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Leases
 9 Months Ended
Jun. 28, 2020
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 I.T. services arrangements and recognized assets identified in the arrangements as part of operating ROU assets on the Company’s Condensed Consolidated Statement of Financial Position as of June 28, 2020. We elected to exclude certain supply chain contracts 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 Company’s leases recognized on the Company’s Condensed Consolidated Statement of Financial Position as of June 28, 2020:
(in millions)Line ItemJune 28, 2020
Assets
OperatingOperating lease assets$92.4  
FinanceProperty, plant and equipment, net138.0  
Total leased assets$230.4  
Liabilities
Current
OperatingOther current liabilities$20.8  
FinanceCurrent portion of long-term debt10.3  
Long-term
OperatingLong-term operating lease liabilities78.7  
FinanceLong-term debt, net of current portion150.8  
Total lease liabilities$260.6  
As of June 28, 2020, the Company had no significant commitments related to leases executed that have not yet commenced.
The Company records its operating lease and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated Statement 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 Statement of Income. The components of lease costs recognized in the Condensed Consolidated Statement of Income for the three and nine month periods ended June 28, 2020 are as follows:
Three Month Period EndedNine Month Period Ended
(in millions)June 28, 2020June 28, 2020
Operating lease cost$6.2  $18.8  
Finance lease cost
Amortization of leased assets3.7  10.7  
Interest on lease liability2.3  6.7  
Variable lease cost3.3  9.1  
Total lease cost$15.5  $45.3  
During the three month and nine month periods ended June 28, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million and $1.6 million, respectively, including $0.3 million and $1.0 million, respectively, from the sublease of the Company’s Corporate Headquarters in Middleton, Wisconsin with a related party, Energizer. Income from leases and sub-leases is recognized as Other Non-Operating Income on the Condensed Consolidated Statement 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 nine month periods ending June 28, 2020:
Three Month Period EndedNine Month Period Ended
(in millions)June 28, 2020June 28, 2020
Operating cash flow from operating leases$5.5  $17.3  
Operating cash flows from finance leases2.2  6.8  
Financing cash flows from finance leases3.8  10.7  
Supplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligations2.2  6.4  
The following is a summary of weighted-average lease term and discount rate at June 28, 2020:
June 28, 2020
Weighted average remaining lease term
Operating leases6.3 years
Finance leases15.6 years
Weighted average discount rate
Operating leases4.62 %
Finance leases5.60 %
At June 28, 2020, future lease payments under operating and finance leases were as follows:
(in millions)Finance LeasesOperating Leases
2020 remaining balance$4.1  $6.4  
202121.0  24.4  
202217.7  19.7  
202316.6  17.5  
202416.3  11.2  
Thereafter180.8  37.1  
Total lease payments256.5  116.3  
Amount representing interest(95.4) (16.8) 
Total minimum lease payments$161.1  $99.5  
As of September 30, 2019, minimum commitments under the Company’s leases, as required under prior lease guidance, were as follows:
(in millions)Finance LeasesOperating Leases
2020$17.5  $25.0  
202119.7  23.2  
202216.5  20.6  
202315.5  17.8  
202415.4  10.8  
Thereafter179.9  37.5  
Total lease payments264.5  134.9  
Amount representing interest(98.9) —  
Total minimum lease payments$165.6  $134.9  
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 I.T. services arrangements and recognized assets identified in the arrangements as part of operating ROU assets on the Company’s Condensed Consolidated Statement of Financial Position as of June 28, 2020. We elected to exclude certain supply chain contracts 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 Company’s leases recognized on the Company’s Condensed Consolidated Statement of Financial Position as of June 28, 2020:
(in millions)Line ItemJune 28, 2020
Assets
OperatingOperating lease assets$92.4  
FinanceProperty, plant and equipment, net138.0  
Total leased assets$230.4  
Liabilities
Current
OperatingOther current liabilities$20.8  
FinanceCurrent portion of long-term debt10.3  
Long-term
OperatingLong-term operating lease liabilities78.7  
FinanceLong-term debt, net of current portion150.8  
Total lease liabilities$260.6  
As of June 28, 2020, the Company had no significant commitments related to leases executed that have not yet commenced.
The Company records its operating lease and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated Statement 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 Statement of Income. The components of lease costs recognized in the Condensed Consolidated Statement of Income for the three and nine month periods ended June 28, 2020 are as follows:
Three Month Period EndedNine Month Period Ended
(in millions)June 28, 2020June 28, 2020
Operating lease cost$6.2  $18.8  
Finance lease cost
Amortization of leased assets3.7  10.7  
Interest on lease liability2.3  6.7  
Variable lease cost3.3  9.1  
Total lease cost$15.5  $45.3  
During the three month and nine month periods ended June 28, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million and $1.6 million, respectively, including $0.3 million and $1.0 million, respectively, from the sublease of the Company’s Corporate Headquarters in Middleton, Wisconsin with a related party, Energizer. Income from leases and sub-leases is recognized as Other Non-Operating Income on the Condensed Consolidated Statement 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 nine month periods ending June 28, 2020:
Three Month Period EndedNine Month Period Ended
(in millions)June 28, 2020June 28, 2020
Operating cash flow from operating leases$5.5  $17.3  
Operating cash flows from finance leases2.2  6.8  
Financing cash flows from finance leases3.8  10.7  
Supplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligations2.2  6.4  
The following is a summary of weighted-average lease term and discount rate at June 28, 2020:
June 28, 2020
Weighted average remaining lease term
Operating leases6.3 years
Finance leases15.6 years
Weighted average discount rate
Operating leases4.62 %
Finance leases5.60 %
At June 28, 2020, future lease payments under operating and finance leases were as follows:
(in millions)Finance LeasesOperating Leases
2020 remaining balance$4.1  $6.4  
202121.0  24.4  
202217.7  19.7  
202316.6  17.5  
202416.3  11.2  
Thereafter180.8  37.1  
Total lease payments256.5  116.3  
Amount representing interest(95.4) (16.8) 
Total minimum lease payments$161.1  $99.5  
As of September 30, 2019, minimum commitments under the Company’s leases, as required under prior lease guidance, were as follows:
(in millions)Finance LeasesOperating Leases
2020$17.5  $25.0  
202119.7  23.2  
202216.5  20.6  
202315.5  17.8  
202415.4  10.8  
Thereafter179.9  37.5  
Total lease payments264.5  134.9  
Amount representing interest(98.9) —  
Total minimum lease payments$165.6  $134.9