LEASES

12 Months Ended

Sep. 30, 2025

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 for the fiscal years ended September 30, 2025 and 2024 are as follows (in millions):


		Fiscal Years Ended September 30,
	Classification	2025		2024
Operating lease cost	Cost of sales or selling and administrative expenses	$	23	$	22
Finance lease cost:
Amortization of leased assets	Cost of sales	15		12
Interest on lease liabilities	Interest expense-net	19		16
Total lease cost		$	57	$	50

Supplemental cash flow information related to leases for the fiscal years ended September 30, 2025 and 2024 is as follows (in millions):


	Fiscal Years Ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	23	$	21
Operating cash outflows from finance leases	16		14
Financing cash outflows from finance leases	7		6

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	25	$	21
Financing leases	25		83

Supplemental balance sheet information related to leases is as follows (in millions):


	Classification	September 30, 2025		September 30, 2024
Operating Leases
Operating lease right-of-use assets	Other non-current assets	$	65	$	61

Current operating lease liabilities	Accrued and other current liabilities	15		19
Long-term operating lease liabilities	Other non-current liabilities	51		43
Total operating lease liabilities		$	66	$	62

Finance Leases
Finance lease right-of-use assets, net	Property, plant and equipment-net	$	264	$	252

Current finance lease liabilities	Current portion of long-term debt	8		6
Long-term finance lease liabilities	Long-term debt	276		256
Total finance lease liabilities		$	284	$	262

As of September 30, 2025, the Company has the following remaining lease term and weighted average discount rates:


Weighted-average remaining lease term
Operating leases			6.4 years
Finance leases			19.8 years

Weighted-average discount rate
Operating leases			5.7%
Finance leases			7.0%

Maturities of lease liabilities at September 30, 2025 are as follows (in millions):


	Operating Leases		Finance Leases
2026	$	19	$	22
2027	16		26
2028	12		25
2029	9		25
2030	5		27
Thereafter	20		437
Total future minimum lease payments	81		562
Less: imputed interest	15		278
Present value of lease liabilities reported	$	66	$	284