net of tax
$81.8 $65.6 

See accompanying Notes to Condensed Consolidated Financial Statements.

3

LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
(Unaudited)


October 2, 2021July 3, 2021
ASSETS  
Current assets: 
Cash and cash equivalents$611.0 $774.3 
Short-term investments1,273.6 1,171.7 
Accounts receivable, net 263.2 212.8 
Inventories207.0 196.4 
Prepayments and other current assets68.2 81.6 
Total current assets2,423.0 2,436.8 
Property, plant and equipment, net353.2 361.1 
Operating lease right-of-use assets, net75.2 67.4 
Goodwill368.9 368.9 
Other intangible assets, net219.8 241.2 
Deferred tax asset72.9 72.9 
Other non-current assets6.0 3.3 
Total assets$3,519.0 $3,551.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$101.6 $116.9 
Accrued payroll and related expenses42.9 54.3 
Accrued expenses40.4 33.1 
Convertible notes, current395.8 390.7 
Operating lease liabilities, current11.7 11.8 
Other current liabilities19.3 57.8 
Total current liabilities611.7 664.6 
Convertible notes, non-current800.0 789.8 
Operating lease liabilities, non-current57.5 47.6 
Deferred tax liability35.5 35.9 
Other non-current liabilities42.9 40.9 
Total liabilities1,547.6 1,578.8 
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.001 par value, 990 authorized shares, 72.3 and 73.0 shares issued and outstanding as of October 2, 2021 and July 3, 2021, respectively
0.1 0.1 
Additional paid-in capital1,752.1 1,743.6 
Retained earnings210.7 220.9 
Accumulated other comprehensive income8.5 8.2 
Total stockholders’ equity1,971.4 1,972.8 
Total liabilities and stockholders’ equity$3,519.0 $3,551.6 
 
See accompanying Notes to Condensed Consolidated Financial Statements.

4

LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions)
(Unaudited)

Common StockAdditional Paid-In CapitalAccumulated
Other Comprehensive Income
Total Stockholders' Equity
SharesAmountRetained Earnings
Balance as of July 3, 202173.0 $0.1 $1,743.6 $220.9 $8.2 $1,972.8 
Net income— — — 81.5 — 81.5 
Other comprehensive income— — — — 0.3 0.3 
Issuance of shares in connection with vesting of restricted stock units and performance stock units0.6 — — — — — 
Withholding taxes related to net share settlement of restricted stock units
(0.2)— (16.6)— — (16.6)
Repurchases of common stock(1.1)(91.7)(91.7)
Stock-based compensation— — 25.1 — — 25.1 
Balance as of October 2, 202172.3 $0.1 $1,752.1 $210.7 $8.5 $1,971.4 

Common StockAdditional Paid-In CapitalAccumulated
Other Comprehensive Income
Total Stockholders' Equity
SharesAmountRetained Earnings
Balance as of June 27, 202075.1 $0.1 $1,676.6 $64.6 $7.9 $1,749.2 
Net income— — — 67.1 — 67.1 
Other comprehensive loss— — — — (1.5)(1.5)
Issuance of shares in connection with vesting of restricted stock units and performance stock units0.6 — — — — — 
Withholding taxes related to net share settlement of restricted stock units
(0.2)— (19.1)— — (19.1)
Exercise of stock options— — 0.1 — — 0.1 
Stock-based compensation— — 20.3 — — 20.3 
Balance as of September 26, 202075.5 $0.1 $1,677.9 $131.7 $6.4 $1,816.1 


See accompanying Notes to Condensed Consolidated Financial Statements.

