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LEASES | 9 Months Ended
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Jun. 29, 2024
Leases [Abstract] |
Leases | LEASES The Company leases certain manufacturing facilities, offices, land, equipment and vehicles. Such leases, some of which are noncancellable and, in many cases, include renewals, expire at various dates. Such options to renew are included in the lease term when it is reasonably certain that the option will be exercised. The Company’s lease agreements typically do not contain any significant residual value guarantees or restrictive covenants, and payments within certain lease agreements are adjusted periodically for changes in an index or rate. The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The discount rate implicit within our leases is generally not determinable and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on the lease term and the currency in which lease payments are made. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of twelve months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. The components of lease expense are as follows (in millions):
|  |  | Thirteen Week Periods Ended |  | Thirty-Nine Week Periods Ended
| Classification |  | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Operating lease cost | Cost of sales or selling and administrative expenses |  | $ | 5 |  |  | $ | 5 |  |  | $ | 15 |  |  | $ | 15 |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of leased assets | Cost of sales |  | 3 |  |  | 2 |  |  | 9 |  |  | 7 |
Interest on lease liabilities | Interest expense-net |  | 5 |  |  | 3 |  |  | 11 |  |  | 10 |
Total lease cost |  |  | $ | 13 |  |  | $ | 10 |  |  | $ | 35 |  |  | $ | 32 |
Supplemental cash flow information related to leases is as follows (in millions):
|  | Thirty-Nine Week Periods Ended
|  | June 29, 2024 |  | July 1, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflows from operating leases |  | $ | 15 |  |  | $ | 16 |
Operating cash outflows from finance leases |  | 10 |  |  | 7 |
Financing cash outflows from finance leases |  | 4 |  |  | 4 |
Lease assets obtained in exchange for new lease obligations: |  |  |  |
Operating leases |  | $ | 6 |  |  | $ | 14 |
Financing leases |  | 65 |  |  | 48 |
Supplemental balance sheet information related to leases is as follows (in millions):
| Classification |  | June 29, 2024 |  | September 30, 2023
Operating Leases |  |  |  |  |
Operating lease right-of-use assets | Other non-current assets |  | $ | 63 |  |  | $ | 64 |
Current operating lease liabilities | Accrued and other current liabilities |  | 16 |  |  | 16 |
Long-term operating lease liabilities | Other non-current liabilities |  | 38 |  |  | 51 |
Total operating lease liabilities |  |  | $ | 54 |  |  | $ | 67 |
Finance Leases |  |  |  |  |
Finance lease right-of-use assets, net | Property, plant and equipment-net |  | $ | 286 |  |  | $ | 176 |
Current finance lease liabilities | Current portion of long-term debt |  | 6 |  |  | 5 |
Long-term finance lease liabilities | Long-term debt |  | 265 |  |  | 188 |
Total finance lease liabilities |  |  | $ | 271 |  |  | $ | 193 |
As of June 29, 2024, the Company has the following remaining lease term and weighted average discount rates:
Weighted-average remaining lease term |
Operating leases | 4.9 years
Finance leases | 21.2 years
Weighted-average discount rate |
Operating leases | 5.9%
Finance leases | 7.0%
Maturities of lease liabilities at June 29, 2024 are as follows (in millions):
| Operating Leases |  | Finance Leases
2024 | $ | 5 |  |  | $ | 5 |
2025 | 19 |  |  | 21 |
2026 | 13 |  |  | 21 |
2027 | 10 |  |  | 22 |
2028 | 6 |  |  | 23 |
Thereafter | 12 |  |  | 460 |
Total future minimum lease payments | 65 |  |  | 552 |
Less: imputed interest | 11 |  |  | 281 |
Present value of lease liabilities reported | $ | 54 |  |  | $ | 271 |
Leases | LEASES The Company leases certain manufacturing facilities, offices, land, equipment and vehicles. Such leases, some of which are noncancellable and, in many cases, include renewals, expire at various dates. Such options to renew are included in the lease term when it is reasonably certain that the option will be exercised. The Company’s lease agreements typically do not contain any significant residual value guarantees or restrictive covenants, and payments within certain lease agreements are adjusted periodically for changes in an index or rate. The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The discount rate implicit within our leases is generally not determinable and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on the lease term and the currency in which lease payments are made. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of twelve months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. The components of lease expense are as follows (in millions):
|  |  | Thirteen Week Periods Ended |  | Thirty-Nine Week Periods Ended
| Classification |  | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Operating lease cost | Cost of sales or selling and administrative expenses |  | $ | 5 |  |  | $ | 5 |  |  | $ | 15 |  |  | $ | 15 |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of leased assets | Cost of sales |  | 3 |  |  | 2 |  |  | 9 |  |  | 7 |
Interest on lease liabilities | Interest expense-net |  | 5 |  |  | 3 |  |  | 11 |  |  | 10 |
Total lease cost |  |  | $ | 13 |  |  | $ | 10 |  |  | $ | 35 |  |  | $ | 32 |
Supplemental cash flow information related to leases is as follows (in millions):
|  | Thirty-Nine Week Periods Ended
|  | June 29, 2024 |  | July 1, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflows from operating leases |  | $ | 15 |  |  | $ | 16 |
Operating cash outflows from finance leases |  | 10 |  |  | 7 |
Financing cash outflows from finance leases |  | 4 |  |  | 4 |
Lease assets obtained in exchange for new lease obligations: |  |  |  |
Operating leases |  | $ | 6 |  |  | $ | 14 |
Financing leases |  | 65 |  |  | 48 |
Supplemental balance sheet information related to leases is as follows (in millions):
| Classification |  | June 29, 2024 |  | September 30, 2023
Operating Leases |  |  |  |  |
Operating lease right-of-use assets | Other non-current assets |  | $ | 63 |  |  | $ | 64 |
Current operating lease liabilities | Accrued and other current liabilities |  | 16 |  |  | 16 |
Long-term operating lease liabilities | Other non-current liabilities |  | 38 |  |  | 51 |
Total operating lease liabilities |  |  | $ | 54 |  |  | $ | 67 |
Finance Leases |  |  |  |  |
Finance lease right-of-use assets, net | Property, plant and equipment-net |  | $ | 286 |  |  | $ | 176 |
Current finance lease liabilities | Current portion of long-term debt |  | 6 |  |  | 5 |
Long-term finance lease liabilities | Long-term debt |  | 265 |  |  | 188 |
Total finance lease liabilities |  |  | $ | 271 |  |  | $ | 193 |
As of June 29, 2024, the Company has the following remaining lease term and weighted average discount rates:
Weighted-average remaining lease term |
Operating leases | 4.9 years
Finance leases | 21.2 years
Weighted-average discount rate |
Operating leases | 5.9%
Finance leases | 7.0%
Maturities of lease liabilities at June 29, 2024 are as follows (in millions):
| Operating Leases |  | Finance Leases
2024 | $ | 5 |  |  | $ | 5 |
2025 | 19 |  |  | 21 |
2026 | 13 |  |  | 21 |
2027 | 10 |  |  | 22 |
2028 | 6 |  |  | 23 |
Thereafter | 12 |  |  | 460 |
Total future minimum lease payments | 65 |  |  | 552 |
Less: imputed interest | 11 |  |  | 281 |
Present value of lease liabilities reported | $ | 54 |  |  | $ | 271 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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