Leases

6 Months Ended

Apr. 30, 2020

The Company primarily has operating leases for office, manufacturing and warehouse space, vehicles, and office equipment. Our leases expire on various dates between 2020 and 2045, some of which could include options to extend the lease.

Lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As these leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease's commencement date in determining the present value of lease payments. We consider information including, but not limited to, the lease term, our credit rating and interest rates of similar debt instruments with comparable credit ratings and security interests. The lease right-of-use assets are increased by any lease prepayments made and reduced by any lease incentives such as tenant improvement allowances. Options to extend the lease term are included in the lease term when it is reasonably certain that we will exercise the extension option.

The Company’s operating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities, to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments.

Leases with a term of one year or less are not recognized on our Consolidated Condensed Balance Sheet, while the associated lease payments are recorded in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.

Commitments under finance lease arrangements of $1.9 million as of April 30, 2020 are not significant and are not included in the disclosure tables below.

The following table presents information about leases on the Consolidated Condensed Balance Sheet:



(In millions)	April 30, 2020
Operating Leases
Operating lease right-of-use assets	$	255.5

Operating lease liabilities, current	31.5
Operating lease liabilities, non-current	232.7
Total operating lease liabilities	$	264.2

Weighted average remaining lease term (in years)	11.6
Weighted average discount rate	3		%

The following table presents information about lease expense in our Consolidated Statements of Income and Comprehensive Income:



Periods Ended April 30,	Three Months		Six Months
(In millions)	2020		2020
Operating lease expense	$	9.7	$	19.6
Short-term lease expense	1.5		2.6
Variable lease expense	0.4		0.8

The following table presents supplemental cash flow information about the Company’s leases:



Periods Ended April 30,	Three Months		Six Months
(In millions)	2020		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9.7	$	19.6

Maturity of Lease Liabilities

The minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of April 30, 2020 are:



(In millions)
Remainder of 2020	$	19.1
2021	36.5
2022	32.6
2023	29.2
2024	27.1
2025 and thereafter	173.9
Total lease payments	318.4
Less: interest	54.2
Present value of lease liabilities	$	264.2

As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, and under previous lease accounting standard ASC 840, Leases, the aggregate future noncancelable minimum rental payments on its operating leases, as of October 31, 2019, were as follows:



(In millions)
2020	$	38.5
2021	34.9
2022	31.2
2023	28.0
2024	26.5
2025 and thereafter	173.6
Total future minimum lease payments	$	332.7