5

LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
October 2, 2021September 26, 2020
OPERATING ACTIVITIES:
Net income$81.5 $67.1 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense20.4 23.8 
Stock-based compensation 24.8 19.5 
Amortization of acquired intangibles21.4 20.7 
(Gain) loss on sales and dispositions of property, plant and equipment(5.3)0.9 
Amortization of debt discount and debt issuance costs15.3 14.4 
Other non-cash expense3.3 1.0 
Changes in operating assets and liabilities:
Accounts receivable(50.4)(30.3)
Inventories(10.3)(22.9)
Operating lease right-of-use assets, net(7.8)4.0 
Prepayments and other current and non-currents assets(3.9)(7.7)
Income taxes, net(18.1)14.4 
Accounts payable(10.5)(5.4)
Accrued payroll and related expenses(11.4)(9.5)
Operating lease liabilities9.8 (1.6)
Accrued expenses and other current and non-current liabilities3.1 16.3 
Net cash provided by operating activities61.9 104.7 
INVESTING ACTIVITIES:
Payments for acquisition of property, plant and equipment(17.9)(26.3)
Proceeds from sale of product lines 0.5 
Purchases of short-term investments(255.9)(491.5)
Proceeds from maturities and sales of short-term investments151.0 403.3 
Proceeds from the sales of property, plant and equipment5.9  
Net cash used in investing activities(116.9)(114.0)
FINANCING ACTIVITIES:
Repurchase of common stock(91.7) 
Payment of withholding taxes related to net share settlement of restricted stock units
(16.6)(19.1)
Principal payments on finance leases (0.2)
Proceeds from the exercise of stock options 0.1 
Net cash used in financing activities(108.3)(19.2)
Decrease in cash and cash equivalents(163.3)(28.5)
Cash and cash equivalents at beginning of period 774.3 298.0 
Cash and cash equivalents at end of period$611.0 $269.5 
Supplemental disclosure of cash flow information:
Cash paid for taxes$36.3 $2.0 
Cash paid for interest 0.6 0.6 
Supplemental disclosure of non-cash transactions:
Unpaid property, plant and equipment in accounts payable and accrued expenses$5.8 $11.1 
Repurchase of common stock pending settlement5.1  
Right-of-use assets obtained in exchange for new operating lease liabilities10.5  
See accompanying Notes to Condensed Consolidated Financial Statements.
6

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Lumentum Holdings Inc. (“we,” “us,” “our”, “Lumentum” or the “Company”) is an industry-leading provider of optical and photonic products defined by revenue and market share addressing a range of end market applications including Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”) for manufacturing, inspection and life-science applications. We seek to use our core optical and photonic technology, and our volume manufacturing capability, to expand into attractive emerging markets that benefit from advantages that optical or photonics-based solutions provide, including 3D sensing for consumer electronics and diode light sources for a variety of consumer and industrial applications. The majority of our customers tend to be original equipment manufacturers (“OEMs”) that incorporate our products into their products which then address end-market applications. For example, we sell fiber optic components that network equipment manufacturers (“NEMs”) assemble into communications networking systems, which they sell to network service providers, operators or enterprises with their own networks. Similarly, many of our customers for our Lasers products incorporate our products into tools they produce, which are used for manufacturing processes by their customers. For 3D sensing, we sell diode lasers to manufacturers of consumer electronics products for mobile, personal computing, gaming, and other applications who then integrate our devices within their products, for eventual resale to consumers and also into other industrial applications.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be different from the estimates. Operating results for the quarter ended October 2, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending July 2, 2022. In the opinion of the Company’s management, the information presented herein reflects all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position, stockholders’ equity and cash flows.
Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are inventory valuation, revenue recognition, income taxes, long-lived asset valuation and goodwill.
The COVID-19 pandemic has created and may continue to create significant uncertainty in global financial markets, which has disrupted and harmed, and may continue to disrupt and harm, our business, financial condition, and results of operations. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including but not limited to the duration and spread of the outbreak, duration of local, state and federal issued public health orders in each jurisdiction where we operate or in which our customers and suppliers operate, impact on our customers and our sales cycles, impact on our supply chain and manufacturing partners, impact on our employees and impact on regional and worldwide economies and financial markets in general, all of which are uncertain and cannot be predicted. We assessed the potential impact that this pandemic has on our estimates as of October 2, 2021 and determined that there were no material impacts.
Fiscal Years
We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal 2022 is a 52-week year ending on July 2, 2022, with the quarter ended October 2, 2021 being a 13-week quarterly period. Our fiscal 2021 was a 53-week year that ended on July 3, 2021, with the quarter ended September 26, 2020 being a 13-week quarterly period.
Principles of Consolidation
These interim unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation. 
7

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Accounting Policies
The condensed consolidated financial statements and accompanying related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended July 3, 2021. There have been no significant changes to our accounting policies during the three months ended October 2, 2021.

Note 2. Recently Issued Accounting Pronouncements
Accounting Pronouncements Recently Adopted
In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and which also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for us at the beginning of fiscal year 2022, including interim periods within that reporting period. We adopted ASU 2019-12 in our first quarter of fiscal year 2022 on a prospective basis with no material impact to our condensed consolidated financial statements.
Accounting Pronouncements Not Yet Effective
In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing the separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. ASU 2020-06 is effective for us in our first quarter of fiscal year 2023. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements.

