Leases

12 Months Ended

Sep. 30, 2021

LeasesWe 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 16 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 as follows (in millions):


	2021		2020
Operating lease expense(1)	$	109.8	$	104.6
Variable lease expense(2)	15.8		15.6
Finance lease expense
Amortization of right-of-use assets	1.7		1.3
Interest on lease liabilities	0.4		0.4
Total lease expense	$	127.7	$	121.9

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

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

Rental expense accounted for under the previous accounting standard was $119.0 million in 2019.

Supplemental balance sheet information related to leases was as follows (in millions):


	2021		2020
Weighted average remaining lease term:
Operating leases	6.8 years		6.3 years
Finance leases	4.3 years		7.8 years
Weighted average discount rate:
Operating leases	1.79	%	1.84	%
Finance leases	3.96	%	3.50	%

Maturities of lease liabilities as of September 30, 2021, were as follows (in millions):


	Finance Leases		Operating Leases
2022	$	5.6	$	96.2
2023	3.5		81.3
2024	1.9		62.9
2025	1.6		45.5
2026	1.6		33.0
Thereafter	2.8		110.1
Total undiscounted lease payments	$	17.0	$	429.0
Less imputed interest	(1.5)		(25.5)
Total lease liabilities	$	15.5	$	403.5

As of September 30, 2021, we have additional operating leases for facilities that have not yet commenced with undiscounted lease obligations of approximately $24 million and additional finance leases for equipment that have not yet commenced with undiscounted lease obligations of approximately $10 million. These leases will commence in fiscal 2022.

Supplemental cash flow information related to leases was as follows (in millions):


	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	108.5	$	103.6
Operating cash flows from finance leases	0.4		0.4
Financing cash flows from finance leases	1.8		1.2
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	90.6	$	131.2
Financing leases	0.9		—