XML 30 R19.htm IDEA: XBRL DOCUMENT

Leases

3 Months Ended

Dec. 31, 2022

12. Leases

The Company and its subsidiaries are lessees in non-cancelable leasing agreements for office buildings and equipment. Substantially all of the Company’s office building leases are operating leases, and its equipment leases are both operating and finance leases. The Company groups lease and non-lease components for its equipment leases into a single lease component but separates lease and non-lease components for its office building leases.

The Company recognizes a right-of-use asset and lease liability for its operating leases at the commencement date equal to the present value of the contractual minimum lease payments over the lease term. The present value is calculated using the rate implicit in the lease, if known, or the Company’s incremental secured borrowing rate. The discount rate used for operating leases is primarily determined based on an analysis of the Company’s incremental secured borrowing rate, while the discount rate used for finance leases is primarily determined by the rate specified in the lease.

The related lease payments are expensed on a straight-line basis over the lease term, including, as applicable, any free-rent period during which the Company has the right to use the asset. For leases with renewal options where the renewal is reasonably assured, the lease term, including the renewal period, is used to determine the appropriate lease classification and to compute periodic rental expense. Leases with initial terms shorter than 12 months are not recognized on the balance sheet, and lease expense is recognized on a straight-line basis.

The components of lease expenses are as follows:


	Three Months Ended
	December 31, 2022		December 31, 2021

	(in millions)
Operating lease cost	$	41.5	$	44.1
Finance lease cost
Amortization of right-of-use assets		5.1		4.1
Interest on lease liabilities		0.6		0.5
Variable lease cost		7.9		8.1
Total lease cost	$	55.1	$	56.8

Additional balance sheet information related to leases is as follows:


		As of		As of
(in millions except as noted)	Balance Sheet Classification	December 31, 2022		September 30, 2022
Assets:
Operating lease assets	Operating lease right-of-use assets	$	556.4	$	539.8
Finance lease assets	Property and equipment – net		56.2		49.4
Total lease assets		$	612.6	$	589.2

Liabilities:
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	144.9	$	145.6
Finance lease liabilities	Current portion of long-term debt		20.4		18.1
Total current lease liabilities			165.3		163.7
Non-current:
Operating lease liabilities	Operating lease liabilities, noncurrent		606.9		595.3
Finance lease liabilities	Long-term debt		36.3		32.0
Total non-current lease liabilities		$	643.2	$	627.3


	As of		As of
	December 31, 2022		September 30, 2022
Weighted average remaining lease term (in years):
Operating leases	6.6		6.5
Finance leases	3.1		3.1
Weighted average discount rates:
Operating leases	4.1	%	4.0	%
Finance leases	3.9	%	3.8	%

Additional cash flow information related to leases is as follows:


	Three Months Ended
	December 31,		December 31,
	2022		2021

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	49.0	$	50.8
Operating cash flows from finance leases		0.6		0.5
Financing cash flows from finance leases		5.4		4.3
Right-of-use assets obtained in exchange for new operating leases		26.9		14.7
Right-of-use assets obtained in exchange for new finance leases		10.8		7.9

Total remaining lease payments under both the Company’s operating and finance leases are as follows:


	Operating Leases		Finance Leases

Fiscal Year	(in millions)
2023 (nine months remaining)	$	131.2	$	16.7
2024		155.1		20.2
2025		130.1		14.4
2026		102.2		7.5
2027		78.1		1.3
Thereafter		264.0		0.1
Total lease payments	$	860.7	$	60.2
Less: Amounts representing interest	$	(108.9)	$	(3.5)
Total lease liabilities	$	751.8	$	56.7