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Leases | 6 Months Ended
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Apr. 04, 2021
Leases [Abstract] |
Leases | LEASES The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computer, and office equipment that expire at various times through February 28, 2047. We have identified embedded operating leases within certain logistic agreements for warehouses and information technology services arrangements and recognized assets identified in the arrangements as part of operating right-of-use ("ROU") assets on the Company’s Condensed Consolidated Statements of Financial Position as of April 4, 2021 and September 30, 2020. We elected to exclude certain supply agreements that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our financial statements. The following is a summary of the leases recognized on the Company’s Condensed Consolidated Statements of Financial Position as of April 4, 2021 and September 30, 2020:
(in millions) |  | Line Item |  | April 4, 2021 |  | September 30, 2020
Assets |  |  |  |  |  |
Operating |  | Operating lease assets |  | $ | 103.0 |  |  | $ | 103.8 |
Finance |  | Property, plant and equipment, net |  | 129.8 |  |  | 136.3 |
Total leased assets |  |  |  | $ | 232.8 |  |  | $ | 240.1 |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating |  | Other current liabilities |  | $ | 24.9 |  |  | $ | 22.4 |
Finance |  | Current portion of long-term debt |  | 12.0 |  |  | 12.1 |
Long-term |  |  |  |  |  |
Operating |  | Long-term operating lease liabilities |  | 86.2 |  |  | 88.8 |
Finance |  | Long-term debt, net of current portion |  | 144.4 |  |  | 148.4 |
Total lease liabilities |  |  |  | $ | 267.5 |  |  | $ | 271.7 |
As of April 4, 2021, the Company had $19.7 million of commitments related to leases executed that have not yet commenced. The Company records its operating lease expense and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated Statements of Income depending on the nature and use of the underlying asset. The Company records its finance interest cost within interest expense in the Condensed Consolidated Statements of Income. The components of lease costs recognized in the Condensed Consolidated Statements of Income for the three and six month periods ended April 4, 2021 and March 29, 2020 are as follows:
|  | Three Month Periods Ended |  | Six Month Periods Ended
(in millions) |  | April 4, 2021 |  | March 29, 2020 |  | April 4, 2021 |  | March 29, 2020
Operating lease cost |  | $ | 7.6 |  |  | $ | 6.1 |  |  | $ | 15.4 |  |  | $ | 12.6 |
Finance lease cost |  |  |  |  |  |  |  |
Amortization of leased assets |  | 3.9 |  |  | 3.4 |  |  | 7.7 |  |  | 7.0 |
Interest on lease liability |  | 2.3 |  |  | 2.2 |  |  | 4.7 |  |  | 4.5 |
Variable lease cost |  | 3.2 |  |  | 3.3 |  |  | 5.9 |  |  | 5.8 |
Total lease cost |  | $ | 17.0 |  |  | $ | 15.0 |  |  | $ | 33.7 |  |  | $ | 29.9 |
During the three month periods ended April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million and $0.5 million, respectively. During the six month periods ended April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $1.1 million and $1.0 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income in the Condensed Consolidated Statements of Income. The following is a summary of the Company’s cash paid for amounts included in the measurement of lease liabilities recognized in the Condensed Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the three and six month periods ending April 4, 2021 and March 29, 2020:
|  | Three Month Periods Ended |  | Six Month Periods Ended
(in millions) |  | April 4, 2021 |  | March 29, 2020 |  | April 4, 2021 |  | March 29, 2020
Operating cash flow from operating leases |  | $ | 7.8 |  |  | $ | 5.4 |  |  | $ | 14.9 |  |  | $ | 11.8 |
Operating cash flows from finance leases |  | 2.3 |  |  | 2.3 |  |  | 4.7 |  |  | 4.6 |
Financing cash flows from finance leases |  | 3.2 |  |  | 3.5 |  |  | 6.3 |  |  | 6.9 |
Supplemental non-cash flow disclosure |  |  |  |  |  |  |  |
Acquisition of operating lease asset through lease obligations |  | 2.1 |  |  | 1.8 |  |  | 11.0 |  |  | 4.3 |
The following is a summary of weighted-average lease term and discount rate at April 4, 2021 and September 30, 2020:
|  | April 4, 2021 |  | September 30, 2020
Weighted average remaining lease term |  |  |  |
Operating leases |  | 6.1 years |  | 6.6 years
Finance leases |  | 15.4 years |  | 15.6 years
Weighted average discount rate |  |  |  |
Operating leases |  | 4.6 | % |  | 4.7 | %
Finance leases |  | 5.7 | % |  | 5.6 | %
At April 4, 2021, future lease payments under operating and finance leases were as follows:
(in millions) |  | Finance Leases |  | Operating Leases
2021 remaining balance |  | $ | 10.4 |  |  | $ | 13.9 |
2022 |  | 18.5 |  |  | 25.5 |
2023 |  | 17.4 |  |  | 23.7 |
2024 |  | 17.0 |  |  | 15.1 |
2025 |  | 19.9 |  |  | 12.3 |
Thereafter |  | 162.5 |  |  | 38.5 |
Total lease payments |  | 245.7 |  |  | 129.0 |
Amount representing interest |  | (89.3) |  |  | (17.9) |
Total minimum lease payments |  | $ | 156.4 |  |  | $ | 111.1 |
