Leases (Notes)

6 Months Ended

Mar. 27, 2020

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 and six months ended March 27, 2020, the Company recorded $6.3 million and $12.3 million of operating lease expense and $3.3 million and $4.0 million of variable lease expense, respectively. During the three and six months ended March 29, 2019, the Company recorded $4.7 million and $9.4 million of rent expense, respectively. 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):



	Six Months Ended
	March 27, 2020
Operating cash outflows from operating leases	$	11.4
Operating lease assets obtained in exchange for new lease liabilities	$	29.8

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



	March 27, 2020
2020 (remainder)	$	9.9
2021	23.7
2022	24.4
2023	23.8
2024	21.4
Thereafter	97.7
Total lease payments	200.9
Less: imputed interest	(28.3		)
Present value of lease liabilities	172.6
Less: current portion (included in other current liabilities)	(20.7		)
Total	$	151.9

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:



	March 27, 2020
Weighted-average remaining lease term (years)	8.5
Weighted-average discount rate	3.3	%