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Leases | 12 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Leases | Note R. Leases The Company determines if an arrangement is a lease at inception. The Company considers a contract to be or to contain a lease if the contract conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. A lease liability is recorded at commencement for the net present value of future lease payments over the lease term. The discount rate used is generally the Company’s estimated incremental borrowing rate based on credit-adjusted and term-specific discount rates, using a third-party yield curve. A right of use (“ROU”) asset is recorded and recognized at commencement at the lease liability amount, adjusted for lease prepayments, initial direct costs incurred and lease incentives received. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. In the normal course of its business, the Company enters into various leases as the lessee, primarily related to certain transportation vehicles, warehouse facilities, office space, and machinery and equipment. These leases have remaining lease terms between one and sixteen years, some of which may include options to extend the leases for up to fifteen years or options to terminate the leases. The Company’s land leases have remaining lease terms up to seventy-nine years. The Company has elected not to recognize short-term leases on the balance sheet for all underlying asset classes. Short-term leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option that the Company is reasonably certain to exercise. Short-term leases are expensed on a straight-line basis over the lease term. The components of the Company’s lease costs were as follows:
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In millions) |
Operating lease cost |  | $ | 26 |  |  | $ | 23 |  |  | $ | 25 |
Finance lease cost |  |  | 6 |  |  |  | 6 |  |  |  | 7 |
Total lease cost |  | $ | 32 |  |  | $ | 29 |  |  | $ | 32 |
Included within operating lease costs are short-term lease costs, which were $7 million in fiscal 2023 and $5 million in both fiscal 2022 and 2021. Some lease arrangements require variable payments that are dependent on usage, output, or index-based adjustments. Variable lease costs wer e $2 million in fiscal 2023 and $1 million in both 2022 and 2021. Supplemental cash flow information related to the Company’s leases was as follows:
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In millions) |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 18 |  |  | $ | 17 |  |  | $ | 20 |
Operating cash flows from finance leases |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
Financing cash flows from finance leases |  |  | 3 |  |  |  | 4 |  |  |  | 3 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 11 |  |  | $ | 14 |  |  | $ | 6 |
Right-of-use assets obtained in exchange for new finance lease liabilities |  | $ | 4 |  |  | $ | 1 |  |  | $ | 4 |
Supplemental balance sheet information related to the Company’s leases was as follows:
Description |  | Balance Sheet Classification |  | September 30, 2023 |  |  | September 30, 2022 |
|  |  |  | (In millions) |
Lease ROU assets: |  |  |  |  |  |  |  |
Operating |  | Other assets |  | $ | 101 |  |  | $ | 96 |
Finance |  | Net property, plant and equipment |  |  | 39 |  |  |  | 41 |
Total lease ROU assets |  |  |  | $ | 140 |  |  | $ | 137 |
Lease liabilities: |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Operating |  | Accounts payable and accrued liabilities |  | $ | 15 |  |  | $ | 14 |
Finance |  | Current portion of long-term debt |  |  | 4 |  |  |  | 3 |
Long-term: |  |  |  |  |  |  |  |
Operating |  | Other liabilities |  |  | 84 |  |  |  | 83 |
Finance |  | Long-term debt |  |  | 24 |  |  |  | 26 |
Total lease liabilities |  |  |  | $ | 127 |  |  | $ | 126 |
The following table presents the weighted-average remaining lease term and discount rates for the Company’s leases:
Description |  | September 30, 2023 |  |  | September 30, 2022 |
Weighted-average remaining lease term (years): |  |  |  |  |  |
Operating leases |  |  | 15 |  |  |  | 15 |
Finance leases |  |  | 9 |  |  |  | 10 |
Weighted-average discount rate: |  |  |  |  |  |
Operating leases |  |  | 3.28 | % |  |  | 2.97 | %
Finance leases |  |  | 5.38 | % |  |  | 5.40 | %
Future minimum lease payments under non-cancelable operating and finance leases as of September 30, 2023 were as follows:
Years Ended September 30 |  | Operating leases |  |  | Finance leases |
|  | (In millions) |
2024 |  | $ | 18 |  |  | $ | 5 |
2025 |  |  | 16 |  |  |  | 4 |
2026 |  |  | 13 |  |  |  | 4 |
2027 |  |  | 12 |  |  |  | 3 |
2028 |  |  | 10 |  |  |  | 3 |
2029 and thereafter |  |  | 51 |  |  |  | 15 |
Total lease payments |  |  | 120 |  |  |  | 34 |
Less: imputed interest |  |  | 21 |  |  |  | 6 |
Total |  | $ | 99 |  |  | $ | 28 |

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