Leases

12 Months Ended

Jun. 30, 2023

We primarily enter into lease agreements for office space, distribution centers, certain manufacturing facilities and equipment. Certain leases contain options that provide us with the ability to extend the lease term. Such options are included in the lease term when it is reasonably certain that the option will be exercised. When accounting for leases, we combine payments for leased assets, related services and other components of a lease. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. In addition, leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheet.

The discount rate implicit within our leases is generally not determinable, and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on lease term and the currency in which lease payments are made.

The components of lease expense are as follows:


	2023		2022		2021
Operating lease expense	$	60,411	$	46,026	$	48,171
Finance lease cost:
Amortization of lease assets	5,604		1,861		1,576
Interest on lease liabilities	4,383		390		455
Short-term lease cost	7,577		7,041		7,674
Variable lease cost	5,747		5,849		5,835
Total lease cost	$	83,722	$	61,167	$	63,711

Supplemental cash flow information related to leases is as follows:


	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases	$	57,717	$	45,371	$	47,080
Operating cash outflows - interest payments on finance leases	4,383		390		455
Financing cash outflows - payments on finance lease obligations	5,141		1,992		1,713
Right-of-use assets obtained in exchange for operating lease obligations	45,365		50,925		41,637
Right-of-use assets obtained in exchange for finance lease obligations	1,340		—		3,834

Supplemental balance sheet information related to operating leases is as follows:


	2023			2022
Operating Leases
Operating lease right-of-use assets (included within Investments and other assets)	$	232,733		$	133,412

Current operating lease liabilities (included within Other accrued liabilities)	$	50,523		$	36,023
Long-term operating lease liabilities (included within Other liabilities)	187,445			100,337
Total operating lease liabilities	$	237,968		$	136,360

Finance Leases
Land and buildings	$	107,910		$	9,223
Machinery and equipment	5,113			5,066
Accumulated depreciation	(8,196)			(3,836)
Net property, plant and equipment	$	104,827		$	10,453

Current portion of long-term debt (included within Other accrued liabilities)	$	4,198		$	1,691
Long-term debt (included within Other liabilities)	100,889			8,575
Total finance lease liabilities	$	105,087		$	10,266

Weighted-average remaining lease term
Operating leases	6.9 years			5.6 years
Finance leases	20.8 years			15.7 years

Weighted-average discount rate
Operating leases	3.9		%	1.6		%
Finance leases	5.2		%	3.3		%

Maturities of lease liabilities at June 30, 2023 are as follows:


	Operating Leases		Finance Leases
2024	$	58,351	$	9,483
2025	49,196		8,871
2026	38,352		8,792
2027	28,590		8,896
2028	21,481		8,936
Thereafter	82,407		128,519
Total lease payments	$	278,377	$	173,497
Less imputed interest	40,409		68,410
Total lease liabilities	$	237,968	$	105,087

Leases

The components of lease expense are as follows:


	2023		2022		2021
Operating lease expense	$	60,411	$	46,026	$	48,171
Finance lease cost:
Amortization of lease assets	5,604		1,861		1,576
Interest on lease liabilities	4,383		390		455
Short-term lease cost	7,577		7,041		7,674
Variable lease cost	5,747		5,849		5,835
Total lease cost	$	83,722	$	61,167	$	63,711

Supplemental cash flow information related to leases is as follows:


	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases	$	57,717	$	45,371	$	47,080
Operating cash outflows - interest payments on finance leases	4,383		390		455
Financing cash outflows - payments on finance lease obligations	5,141		1,992		1,713
Right-of-use assets obtained in exchange for operating lease obligations	45,365		50,925		41,637
Right-of-use assets obtained in exchange for finance lease obligations	1,340		—		3,834

Supplemental balance sheet information related to operating leases is as follows:


	2023			2022
Operating Leases
Operating lease right-of-use assets (included within Investments and other assets)	$	232,733		$	133,412

Current operating lease liabilities (included within Other accrued liabilities)	$	50,523		$	36,023
Long-term operating lease liabilities (included within Other liabilities)	187,445			100,337
Total operating lease liabilities	$	237,968		$	136,360

Finance Leases
Land and buildings	$	107,910		$	9,223
Machinery and equipment	5,113			5,066
Accumulated depreciation	(8,196)			(3,836)
Net property, plant and equipment	$	104,827		$	10,453

Current portion of long-term debt (included within Other accrued liabilities)	$	4,198		$	1,691
Long-term debt (included within Other liabilities)	100,889			8,575
Total finance lease liabilities	$	105,087		$	10,266

Weighted-average remaining lease term
Operating leases	6.9 years			5.6 years
Finance leases	20.8 years			15.7 years

Weighted-average discount rate
Operating leases	3.9		%	1.6		%
Finance leases	5.2		%	3.3		%

Maturities of lease liabilities at June 30, 2023 are as follows:


	Operating Leases		Finance Leases
2024	$	58,351	$	9,483
2025	49,196		8,871
2026	38,352		8,792
2027	28,590		8,896
2028	21,481		8,936
Thereafter	82,407		128,519
Total lease payments	$	278,377	$	173,497
Less imputed interest	40,409		68,410
Total lease liabilities	$	237,968	$	105,087