Operating Leases

9 Months Ended

Jun. 30, 2022

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expense that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the three and nine months ended June 30, 2022 and 2021, operating lease expense and cash payments on lease liabilities were as follows:


	Three Months Ended June 30,				Nine Months Ended June 30,
in thousands	2022		2021		2022		2021
Operating lease expense	$	986	$	1,075	$	2,964	$	3,248
Cash payments on lease liabilities	$	1,083	$	1,161	$	3,259	$	3,679

At June 30, 2022 and 2021, the weighted-average remaining lease term and discount rate were as follows:


	As of June 30,
	2022	2021
Weighted-average remaining lease term	4.4 years	4.9 years
Weighted-average discount rate	4.45%	4.62%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2022:


Fiscal Years Ending September 30,
in thousands
2022 (a)	$	1,103
2023	3,799
2024	2,680
2025	2,277
2026	1,643
Thereafter	1,928
Total lease payments (b)	13,430
Less: Imputed interest	1,275
Total operating lease liabilities	$	12,155

(a) Remaining lease payments are for the period beginning July 1, 2022 through September 30, 2022.

(b) Lease payments excludes $10.3 million legally binding minimum lease payments for an office lease signed but not yet commenced. The related ROU asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of June 30, 2022.