Leases

12 Months Ended

Oct. 31, 2020

The Company primarily has operating leases for office, manufacturing and warehouse space, vehicles, and office equipment. The Company's 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, the Company uses its incremental borrowing rate based on the information available at the lease's commencement date in determining the present value of lease payments. The Company considers information including, but not limited to, the lease term, its 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 the Company will exercise the extension option.

The Company’s operating leases typically include non-lease components such as common-area maintenance costs. The Company has 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 the Consolidated 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 $2.4 million as of October 31, 2020 are not significant and are not included in the disclosure tables below.

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



(In millions)	October 31, 2020
Operating Leases
Operating lease right-of-use assets	$	260.2

Operating lease liabilities, current	33.3
Operating lease liabilities, non-current	236.8
Total operating lease liabilities	$	270.1

Weighted average remaining lease term (in years)	11.3
Weighted average discount rate	3		%

The following table presents information about lease expense, which is included in selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income:



(In millions)	2020
Operating lease expense	$	41.2
Short-term lease expense	4.4
Variable lease expense	$	1.8

ASC 840 Comparative Disclosures

Prior to fiscal 2020, we accounted for our leases in accordance with ASC 840, Leases. Under ASC 840, rental expense for operating leases was $45.3 million and $38.8 million for fiscal 2019 and 2018, respectively.

Supplemental Cash Flow Information

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



(In millions)	2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	40.6
Operating lease right-of-use assets obtained in exchange for lease obligations	17.7

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 October 31, 2020 are:



(In millions)
2021	$	40.7
2022	36.3
2023	32.6
2024	29.3
2025	28.0
Thereafter	158.4
Total lease payments	325.3
Less: interest	55.2
Present value of lease liabilities	$	270.1