On October 1, 2019, we adopted ASU 2016-02 “Leases”, which is codified in ASC 842 and supersedes current lease guidance in ASC 840, using the modified retrospective approach and as a result we did not restate prior periods. We elected the package of three practical expedients permitted within the standard pursuant to which we did not reassess initial direct costs, lease classification or whether our contracts contain or are leases. In addition, we also applied the practical expedient to account for the lease and non-lease components as a single lease component for all of our leases. We also made an accounting policy election to not recognize ROU assets and liability for leases with a term of 12 months or less unless the lease includes an option to renew or purchase the underlying asset that are reasonably certain to be exercised. The adoption of ASC 842 resulted in the recognition of ROU assets of $731.1 million (net of deferred rent and favorable/unfavorable lease liabilities) with corresponding operating lease liabilities of $783.9 million. The condensed consolidated financial statements for the periods ended June 30, 2020 are presented under the new standard, while comparative periods presented have not been adjusted and continue to be reported in accordance with the previous standard.

We lease various real estate, including certain operating facilities, warehouses, office space and land. We also lease material handling equipment, vehicles and certain other equipment. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Effective October 1, 2019, operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Our leases may include options to extend or terminate the lease. These options to extend are included in the lease term when it is reasonably certain that we will exercise that option. Some leases provide for variable payments, however, because they are not based on an index or rate, they are not included in the ROU assets and liabilities. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities. Variable payments for equipment, vehicles and leases within supply agreements primarily relate to usage, repairs, and maintenance. As the implicit rate is not readily determinable for our leases, we apply a portfolio approach using an estimated incremental borrowing rate to determine the initial present value of lease payments over the lease terms on a collateralized basis over a similar term, which is based on market and company specific information. We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate, and apply the rate based on the currency of the lease, which is updated on a quarterly basis for measurement of new lease liabilities.

The following table presents certain information related to the lease costs for finance and operating leases (in millions):

	Three Months Ended			Nine Months Ended
	June 30, 2020			June 30, 2020
Operating lease costs	$	50.0		$	150.0
Variable and short-term lease costs		25.6			79.6
Sublease income		(1.5	)		(5.0	)
Finance lease cost:
Amortization of lease assets		2.5			8.0
Interest on lease liabilities		1.9			6.0
Total lease cost, net	$	78.5		$	238.6

The table below presents the lease-related assets and liabilities recorded on the balance sheet (in millions):

	Condensed Consolidated Balance Sheet Caption	June 30, 2020

Operating leases:
Operating lease right-of-use asset	Other assets	$	649.2

Current operating lease liabilities	Other current liabilities	$	169.0
Operating lease liabilities	Other long-term liabilities		535.5
Total operating lease liabilities		$	704.5

Finance leases:
Property, plant and equipment		$	145.6
Accumulated depreciation			(19.0	)
Property, plant and equipment, net		$	126.6

Current finance lease liabilities	Current portion of debt	$	9.3
Noncurrent finance lease liabilities	Long-term debt due after one year		268.5
Total finance lease liabilities		$	277.8

Our finance lease portfolio includes certain assets that are either fully depreciated or transferred for which the lease arrangement requires a one-time principal repayment on the maturity date of the lease obligation.

	June 30, 2020
Weighted average remaining lease term:
Operating leases	5.9 years
Finance leases	9.2 years

Weighted average discount rate:
Operating leases		2.7	%
Finance leases		4.0	%

The table below presents supplemental cash flow information related to leases (in millions):

	Nine Months Ended
	June 30, 2020

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows related to operating leases	$	151.7
Operating cash flows related to finance leases	$	6.5
Financing cash flows related to finance leases	$	7.7

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities and finance lease liabilities recorded on the balance sheet (in millions):

	June 30, 2020
	Operating Leases			Finance Leases			Total

Remaining fiscal 2020	$	50.3		$	4.3		$	54.6
Fiscal 2021		177.1			16.1			193.2
Fiscal 2022		140.3			15.2			155.5
Fiscal 2023		110.0			13.3			123.3
Fiscal 2024		87.8			12.1			99.9
Thereafter		203.5			300.9			504.4
Total lease payments		769.0			361.9			1,130.9
Less: Interest ⁽¹⁾		(64.5	)		(84.1	)		(148.6	)
Present value of future lease payments	$	704.5		$	277.8		$	982.3

At September 30, 2019, future minimum payments under all existing non-cancelable operating leases for the succeeding five years and thereafter were as follows (in millions):

Fiscal 2020	$	214.3
Fiscal 2021		180.1
Fiscal 2022		136.3
Fiscal 2023		108.3
Fiscal 2024		85.3
Thereafter		206.1
Total	$	930.4