Note 3. Earnings Per Share
The following table sets forth the computation of basic and diluted net income per share (in millions, except per share data):
 Three Months Ended
 October 2, 2021September 26, 2020
Numerator:  
Net income - basic and diluted$81.5 $67.1 
Denominator:
Weighted average common shares outstanding - basic72.7 75.3 
Effect of dilutive securities from stock-based benefit plans0.6 0.9 
Shares issuable assuming conversion of the 2024 Notes2.1 2.0 
Weighted average common shares outstanding - diluted75.4 78.2 
Net income per share:
Basic$1.12 $0.89 
Diluted$1.08 $0.86 
8

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding equity awards, assumed issuance of stock under the employee stock purchase plan, and assumed conversion of our outstanding convertible notes, all using the treasury stock method.
We have the ability and intent to settle the face value of our convertible notes in cash. Therefore, we use the treasury stock method for calculating the dilutive impact of the convertible notes. 
The 2026 Notes (as defined in Note 9) will have no impact on diluted earnings per share until the average price of our common stock exceeds the conversion price of $99.29.
The potentially dilutive shares resulting from the 2024 Notes (as defined in Note 9) were included in the calculation of diluted income per share for the three months ended October 2, 2021 and September 26, 2020, respectively, since the average price of our common stock exceeded the conversion price of $60.62 in both periods.
Anti-dilutive potential shares are excluded from the calculation of diluted earnings per share if their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive shares excluded from the calculation of diluted earnings per share were 0.4 million and 0.5 million shares for the three months ended October 2, 2021 and September 26, 2020, respectively.
9

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 4. Cash, Cash Equivalents and Short-term Investments
The following table summarizes our cash, cash equivalents and short-term investments by category for the periods presented (in millions):
Amortized
Cost
 Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
October 2, 2021:
Cash$196.1 $— $— $196.1 
Cash equivalents:
Money market funds204.7 — — 204.7 
U.S. Treasury securities210.2 — — 210.2 
Total cash and cash equivalents$611.0 $— $— $611.0 
Short-term investments:
Certificates of deposit$28.5 $ $ $28.5 
Commercial paper124.8   124.8 
Corporate debt securities671.3 0.3 (0.2)671.4 
Municipal bonds2.0   2.0 
U.S. Agency securities28.2   28.2 
U.S. Treasury securities418.6 0.1  418.7 
Total short-term investments$1,273.4 $0.4 $(0.2)$1,273.6 
July 3, 2021:
Cash$128.3 $— $— $128.3 
Cash equivalents:
Commercial paper7.5 — — 7.5 
Corporate debt securities7.0 — — 7.0 
Money market funds631.5 — — 631.5 
Total cash and cash equivalents$774.3 $— $— $774.3 
Short-term investments:
Certificates of deposit$28.5 $ $ $28.5 
Commercial paper136.7   136.7 
Corporate debt securities626.0 0.3 (0.4)625.9 
Municipal bonds1.0   1.0 
U.S. Agency securities29.3   29.3 
U.S. Treasury securities350.3   350.3 
Total short-term investments$1,171.8 $0.3 $(0.4)$1,171.7 
We use the specific-identification method to determine any realized gains or losses from the sale of our short-term investments classified as available-for-sale. During the three months ended October 2, 2021 and September 26, 2020, we did not realize significant gains or losses on a gross level from the sale of our short-term investments classified as available-for-sale.
During the three months ended October 2, 2021 and September 26, 2020, our other income (expense), net was $0.6 million and $0.6 million, respectively, which includes interest and investment income on cash equivalents and short-term investments of $0.6 million and $2.4 million, respectively. As of October 2, 2021 and July 3, 2021, we recorded interest receivable of $4.1 million and $4.1 million, respectively, in prepayments and other current assets within the Consolidated Balance Sheets. We did not recognize an allowance for credit losses against interest receivables in any of the periods presented as there were no such losses.
10

