Leases (Notes)

12 Months Ended

Sep. 30, 2020

Most leases contain options to renew or terminate the lease. Right-of-use assets and lease liabilities reflect only the options which the Company is reasonably certain to exercise. Lease expense is recognized on a straight-line basis over the lease term.

The Company has certain real estate leases that contain variable lease payments which are based on changes in the Consumer Price Index (CPI). Additionally, the Company’s leases generally require it to pay for fuel, maintenance, repair, insurance and taxes. These payments are not included in the right-of-use asset or lease liability and are expensed as incurred.

The following table presents the Company’s lease costs for the fiscal year ended September 30, 2020 (in millions):


	Year Ended September 30, 2020
Operating lease cost	$	399
Variable lease cost	145
Total lease costs	$	544

Total rental expense for continuing operations for the fiscal years ended September 30, 2019 and 2018 was $452 million and $408 million, respectively.

The following table presents supplemental consolidated statement of financial position information as of September 30, 2020 (in millions):


	Location of lease balances	September 30, 2020
Operating lease right-of-use assets	Other noncurrent assets	$	1,190
Operating lease liabilities - current	Other current liabilities	332
Operating lease liabilities - noncurrent	Other noncurrent liabilities	875

Weighted-average remaining lease term		6 years
Weighted-average discount rate		2.2		%

The following table presents supplemental cash flow information related to operating leases for the fiscal year ended September 30, 2020 (in millions):


	Year Ended September 30, 2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash outflows from operating leases	$	397
Noncash operating lease activity:
Right-of-use assets obtained in exchange for operating lease liabilities	467

The following table presents maturities of operating lease liabilities as of September 30, 2020 (in millions):


	September 30, 2020
2021	$	352
2022	279
2023	191
2024	143
2025	91
After 2025	235
Total operating lease payments	1,291
Less: interest	(84)
Present value of lease payments	$	1,207

As previously disclosed in the Company's Annual Report on Form 10-K for the year ended September 30, 2019 and accounted for under the previous lease accounting guidance, future minimum operating lease payments for long-term noncancellable operating leases as of September 30, 2019 were as follows (in millions):


	September 30, 2019
2020	$	352
2021	287
2022	200
2023	111
2024	71
After 2024	172
Total minimum lease payments	$	1,193