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LEASES
 3 Months Ended
Dec. 31, 2020
Leases [Abstract]  
LEASES LEASES
The Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. The Company has lease agreements that contain both lease and non-lease components. For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance). Components of operating lease costs are as follows:
For the Three Months Ended December 31,
20202019
Fixed$10,040 $9,552 
Variable (a), (b)
2,047 1,753 
Short-term (b)
1,114 1,430 
Total$13,201 $12,735 
(a) Primarily relates to common-area maintenance and property taxes.
(b) Not recorded on the balance sheet.
Supplemental cash flow information were as follows:
For the Three Months Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$11,205 $12,277 
Financing cash flows from finance leases803 962 
Total$12,008 $13,239 

Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:
At December 31, 2020September 30, 2020
Operating Leases:
Right of use assets:
Operating right-of-use assets$157,860 $161,627 
Lease Liabilities:
Current portion of operating lease liabilities$31,304 $31,848 
Long-term operating lease liabilities132,634 136,054 
Total operating lease liabilities$163,938 $167,902 
Finance Leases:
Property, plant and equipment, net(1)
$17,975 $18,774 
Lease Liabilities:
Notes payable and current portion of long-term debt$3,146 $3,352 
Long-term debt, net14,885 15,339 
Total financing lease liabilities$18,031 $18,691 
(1) Finance lease assets are recorded net of accumulated depreciation of $3,319.
Two Griffon subsidiaries have finance leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2025, respectively, and bear interest at fixed rates of approximately 5.0% and 5.6%, respectively. The Troy, Ohio lease is secured by a mortgage on the real estate and is guaranteed by Griffon. The Ocala, Florida lease contains two five-year renewal options. As of December 31, 2020 and September 30, 2020, $16,553 and $17,188, respectively, was outstanding, net of issuance costs. The remaining lease liability balance relates to finance equipment leases.

The aggregate future maturities of lease payments for operating leases and finance leases as of December 31, 2020 are as follows (in thousands):
Operating LeasesFinance Leases
2020(a)
$28,990 $3,317 
202134,154 2,732 
202225,804 2,395 
202318,956 2,122 
202417,138 2,074 
202511,739 2,074 
Thereafter63,844 7,777 
Total lease payments200,625 22,491 
Less: Imputed Interest(36,687)(4,460)
Present value of lease liabilities$163,938 $18,031 
(a) Excluding the three months ended December 31, 2020

Average lease terms and discount rates at December 31, 2020 were as follows:
Weighted-average remaining lease term (years)
Operating leases8.2
Finance Leases8.4
Weighted-average discount rate
Operating Leases4.46 %
Finance Leases5.52 %
LEASES LEASES
The Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. The Company has lease agreements that contain both lease and non-lease components. For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance). Components of operating lease costs are as follows:
For the Three Months Ended December 31,
20202019
Fixed$10,040 $9,552 
Variable (a), (b)
2,047 1,753 
Short-term (b)
1,114 1,430 
Total$13,201 $12,735 
(a) Primarily relates to common-area maintenance and property taxes.
(b) Not recorded on the balance sheet.
Supplemental cash flow information were as follows:
For the Three Months Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$11,205 $12,277 
Financing cash flows from finance leases803 962 
Total$12,008 $13,239 

Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:
At December 31, 2020September 30, 2020
Operating Leases:
Right of use assets:
Operating right-of-use assets$157,860 $161,627 
Lease Liabilities:
Current portion of operating lease liabilities$31,304 $31,848 
Long-term operating lease liabilities132,634 136,054 
Total operating lease liabilities$163,938 $167,902 
Finance Leases:
Property, plant and equipment, net(1)
$17,975 $18,774 
Lease Liabilities:
Notes payable and current portion of long-term debt$3,146 $3,352 
Long-term debt, net14,885 15,339 
Total financing lease liabilities$18,031 $18,691 
(1) Finance lease assets are recorded net of accumulated depreciation of $3,319.
Two Griffon subsidiaries have finance leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2025, respectively, and bear interest at fixed rates of approximately 5.0% and 5.6%, respectively. The Troy, Ohio lease is secured by a mortgage on the real estate and is guaranteed by Griffon. The Ocala, Florida lease contains two five-year renewal options. As of December 31, 2020 and September 30, 2020, $16,553 and $17,188, respectively, was outstanding, net of issuance costs. The remaining lease liability balance relates to finance equipment leases.

The aggregate future maturities of lease payments for operating leases and finance leases as of December 31, 2020 are as follows (in thousands):
Operating LeasesFinance Leases
2020(a)
$28,990 $3,317 
202134,154 2,732 
202225,804 2,395 
202318,956 2,122 
202417,138 2,074 
202511,739 2,074 
Thereafter63,844 7,777 
Total lease payments200,625 22,491 
Less: Imputed Interest(36,687)(4,460)
Present value of lease liabilities$163,938 $18,031 
(a) Excluding the three months ended December 31, 2020

Average lease terms and discount rates at December 31, 2020 were as follows:
Weighted-average remaining lease term (years)
Operating leases8.2
Finance Leases8.4
Weighted-average discount rate
Operating Leases4.46 %
Finance Leases5.52 %