Leases | LEASES The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computer, and office equipment that expire at various times through February 28, 2047. We have identified embedded operating leases within certain logistic agreements for warehouses and information technology services arrangements and recognized assets identified in the arrangements as part of operating right-of-use ("ROU") assets on the Company’s Condensed Consolidated Statements of Financial Position as of April 4, 2021 and September 30, 2020. We elected to exclude certain supply agreements that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our financial statements. The following is a summary of the leases recognized on the Company’s Condensed Consolidated Statements of Financial Position as of April 4, 2021 and September 30, 2020:
(in millions) |  | Line Item |  | April 4, 2021 |  | September 30, 2020
Assets |  |  |  |  |  |
Operating |  | Operating lease assets |  | $ | 103.0 |  |  | $ | 103.8 |
Finance |  | Property, plant and equipment, net |  | 129.8 |  |  | 136.3 |
Total leased assets |  |  |  | $ | 232.8 |  |  | $ | 240.1 |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating |  | Other current liabilities |  | $ | 24.9 |  |  | $ | 22.4 |
Finance |  | Current portion of long-term debt |  | 12.0 |  |  | 12.1 |
Long-term |  |  |  |  |  |
Operating |  | Long-term operating lease liabilities |  | 86.2 |  |  | 88.8 |
Finance |  | Long-term debt, net of current portion |  | 144.4 |  |  | 148.4 |
Total lease liabilities |  |  |  | $ | 267.5 |  |  | $ | 271.7 |
As of April 4, 2021, the Company had $19.7 million of commitments related to leases executed that have not yet commenced. The Company records its operating lease expense and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated Statements of Income depending on the nature and use of the underlying asset. The Company records its finance interest cost within interest expense in the Condensed Consolidated Statements of Income. The components of lease costs recognized in the Condensed Consolidated Statements of Income for the three and six month periods ended April 4, 2021 and March 29, 2020 are as follows:
|  | Three Month Periods Ended |  | Six Month Periods Ended
(in millions) |  | April 4, 2021 |  | March 29, 2020 |  | April 4, 2021 |  | March 29, 2020
Operating lease cost |  | $ | 7.6 |  |  | $ | 6.1 |  |  | $ | 15.4 |  |  | $ | 12.6 |
Finance lease cost |  |  |  |  |  |  |  |
Amortization of leased assets |  | 3.9 |  |  | 3.4 |  |  | 7.7 |  |  | 7.0 |
Interest on lease liability |  | 2.3 |  |  | 2.2 |  |  | 4.7 |  |  | 4.5 |
Variable lease cost |  | 3.2 |  |  | 3.3 |  |  | 5.9 |  |  | 5.8 |
Total lease cost |  | $ | 17.0 |  |  | $ | 15.0 |  |  | $ | 33.7 |  |  | $ | 29.9 |
During the three month periods ended April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million and $0.5 million, respectively. During the six month periods ended April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $1.1 million and $1.0 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income in the Condensed Consolidated Statements of Income. The following is a summary of the Company’s cash paid for amounts included in the measurement of lease liabilities recognized in the Condensed Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the three and six month periods ending April 4, 2021 and March 29, 2020:
|  | Three Month Periods Ended |  | Six Month Periods Ended
(in millions) |  | April 4, 2021 |  | March 29, 2020 |  | April 4, 2021 |  | March 29, 2020
Operating cash flow from operating leases |  | $ | 7.8 |  |  | $ | 5.4 |  |  | $ | 14.9 |  |  | $ | 11.8 |
Operating cash flows from finance leases |  | 2.3 |  |  | 2.3 |  |  | 4.7 |  |  | 4.6 |
Financing cash flows from finance leases |  | 3.2 |  |  | 3.5 |  |  | 6.3 |  |  | 6.9 |
Supplemental non-cash flow disclosure |  |  |  |  |  |  |  |
Acquisition of operating lease asset through lease obligations |  | 2.1 |  |  | 1.8 |  |  | 11.0 |  |  | 4.3 |
The following is a summary of weighted-average lease term and discount rate at April 4, 2021 and September 30, 2020:
|  | April 4, 2021 |  | September 30, 2020
Weighted average remaining lease term |  |  |  |
Operating leases |  | 6.1 years |  | 6.6 years
Finance leases |  | 15.4 years |  | 15.6 years
Weighted average discount rate |  |  |  |
Operating leases |  | 4.6 | % |  | 4.7 | %
Finance leases |  | 5.7 | % |  | 5.6 | %
At April 4, 2021, future lease payments under operating and finance leases were as follows:
(in millions) |  | Finance Leases |  | Operating Leases
2021 remaining balance |  | $ | 10.4 |  |  | $ | 13.9 |
2022 |  | 18.5 |  |  | 25.5 |
2023 |  | 17.4 |  |  | 23.7 |
2024 |  | 17.0 |  |  | 15.1 |
2025 |  | 19.9 |  |  | 12.3 |
Thereafter |  | 162.5 |  |  | 38.5 |
Total lease payments |  | 245.7 |  |  | 129.0 |
Amount representing interest |  | (89.3) |  |  | (17.9) |
Total minimum lease payments |  | $ | 156.4 |  |  | $ | 111.1 |

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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