Leases

12 Months Ended

Sep. 27, 2024

We primarily lease office space, warehouses, housing, equipment and vehicles and recognize a right-of-use asset and lease liability on the lease commencement date through calculation of the present value of unpaid lease payments over the lease term. All lease payments are based on the passage of time and certain leases are subject to annual escalations for increases in base rents. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We have no significant long-term purchase agreements with service providers and our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Short-Term Leases

We have elected the practical expedient for short-term lease recognition exemption by class of underlying asset which results in off-balance sheet accounting for leases with an initial term of 12 months or less (“short-term leases”). We recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. We also elected a package of practical expedients permitted under ASC 842 which allows the carry forward of historical lease classifications.

Short-term lease rental expense was $40 million, $42 million and $46 million for the years ended September 27, 2024, September 29, 2023 and September 30, 2022, respectively.

Operating Leases

The Company's operating leases primarily include our material leases of buildings (consisting primarily of our corporate office lease commitments) and equipment and, if applicable, embedded leases associated with real estate, equipment and vehicles in certain contracts with an initial term of 12 months or longer. These leases are classified as operating leases and are recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets.

The following tables present our operating leases as of September 27, 2024 and September 29, 2023:


		As of
(Amounts in millions)	Classification	September 27, 2024		September 29, 2023
Assets
Operating lease right-of-use assets	Other long-term assets	$	250	$	216

Total leased assets		$	250	$	216

Liabilities
Current
Current portion of operating lease liabilities	Other current liabilities	$	67	$	53

Noncurrent
Long-term portion of operating lease liabilities	Other long-term liabilities	193		167

Total lease liabilities		$	260	$	220


Maturity of Lease Liabilities
(Amounts in millions)	Operating Leases
September 30, 2025	$	74
September 30, 2026	67
September 30, 2027	54
September 30, 2028	40
September 30, 2029	25
Thereafter	20
Total lease payments	280
Less: imputed interest	(20)
Present value of lease liabilities (1)	$	260

(1)As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.


	As of
Lease Term and Discount Rate	September 27, 2024		September 29, 2023
Weighted average remaining lease term (years)
Operating leases	4.4		4.9

Weighted average discount rate
Operating leases	4.0	%	3.0	%

The following tables present selected financial information for the years ended September 27, 2024, September 29, 2023 and September 30, 2022:


Lease Cost		For the years ended
(Amounts in millions)	Classification	September 27, 2024		September 29, 2023		September 30, 2022
Operating lease cost	Cost of revenues	$	44	$	40	$	22
	Selling, general and administrative expenses	16		24		22



Net lease cost		$	60	$	64	$	44


Other Information	For the years ended
(Amounts in millions)	September 27, 2024		September 29, 2023		September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating lease payments	$	58	$	68	$	46


Operating lease right-of-use assets obtained in exchange for new operating lease liability	4		1		5