LEASES

12 Months Ended

Sep. 30, 2024

Leases [Abstract]

LEASES

LEASES

The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computers, and office equipment that expire at various times through June 2035. We have embedded operating leases within certain third-party logistic agreements for warehousing and information technology services arrangements and recognized right of use assets identified in the arrangements as part of Operating Lease Assets on the Consolidated Statements of Financial Position. We elected to exclude certain supply chain contracts that may contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our consolidated financial statements.

The following is a summary of leases recognized on the Consolidated Statements of Financial Position as of September 30, 2024 and 2023:

(in millions)	Line Item	2024		2023
Assets
Operating	Operating lease assets	$	101.9	$	110.8
Finance	Property, plant and equipment, net	61.0		66.2
Total lease assets		$	162.9	$	177.0
Liabilities
Current
Operating	Other current liabilities	$	31.3	$	26.9
Finance	Current portion of long-term debt	9.4		8.6
Long-term
Operating	Long-term operating lease liabilities	87.0		95.6
Finance	Long-term debt, net of current portion	72.2		77.8
Total lease liabilities		$	199.9	$	208.9

As of September 30, 2024, there were no significant commitments related to executed leases that has not yet commenced and are unrecognized.

During the year ended September 30, 2024, the Company recognized a $5.1 million impairment charge on a right of use operating lease asset for a HPC distribution center having a maturity of February 2025, due to the exit of operations from the facility and the inability to sub-lease to a third-party prior to the maturity, included within Selling, General & Administrative Expense on the Consolidated Statements of Income. During the year ended September 30, 2023, the Company recognized a $5.2 million impairment charge on a right of use operating lease asset for a GPC warehouse having a maturity date of December 2029, due to the exit of operations from the facility and the intention to sub-lease to a third-party, included as Selling, General & Administrative Expense on the Consolidated Statements of Income. The impairments were measured using projected discounted cash flow for the facility, including assumed sub-lease tenant, when applicable, at sub-lease rental rates comparable to current market conditions.

The components of lease costs recognized in the Consolidated Statements of Income for the year ended September 30, 2024, 2023, and 2022 are as follows:

(in millions)	2024		2023		2022
Operating lease cost	$	34.6	$	37.0	$	26.3
Finance lease cost
Amortization of leased assets	10.3		10.2		10.5
Interest on lease liability	4.5		4.8		5.2
Variable lease cost	13.0		12.4		10.8
Total lease cost	$	62.4	$	64.4	$	52.8

During the year ended September 30, 2024, 2023, and 2022 the Company recognized income attributable to leases and sub-leases of $2.4 million, $2.4 million, and $2.7 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income on the Consolidated Statements of Income.

The following is a summary of cash paid for amounts included in the measurement of lease liabilities recognized in the Consolidated Statements of Cash Flow, including supplemental non-cash activity related to operating leases, for the year ended September 30, 2024, 2023, and 2022:

(in millions)	2024		2023		2022
Operating cash flow from operating leases	$	35.5	$	30.3	$	25.3
Operating cash flows from finance leases	4.5		4.8		5.1
Financing cash flows from finance leases	10.1		9.5		8.9
Supplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligations	25.2		66.9		30.4

The following is a summary of weighted-average lease term and discount rate at September 30, 2024 and 2023:

	2024		2023
Weighted average remaining lease term
Operating leases	4.0 years		4.6 years
Finance leases	8.0 years		8.7 years
Weighted average discount rate
Operating leases	6.0	%	5.5	%
Finance leases	5.4	%	5.3	%

At September 30, 2024, future lease payments under operating and finance leases were as follows:

(in millions)	Finance Leases		Operating Leases
2025	$	13.1	$	37.3
2026	13.6		32.0
2027	13.4		29.6
2028	13.1		25.1
2029	12.7		7.4
Thereafter	33.9		1.8
Total lease payments	99.8		133.2
Amount representing interest	(18.2)		(14.9)
Total minimum lease payments	$	81.6	$	118.3

LEASES

LEASES

The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computers, and office equipment that expire at various times through June 2035. We have embedded operating leases within certain third-party logistic agreements for warehousing and information technology services arrangements and recognized right of use assets identified in the arrangements as part of Operating Lease Assets on the Consolidated Statements of Financial Position. We elected to exclude certain supply chain contracts that may contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our consolidated financial statements.

