Leases

9 Months Ended

Jul. 03, 2021

6. Leases

The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles.

We recognize right-of-use assets and lease liabilities for leases with original lease terms greater than one year based on the present value of lease payments over the lease term using our incremental borrowing rate on a collateralized basis. Short-term leases, with original lease terms of less than one year, are not recognized on the balance sheet. We are party to certain leases, namely for manufacturing facilities, which offer renewal options to extend the original lease term. Renewal options are included in the right-of-use asset and lease liability based on our assessment of the probability that the options will be exercised.

Supplemental lease information is as follows:

Leases	Classification	July 3, 2021		September 26, 2020
Operating leases:
Operating lease right-of-use assets	Right-of-use assets	$	577	$	562
Current operating lease liabilities	Other current liabilities		114		115
Noncurrent operating lease liabilities	Operating lease liability		480		464
Finance leases:
Finance lease right-of-use assets	Property, plant, and equipment, net	$	62	$	78
Current finance lease liability	Current portion of long-term debt		16		17
Noncurrent finance lease liabilities	Long-term debt, less current portion		41		59

Cash paid for amounts included in lease liabilities	Three Quarterly Periods Ended July 3, 2021		Three Quarterly Periods Ended June 27, 2020
Operating cash flows from operating leases	$	85	$	86
Operating cash flows from finance leases		2		3
Financing cash flows from finance leases		19		25

Right-of-use assets obtained in exchange for new operating lease liabilities were $19 million and $53 million for the quarterly and three quarterly periods ended July 3, 2021, respectively.