Leases

12 Months Ended

Sep. 30, 2018

LEASES

Lessee Accounting

Capital leases, primarily for the right to use machinery and equipment, are included with owned plant and equipment within "Plant and Equipment, net" on the consolidated balance sheets in the amount of $21.6 and $22.3 at 30 September 2018 and 2017, respectively. Related amounts of accumulated depreciation are $6.1 and $5.3, respectively.

Operating leases principally relate to real estate and also include aircraft, distribution equipment, and vehicles. Certain leases include escalation clauses, renewal, and/or purchase options. Rent expense is recognized on a straight-line basis over the minimum lease term. Rent expense under operating leases, including month-to-month agreements, was $82.7, $65.8, and $67.6 in fiscal years 2018, 2017, and 2016, respectively.

At 30 September 2018, minimum payments due under leases associated with continuing operations are as follows:



	Capital Leases		Operating Leases
2019		$1.7		$65.9
2020	1.4		50.4
2021	2.9		41.4
2022	1.3		30.4
2023	1.2		23.3
Thereafter	14.3		123.0
Total		$22.8		$334.4

The present value of the above future capital lease payments totaled $10.5. Refer to Note 15, Debt.

Included in the operating lease payments disclosed above are future minimum payments due under leases related to the Energy-from-Waste discontinued operations (i.e., Tees Valley, United Kingdom) of approximately $2 in each of the next five years and $40 thereafter, for a total lease commitment of approximately $50. As discussed in Note 3, Discontinued Operations, during the first quarter of 2017, we recorded an accrual for these lease obligations to other noncurrent liabilities in continuing operations.

Lessor Accounting

As discussed under Revenue Recognition in Note 1, Major Accounting Policies, certain contracts associated with facilities that are built to provide product to a specific customer are required to be accounted for as leases.

Operating Leases

Assets subject to operating lease treatment in which we are the lessor are recorded within "Plant and equipment, net" on the consolidated balance sheets. As of 30 September 2018, plant and equipment, at cost, was $2.4 billion, and accumulated depreciation was $.4 billion. Assets subject to operating leases include those of the Lu’An joint venture, which is discussed in Note 6, Acquisitions.

At 30 September 2018, minimum lease payments expected to be collected are as follows:



2019		$261.5
2020	259.1
2021	255.8
2022	251.5
2023	244.9
Thereafter	2,904.8
Total		$4,177.6

Capital Leases

Lease receivables, net, are primarily included within "Noncurrent capital lease receivables" on our consolidated balance sheets, with the remaining balance in "Other receivables and current assets."

The components of lease receivables were as follows:



30 September	2018			2017
Gross minimum lease payments receivable		$1,673.7			$1,897.0
Unearned interest income	(568.3		)	(671.9		)
Lease Receivables, net		$1,105.4			$1,225.1

Lease payments collected in fiscal years 2018, 2017, and 2016 were $182.7, $183.6, and $186.0, respectively. These payments reduced the lease receivable balance by $97.4, $92.2, and $85.5 in fiscal years 2018, 2017, and 2016, respectively.

At 30 September 2018, minimum lease payments expected to be collected are as follows:



2019		$172.5
2020	167.8
2021	161.9
2022	150.6
2023	144.3
Thereafter	876.6
Total		$1,673.7