Leases

12 Months Ended

Sep. 30, 2019

NOTE 12: LEASES

We lease and sublease various facilities and certain equipment under operating and capital leases. Future minimum rentals due under non-cancelable leases and annual future minimum rentals expected under subleases are as follows:



Fiscal Year Ended September 30,	Operating Lease Payments		Sublease Revenue

	(in thousands)
2020	$	69,291	$	3,028
2021	60,588		3,228
2022	46,720		3,001
2023	32,062		2,511
2024	19,969		839
Thereafter	39,256		—
	$	267,886	$	12,607

After an initial lease term of generally three to 10 years, our real property lease agreements typically allow renewals in three to five-year increments. Our lease agreements generally include rent escalations throughout the initial lease term. Rent escalations are included in the above amounts, with certain future rental payments contingent on increases in a consumer price index. For financial reporting purposes, the aggregate rentals over the lease term, including lease renewal options that are reasonably assured, are expensed on a straight-line basis.

The following table presents the amount of net rent recognized as expense:



	Fiscal Year Ended September 30,
	2019			2018			2017

	(in thousands)
Gross rent expense from continuing operations	$	65,295		$	61,821		$	56,794
Sublease rent revenue from continuing operations	(35		)	(109		)	(56		)
Net rent expense from continuing operations	$	65,260		$	61,712		$	56,738

In December 2014, we entered into a non-cancelable 13-year operating lease for our corporate offices, with rent payments beginning February 2016 and ending March 2029. Annual rent, net of square footage subsequently terminated as a result of negotiations with the landlord, escalated from $2.5 million at lease inception to $3.9 million in the terminal year of the lease.

The lease includes two five-year extension options at the end of the initial lease term. The estimated minimum future rental payments under the lease are approximately $38.1 million. During fiscal 2017 and 2016, we initiated subleases for a portion of our corporate operating office lease for estimated minimum future sublease payments of approximately $12.2 million. In addition to the above subleases, during fiscal 2018 we entered into an amendment to the operating lease surrendering another

15% of the initial leased premises. As a result, sublease payments are expected to fully offset our original operating lease obligations through August 2023, with renewal options available until the end of the master operating lease in March 2029.

During the second quarter of fiscal 2015, we entered into cancelable subleases for our Miami office and a non-cancelable Mexico City sublease for an estimated minimum future sublease payment of approximately $4.6 million. Sublease payments are expected to offset substantially all of our original operating lease obligations over the nine-year period beginning March 2015 and ending September 2024 in the case of the Miami lease. The sublease tenant elected to terminate the lease early, effective October 31, 2018 and paid $0.7 million as result of the buyout clause. We entered into a new sublease effective June 2019 to September 2024. Sublease payments are expected to offset substantially all of our original operating lease obligations.

The Mexico City lease and sublease expired in fiscal 2019.