Leases

12 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

LEASES

The Company’s leases consist primarily of real estate leases in locations where the Company maintains operations, and are classified as operating leases.

The Company evaluates each lease and service arrangement at inception to determine if the arrangement is, or contains, a lease. A lease exists if the Company obtains substantially all of the economic benefits of and has the right to control the use of an asset for a period of time. The lease term begins on the commencement date, which is the date the Company takes possession of the leased property and also classifies the lease as either operating or finance, and may include options to extend or terminate the lease if exercise of the option to extend or terminate the lease is considered to be reasonably certain. The Company’s options to extend or terminate a lease generally do not exceed five years. The lease term is used both to determine lease classification as an operating or finance lease and to calculate straight-line lease expense for operating leases. The weighted average remaining operating lease term as of June 30, 2022 was 8.2 years.

ROU assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. Certain leases require the Company to pay taxes, insurance, maintenance, and/or other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature (e.g. based on actual costs incurred). These variable lease costs are recognized as a variable lease expense when incurred. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate to measure the lease liability and the associated ROU asset at commencement date. The incremental borrowing rate was determined based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. The weighted average discount rate used in measurement of the Company’s operating lease liabilities as of June 30, 2022 was 2.8%.

Supplemental Balance Sheet Information

	June 30,
	2022		2021
	(in millions)
Assets:
Operating lease ROU assets (a)	$	222.8	$	262.0
Liabilities:
Operating lease liabilities (a) - Current	$	45.4	$	40.2
Operating lease liabilities (a) - Non-current	227.8		263.1
Total Operating lease liabilities	$	273.2	$	303.3

_________

(a)Operating lease assets are included within Other non-current assets, and operating lease liabilities are included within Payables and accrued expenses (current portion) and Other non-current liabilities (non-current portion) in the Company’s Consolidated Balance Sheets as of June 30, 2022 and 2021, respectively.

Components of Lease Cost (a)

	Years ended June 30,
	2022		2021
	(in millions)
Operating lease cost	$	59.8	$	53.4
Variable lease cost	$	29.5	$	25.8

_________

(a)Lease cost is included within Cost of revenues and Selling, general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s Consolidated Statements of Earnings.

Supplemental Cash Flow Information

	Years ended June 30,
	2022		2021
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	36.7	$	33.6
ROU assets obtained in exchange for operating lease liabilities	$	16.7	$	24.4

Maturity of Lease Liabilities under ASC 842 (Leases)

Future rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2022:

	Operating Leases
Years Ending June 30,	(in millions)
2023	$	48.2
2024	43.2
2025	37.5
2026	33.1
2027	31.0
Thereafter	116.0
Total lease payments	309.0
Less: Discount Amount	35.8
Present value of operating lease liabilities	$	273.2