Leases (Notes)

3 Months Ended

Dec. 27, 2019

Leases of Lessee Disclosure [Text Block]

11. LEASES

The Company determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities in the Company's condensed consolidated balance sheet.

The Company’s lease arrangements consist primarily of corporate, manufacturing and other facility agreements as well as various machinery and office equipment agreements. The leases expire at various dates through 2033, some of which include options to extend the lease term. The options with the longest potential total lease term consist of options for extension of up to three five-year periods following expiration of the original lease term.

During the three months ended December 27, 2019, the Company recorded $5.7 million and $1.1 million of operating lease expense and variable lease expense, respectively. During the three months ended December 28, 2018, the Company recorded $4.7 million of rent expense. The Company's finance leases and short-term leases are immaterial.

Supplemental cash information and non-cash activities related to operating leases are as follows (in millions):



	Three Months Ended
	December 27, 2019
Operating cash flows from operating leases	$	5.1
Operating lease assets obtained in exchange for new lease liabilities	20.7

Maturities of lease liabilities under operating leases are as follows (in millions):



	December 27, 2019
2020	$	11.8
2021	23.4
2022	22.1
2023	21.8
2024	20.1
Thereafter	89.7
Total lease payments	188.9
Less: imputed interest	(28.7		)
Present value of lease liabilities	160.2
Less: current portion (included in other current assets)	(9.3		)
Total	$	150.9

Future minimum lease liabilities under non-cancelable operating leases are as follows (in millions):



	September 27, 2019
2020	$	26.7
2021	25.9
2022	24.8
2023	23.3
2024	21.5
Thereafter	97.7
Total	$	219.9

Weighted-average remaining lease term and discount rate related to operating leases are as follows:



	December 27, 2019
Weighted-average remaining lease term (years)	8.26
Weighted-average discount rate	3.37	%