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
As of October 2, 2021 and July 3, 2021, the Company does not have any cash equivalents and short-term investments that have been in a continuous unrealized gain or loss position for more than 12 months as of the periods presented. The following table summarizes unrealized losses on our cash equivalents and short-term investments by category that have been in a continuous unrealized loss position for less than 12 months as of the periods presented (in millions):
Fair ValueUnrealized Losses
October 2, 2021:
Commercial paper$24.5 $ 
Corporate debt securities329.6 (0.2)
Municipal bonds1.0  
U.S. government bonds338.2  
Total $693.3 $(0.2)
July 3, 2021:
U.S. Agency securities$28.3 $ 
Certificates of deposit6.0  
Commercial paper43.0  
Corporate debt securities432.3 (0.4)
Municipal bonds1.0  
U.S. government bonds106.9  
Total$617.5 $(0.4)
The following table classifies our short-term investments by contractual maturities (in millions): 
October 2, 2021July 3, 2021
Amortized CostFair ValueAmortized CostFair Value
Due in 1 year$714.3 $714.5 $587.0 $587.1 
Due in 1 year through 5 years559.1 559.1 584.8 584.6 
$1,273.4 $1,273.6 $1,171.8 $1,171.7 
All available-for-sale securities have been classified as current, based on management’s intent and ability to use the funds in current operations.

11

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 5. Fair Value Measurements
We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Level 1:Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3:Inputs are unobservable inputs based on our assumptions.
The fair value of our Level 1 financial instruments, such as money market funds and U.S. Treasury securities, which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our pricing service against fair values obtained from another independent source.
Financial assets measured at fair value on a recurring basis are summarized below (in millions): 
Level 1 Level 2 Level 3Total
October 2, 2021: (1)
Assets:
Cash equivalents:
Money market funds$204.7 $ $ $204.7 
U.S. Treasury securities210.2   210.2 
Short-term investments:
Certificates of deposit 28.5  28.5 
Commercial paper 124.8  124.8 
Asset-backed securities    
Corporate debt securities 671.4  671.4 
Municipal bonds 2.0  2.0 
Mortgage-backed securities    
Foreign government bonds    
U.S. Agency securities 28.2  28.2 
U.S. Treasury securities418.7   418.7 
Total assets$833.6 $854.9 $ $1,688.5 
(1) Excludes $196.1 million in cash held in our bank accounts as of October 2, 2021.
12

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Level 1 Level 2 Level 3Total
July 3, 2021: (1)
Assets:
Cash equivalents:
Commercial paper$ $7.5 $ $7.5 
Corporate debt securities 7.0  7.0 
Money market funds631.5   631.5 
Short-term investments:
Certificates of deposit 28.5  28.5 
Commercial paper 136.7  136.7 
Corporate debt securities 625.9  625.9 
Municipal bonds 1.0  1.0 
U.S. Agency securities 29.3  29.3 
U.S. Treasury securities350.3   350.3 
Total assets$981.8 $835.9 $ $1,817.7 
(1) Excludes $128.3 million in cash held in our bank accounts as of July 3, 2021.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
We report our financial instruments at fair value with the exception of the 2026 Notes and the 2024 Notes. The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period. We consider the fair value of the notes to be a Level 2 measurement as they are not actively traded in markets.
The carrying amounts and estimated fair values of the 2026 Notes and the 2024 Notes are as follows for the periods presented (in millions):
October 2, 2021July 3, 2021
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2026 Notes800.0 $1,151.3 $789.8 $1,146.1 
2024 Notes395.8 670.8 390.7 669.3 
$1,195.8 $1,822.1 $1,180.5 $1,815.4 
Assets Measured at Fair Value on a Non-Recurring Basis
We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. If not recoverable, an impairment loss would be calculated based on the excess of the carrying amount over the fair value.
Management utilizes various valuation methods, including an income approach, a market approach and a cost approach, to estimate the fair value of intangibles and other long-lived assets. During the annual impairment testing performed in the fourth quarter of fiscal 2021, we concluded that our intangible and other long-lived assets were not impaired. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, absent any interim indicators of impairment.

13

LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6. Balance Sheet Details
Allowance for current expected credit losses
We did not have any allowance for credit losses other than our allowance for uncollectible accounts receivable. As of October 2, 2021 and July 3, 2021, the allowance for credit losses on our trade receivables was $0.3 million and $0.4 million, respectively.
Inventories
The components of inventories were as follows (in millions):
October 2, 2021July 3, 2021
Raw materials and purchased parts$64.5 $64.4 
Work in process85.4 79.0 
Finished goods57.1 53.0 
Inventories
$207.0 $196.4 
Operating lease right-of-use assets, net
Operating lease right-of-use assets, net were as follows (in millions):
October 2, 2021July 3, 2021
Operating lease right-of-use assets$97.8 $87.3 
Less: accumulated amortization(22.6)(19.9)
Operating lease right-of-use assets, net$75.2 $67.4 
Property, plant and equipment, net
The components of property, plant and equipment, net were as follows (in millions):
October 2, 2021July 3, 2021
Land$40.9