Leases

12 Months Ended

Sep. 30, 2023

We have operating leases primarily for real estate, vehicles, and equipment. We have finance leases primarily for equipment. Our leases have remaining lease terms from less than one year to approximately 15 years.

We elected the package of practical expedients permitted under the transition guidance within the new standard on accounting for leases, which allows the Company to carry forward the historical assessments of whether contracts are, or contain, leases, lease classification, and initial direct costs. We also elected to not record lease ROU assets or lease liabilities for leases with an original term of 12 months or less. We elected to use the remaining lease term for purposes of calculating the incremental borrowing rate upon transition.

The components of lease expense were (in millions):


	2023		2022		2021
Operating lease expense (1)	$	100.2	$	103.6	$	109.8
Variable lease expense (2)	18.8		16.6		15.8
Finance lease expense
Amortization of right-of-use assets	5.2		6.9		1.7
Interest on lease liabilities	0.3		0.6		0.4
Total lease expense	$	124.5	$	127.7	$	127.7

(1) Operating lease expense includes short-term lease expense, which was not material.

(2) Variable lease expense includes sublease income, which was not material.

Supplemental balance sheet information related to leases consists of:


	2023		2022
Weighted average remaining lease term
Operating leases	5.8 years		6.3 years
Finance leases	1.6 years		3.0 years
Weighted average discount rate
Operating leases	3.03	%	2.07	%
Finance leases	3.27	%	2.04	%

Undiscounted maturities of lease liabilities as of September 30, 2023, were (in millions):


	Finance Leases		Operating Leases
2024	$	7.0	$	93.5
2025	3.4		82.9
2026	—		64.4
2027	—		49.1
2028	—		35.4
Thereafter	—		73.9
Total undiscounted lease payments	$	10.4	$	399.2
Less: Imputed interest	(0.3)		(30.5)
Total lease liabilities	$	10.1	$	368.7

As of September 30, 2023, we have additional operating leases for facilities that have not yet commenced with undiscounted lease obligations of approximately $52.1 million. These leases will commence in fiscal 2024.

Supplemental cash flow information related to leases consists of (in millions):


	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	101.7	$	102.9	$	108.5
Operating cash flows from finance leases	0.3		0.6		0.4
Financing cash flows from finance leases	5.5		8.8		1.8
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	93.3	$	63.4	$	90.6
Financing leases	—		11.8		0.9