Leases

3 Months Ended

Dec. 31, 2022

NOTE 4: LEASES

We determine if a contract contains a lease at inception. Our lease portfolio consists primarily of operating leases for pawn store locations and corporate offices with lease terms ranging from three to ten years.

The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases:


(in thousands)	Balance Sheet Location	December 31, 2022		December 31, 2021		September 30, 2022
Lease assets:
Operating lease right-of-use assets	Right-of-use assets, net	$	229,991	$	201,527	$	221,405
Financing lease assets	Right-of-use assets, net	563		—		181
Total lease assets		$	230,554	$	201,527	$	221,586




Lease liabilities:
Current:
Operating lease liabilities	Operating lease liabilities, current	$	52,799	$	51,843	$	52,334
Financing lease liabilities	Accounts payable, accrued expenses and other current liabilities	121		—		37
Total current lease liabilities		$	52,920	$	51,843	$	52,371

Non-current:
Operating lease liabilities	Operating lease liabilities	$	188,730	$	161,841	$	180,756
Financing lease liabilities	Other long-term liabilities	447		—		148
Total non-current lease liabilities		$	189,177	$	161,841	$	180,904
Total lease liabilities		$	242,097	$	213,684	$	233,275

The table below provides major components of our lease costs:


	Three Months Ended December 31,
(in thousands)	2022		2021

Operating lease cost:
Operating lease cost *	$	17,495	$	16,362
Variable lease cost	3,852		3,542
Total operating lease cost	$	21,347	$	19,904

Financing lease cost:
Amortization of financing lease assets	$	19	$	—
Interest on financing lease liabilities	11		—
Total financing lease cost	$	30	$	—
Total lease cost	$	21,377	$	19,904

* Includes a reduction for sublease rental income of $0.8 million and $0.8 million for the quarters ended December 31, 2022 and 2021, respectively.

Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in "Store" and "General and Administrative" expense, based on the underlying lease use. Cash paid for operating leases are $21.4 million and $19.9 million for the quarters ended December 31, 2022 and 2021, respectively.

The weighted-average term and discount rates for leases are as follows:


	Three Months Ended December 31,
	2022		2021

Weighted-average remaining lease term (years):
Operating leases	5.21		5.05
Financing leases	4.03		N/A

Weighted-average discount rate:
Operating leases	8.36	%	8.10	%
Financing leases	11.14	%	N/A

As of December 31, 2022, maturities of lease liabilities under ASC 842 by fiscal year were as follows:


(in thousands)	Operating Leases		Financing Leases
Remaining 2023	$	53,547	$	176
Fiscal 2024	64,242		177
Fiscal 2025	54,470		177
Fiscal 2026	44,077		166
Fiscal 2027	31,338		12
Thereafter	50,420		—
Total lease liabilities	$	298,094	$	708
Less: portion representing imputed interest	56,565		140
Total net lease liabilities	$	241,529	$	568
Less: current portion	52,799		121
Total long term net lease liabilities	$	188,730	$	447

We recorded $20.5 million and $14.3 million in non-cash additions to our right-of-use assets and lease liabilities for the three months ended December 31, 2022 and December 31, 2021, respectively.

Leases