Operating Leases

12 Months Ended

Sep. 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 consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the fiscal years ended September 30, 2022, 2021 and 2020, we recorded operating lease expense of $4.0 million, $4.3 million and $4.5 million, respectively. Cash payments on lease liabilities during the fiscal years ended September 30, 2022, 2021 and 2020 totaled $4.4 million, $4.8 million and $4.6 million, respectively.

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


	Fiscal Year Ended September 30,
	2022	2021
Weighted-average remaining lease term	4.3 years	4.8 years
Weighted-average discount rate	4.43%	4.56%

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


Fiscal Years Ending September 30,
in thousands
2023	$	3,799
2024	2,688
2025	2,299
2026	1,643
2027	702
Thereafter	1,226
Total lease payments(a)	12,357
Less: imputed interest	1,149
Total operating lease liabilities	$	11,208

(a) Lease payments excludes $11.2 million legally binding minimum lease payments for an office lease signed but not yet commenced as of September 30, 2022. The related ROU asset and operating lease liability are not reflected on the Company's consolidated balance sheet as of September 30, 2022.