The following is a summary of leases recognized on the Consolidated Statements of Financial Position as of September 30, 2024 and 2023:

(in millions)	Line Item	2024		2023
Assets
Operating	Operating lease assets	$	101.9	$	110.8
Finance	Property, plant and equipment, net	61.0		66.2
Total lease assets		$	162.9	$	177.0
Liabilities
Current
Operating	Other current liabilities	$	31.3	$	26.9
Finance	Current portion of long-term debt	9.4		8.6
Long-term
Operating	Long-term operating lease liabilities	87.0		95.6
Finance	Long-term debt, net of current portion	72.2		77.8
Total lease liabilities		$	199.9	$	208.9

As of September 30, 2024, there were no significant commitments related to executed leases that has not yet commenced and are unrecognized.

During the year ended September 30, 2024, the Company recognized a $5.1 million impairment charge on a right of use operating lease asset for a HPC distribution center having a maturity of February 2025, due to the exit of operations from the facility and the inability to sub-lease to a third-party prior to the maturity, included within Selling, General & Administrative Expense on the Consolidated Statements of Income. During the year ended September 30, 2023, the Company recognized a $5.2 million impairment charge on a right of use operating lease asset for a GPC warehouse having a maturity date of December 2029, due to the exit of operations from the facility and the intention to sub-lease to a third-party, included as Selling, General & Administrative Expense on the Consolidated Statements of Income. The impairments were measured using projected discounted cash flow for the facility, including assumed sub-lease tenant, when applicable, at sub-lease rental rates comparable to current market conditions.

The components of lease costs recognized in the Consolidated Statements of Income for the year ended September 30, 2024, 2023, and 2022 are as follows:

(in millions)	2024		2023		2022
Operating lease cost	$	34.6	$	37.0	$	26.3
Finance lease cost
Amortization of leased assets	10.3		10.2		10.5
Interest on lease liability	4.5		4.8		5.2
Variable lease cost	13.0		12.4		10.8
Total lease cost	$	62.4	$	64.4	$	52.8

During the year ended September 30, 2024, 2023, and 2022 the Company recognized income attributable to leases and sub-leases of $2.4 million, $2.4 million, and $2.7 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income on the Consolidated Statements of Income.

The following is a summary of cash paid for amounts included in the measurement of lease liabilities recognized in the Consolidated Statements of Cash Flow, including supplemental non-cash activity related to operating leases, for the year ended September 30, 2024, 2023, and 2022:

(in millions)	2024		2023		2022
Operating cash flow from operating leases	$	35.5	$	30.3	$	25.3
Operating cash flows from finance leases	4.5		4.8		5.1
Financing cash flows from finance leases	10.1		9.5		8.9
Supplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligations	25.2		66.9		30.4

The following is a summary of weighted-average lease term and discount rate at September 30, 2024 and 2023:

	2024		2023
Weighted average remaining lease term
Operating leases	4.0 years		4.6 years
Finance leases	8.0 years		8.7 years
Weighted average discount rate
Operating leases	6.0	%	5.5	%
Finance leases	5.4	%	5.3	%

At September 30, 2024, future lease payments under operating and finance leases were as follows:

(in millions)	Finance Leases		Operating Leases
2025	$	13.1	$	37.3
2026	13.6		32.0
2027	13.4		29.6
2028	13.1		25.1
2029	12.7		7.4
Thereafter	33.9		1.8
Total lease payments	99.8		133.2
Amount representing interest	(18.2)		(14.9)
Total minimum lease payments	$	81.6	$	118.3