10. LEASES
The Company’s lease arrangements consist primarily of corporate, manufacturing, design, and other facility agreements as well as various machinery and office equipment agreements. The leases expire at various dates through 2061, some of which include options to extend the lease term. The longest potential remaining lease term consists of a 36 year land lease in Osaka, Japan.
During fiscal 2025, fiscal 2024, and fiscal 2023, the Company recorded $39.5 million, $35.5 million, and $39.8 million of operating lease expense, and $15.2 million, $20.6 million, and $19.2 million of variable lease expense, respectively.
Supplemental cash information and non-cash activities related to operating leases are as follows (in millions):
| | | | | | | | | | | | | | | | | |
| Fiscal Year Ended |
| October 3, 2025 | | September 27, 2024 | | September 29, 2023 |
| Operating cash outflows from operating leases | $ | 38.3 | | | $ | 35.4 | | | $ | 34.0 | |
| Operating lease assets obtained in exchange for new lease liabilities | $ | 31.3 | | | $ | 16.2 | | | $ | 11.1 | |
Operating leases are classified as follows (in millions):
| | | | | | | | | | | |
| As of |
| October 3, 2025 | | September 27, 2024 |
| Other current liabilities | $ | 36.8 | | | $ | 20.2 | |
| Long-term operating lease liabilities | 170.5 | | | 185.9 | |
| Total lease liabilities | $ | 207.3 | | | $ | 206.1 | |
Maturities of lease liabilities under operating leases by fiscal year are as follows (in millions):
| | | | | |
| As of |
| October 3, 2025 |
| 2026 | $ | 37.1 | |
| 2027 | 38.7 | |
| 2028 | 34.5 | |
| 2029 | 31.5 | |
| 2030 | 20.5 | |
| Thereafter | 89.8 | |
| Total lease payments | 252.1 | |
| Less: imputed interest | (44.8) | |
| Present value of lease liabilities | 207.3 | |
| Less: current portion (included in other current liabilities) | (36.8) | |
Long-term operating lease liabilities | $ | 170.5 | |
Weighted-average remaining lease term and discount rate related to operating leases are as follows:
| | | | | | | | | | | |
| As of |
| October 3, 2025 | | September 27, 2024 |
| Weighted-average remaining lease term (in years) | 10.6 | | 11.9 |
| Weighted-average discount rate | 4.0 | % | | 3.7 | % |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.