Leases

12 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

Leases

We determine if an arrangement is a lease at inception and classify it as either finance or operating.

Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance leases are recorded in property, plant and equipment, net, and finance lease liabilities within other current and other non-current liabilities on our Consolidated Balance Sheet. Finance lease assets are amortized in operating expenses on a

straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component for lease liabilities included in interest expense and recognized using the effective interest method over the lease term.

Operating leases are recorded in other assets and operating lease liabilities, current and non-current on the Company’s Consolidated Balance Sheet. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term.

The Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. We account for non-lease components, such as common area maintenance, as a component of the lease, and include it in the initial measurement of our lease assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that we will exercise that option.

The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations.

The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):

	Year Ended June 30, 2021		Year Ended June 30, 2020
Finance Lease Cost
Amortization of right-of-use assets	$	1,667	$	1,667
Interest on lease liabilities	1,268		1,328
Total finance lease cost	2,935		2,995
Operating lease cost	37,361		32,466
Sublease income	1,471		368
Total lease cost	$	38,825	$	35,093
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	1,268		1,328
Operating cash flows from operating leases	35,641		30,816
Financing cash flows from finance leases	1,152		1,026
Assets Obtained in Exchange for Lease Liabilities
Right-of-use assets obtained in acquisitions	13,391		29,247
Right-of-use assets obtained in exchange for new operating lease liabilities	52,839		29,458
Total assets obtained in exchange for new operating lease liabilities	66,230		58,705
Weighted-Average Remaining Lease Term (in Years)
Finance leases	10.5		11.5
Operating leases	7.0		7.2
Weighted-Average Discount Rate
Finance leases	5.6 %		5.6		%
Operating leases	6.1 %		7.3		%

The following table presents future minimum lease payments, which include short-term leases ($000):

Future Years	Operating Leases		Finance Leases		Total
Year 1	$	34,076	$	2,486	$	36,562
Year 2	31,121		2,554		33,675
Year 3	27,276		2,624		29,900
Year 4	23,332		2,697		26,029
Year 5	18,632		2,771		21,403
Thereafter	58,590		16,648		75,238
Total minimum lease payments	$	193,027	$	29,780	$	222,807
Less: amounts representing interest	42,128		7,484		49,612
Present value of total lease liabilities	$	150,899	$	22,296	$	173,195

Leases

Leases

We determine if an arrangement is a lease at inception and classify it as either finance or operating.

Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance leases are recorded in property, plant and equipment, net, and finance lease liabilities within other current and other non-current liabilities on our Consolidated Balance Sheet. Finance lease assets are amortized in operating expenses on a

straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component for lease liabilities included in interest expense and recognized using the effective interest method over the lease term.

Operating leases are recorded in other assets and operating lease liabilities, current and non-current on the Company’s Consolidated Balance Sheet. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term.

The Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. We account for non-lease components, such as common area maintenance, as a component of the lease, and include it in the initial measurement of our lease assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that we will exercise that option.

The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations.

The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):

	Year Ended June 30, 2021		Year Ended June 30, 2020
Finance Lease Cost
Amortization of right-of-use assets	$	1,667	$	1,667
Interest on lease liabilities	1,268		1,328
Total finance lease cost	2,935		2,995
Operating lease cost	37,361		32,466
Sublease income	1,471		368
Total lease cost	$	38,825	$	35,093
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	1,268		1,328
Operating cash flows from operating leases	35,641		30,816
Financing cash flows from finance leases	1,152		1,026
Assets Obtained in Exchange for Lease Liabilities
Right-of-use assets obtained in acquisitions	13,391		29,247
Right-of-use assets obtained in exchange for new operating lease liabilities	52,839		29,458
Total assets obtained in exchange for new operating lease liabilities	66,230		58,705
Weighted-Average Remaining Lease Term (in Years)
Finance leases	10.5		11.5
Operating leases	7.0		7.2
Weighted-Average Discount Rate
Finance leases	5.6 %		5.6		%
Operating leases	6.1 %		7.3		%

The following table presents future minimum lease payments, which include short-term leases ($000):

Future Years	Operating Leases		Finance Leases		Total
Year 1	$	34,076	$	2,486	$	36,562
Year 2	31,121		2,554		33,675
Year 3	27,276		2,624		29,900
Year 4	23,332		2,697		26,029
Year 5	18,632		2,771		21,403
Thereafter	58,590		16,648		75,238
Total minimum lease payments	$	193,027	$	29,780	$	222,807
Less: amounts representing interest	42,128		7,484		49,612
Present value of total lease liabilities	$	150,899	$	22,296	$	173,195