The Company determines if an arrangement is a lease at inception. The Company considers a contract to be or to contain a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.

A lease liability is recorded at commencement for the net present value of future lease payments over the lease term. The discount rate used is generally the Company’s estimated incremental borrowing rate based on credit-adjusted and term-specific discount rates, using a third-party yield curve. An ROU asset is recorded and recognized at commencement at the lease liability amount, including initial direct costs incurred, and is reduced for lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

In the normal course of its business, the Company enters into various leases as the lessee, primarily related to certain transportation vehicles, warehouse facilities, office space, and machinery and equipment. These leases have remaining lease terms between one and nineteen years, some of which may include options to extend the leases for up to fifteen years or options to terminate the leases. The Company’s land leases have remaining lease terms up to seventy years.

Some lease arrangements require variable payments that are dependent on usage, output, or index-based adjustments. The Company does not have material variable lease payments.

The Company has elected not to recognize short-term leases on the balance sheet for all underlying asset classes. Short-term leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option that the Company is reasonably certain to exercise. Short-term leases are expensed on a straight-line basis over the lease term.

		Year Ended September 30
		2020
	(In millions)
Operating lease cost		$	32
Finance lease cost			6
Total lease cost		$	38

For fiscal 2020, short-term lease costs were $6 million, and variable lease costs were $1 million.

Supplemental cash flow information related to the Company’s leases was as follows:

	Year Ended September 30
	2020
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	25
Operating cash flows from finance leases		2
Financing cash flows from finance leases		3
Right-of-use assets obtained in exchange for new operating lease liabilities	$	14
Right-of-use assets obtained in exchange for new finance lease liabilities	$	24

Supplemental balance sheet information related to the Company’s leases was as follows:

Description	Balance Sheet Classification	September 30, 2020
		(In millions)
Lease ROU assets:
Operating	Other assets	$	98
Finance	Net property, plant and equipment		44
Total lease ROU assets		$	142

Lease liabilities:
Current:
Operating	Accounts payable and accrued liabilities	$	15
Finance	Current portion of long-term debt		3
Long-term:
Operating	Other liabilities		89
Finance	Long-term debt		28
Total lease liabilities		$	135

The following table presents the weighted-average remaining lease term and discount rates for the Company’s leases as of September 30, 2020:

Description	September 30, 2020
Weighted-average remaining lease term (years):
Operating leases		17
Finance leases		12
Weighted-average discount rate:
Operating leases		2.19	%
Finance leases		4.42	%

Future minimum lease payments under non-cancelable operating and finance leases as of September 30, 2020 were as follows:

Years Ended September 30	Operating leases		Finance leases
	(In millions)
2021	$	17	$	5
2022		12		4
2023		11		4
2024		10		4
2025		9		4
2026 and thereafter		67		19
Total lease payments		126		40
Less: imputed interest		22		9
Total	$	104	$	31

The Company’s future minimum lease payments under non-cancelable leases as of September 30, 2019 were as follows:

Years Ended September 30	Operating leases		Capital leases
	(In millions)
2020	$	23	$	3
2021		14		3
2022		9		3
2023		9		3
2024		8		2
2025 and thereafter		68		7
Total lease payments		131		21
Less: imputed interest		—		9
Total	$	131	$	12